Approval from FCC Clears the Way for AT&T-DIRECTV Merger

AT&T-DIRECTV logo
July 27, 2015

Following more than a year of review, the Federal Communications Commission (FCC) has granted approval (with conditions) of the transfer of control of licenses and authorizations from DIRECTV to AT&T Inc.

The FCC's approval clears the way for AT&T to acquire DIRECTV and merge the two companies into one combined entity, a deal worth a reported $48.5 billion. The U.S. Justice Department signed off on the deal earlier last week.

The FCC says that its decision to grant approval is based on a careful, thorough review of the record, which includes extensive economic analysis and documentary data from the applicants, as well as comments from interested parties. Based on this review, the Commission says that it has determined that granting the application, subject to certain conditions, is in the public interest.

As part of the merger, AT&T-DIRECTV will be required to expand its deployment of high-speed, fiber optic broadband Internet access service to 12.5 million customer locations, as well as to E-rate eligible schools and libraries. In addition, AT&T-DIRECTV is prohibited from using discriminatory practices to disadvantage online video distribution services, and will be required to submit its Internet interconnection agreements for FCC review. Finally, AT&T-DIRECTV will be required to offer broadband services to low-income consumers at discounted rates.

The FCC says that the conditions it has imposed on the merger address potential harms presented by the combination of AT&T, one of the nation's largest telephone and Internet service providers, and DIRECTV, the nation's largest satellite video provider. The conditions also ensure that the benefits of the merger will be realized.

These targeted conditions will remain in effect for four years after the merger closes.

AT&T-DIRECTV will also be required by the FCC to retain both an internal company compliance officer and an independent, external compliance officer that will report and monitor, respectively, the combined entity's compliance with all conditions of the merger.

"We'll now be able to meet consumers' future entertainment preferences, whether they want traditional TV service with premier programming, their favorite content on a mobile device, or video streamed over the Internet to any screen," AT&T CEO Randall Stephenson said in a statement.

Once the AT&T-DIRECTV merger is complete, the combined company will serve more than 26 million U.S. customers and more than 19 million in Latin America, making it the largest pay TV provider in the world.

View the FCC's full approval order.

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