UPDATED: The merger of the wireless companies was already on the ropes after August when the Justice Department said it would challenge the deal in court on antitrust grounds. Now FCC Chairman Julius Genachowski is circulating a draft order that would add an important additional barrier to the deal: It would ask an administrative law judge to consider whether the combo would serve the public interest — after the end of the Justice trial, due to begin in February. That would significantly delay and complicate the AT&T and T-Mobile’s merger plans. The last time the FCC did this — in 2002 when Echostar wanted to merge with DirecTV — the companies scrapped their plan.
Genachowski’s proposal follows a conclusion by FCC staff that consumers would be harmed if AT&T and T-Mobile merge. “The record clearly shows that — in no uncertain terms — this merger would result in a massive loss of U.S. jobs and investment” as AT&T cuts costs to make the economics of the deal work, a senior FCC official says. The agency found that there’d be less competition in 99 of the 100 biggest markets. (The exception is Omaha.) Staffers also concluded that the deal would not improve deployment of 4G services. If the FCC decides not to approve a merger like this, then it has to send the case to an administrative law judge for a court-like hearing that would look at whether the deal would serve the public … Read More »
UPDATE, 11:30 AM: DirecTV shares are up 6.3% after it reported better-than-expected sub growth in 3Q — and a three year extension of its deal with AT&T to sell co-branded TV, broadband, and wired and wireless phone services in 22 states. The agreement, which now runs through March 2015, covers areas where AT&T does not offer its U-verse video service. There’s “no material change” in the terms, DirecTV CEO Mike White told analysts in a conference call. He added that it’s “too soon to say” whether DirecTV will offer more bundles with Verizon broadband services. ”The question will be how customer friendly the (Internet usage) caps are.” White says he talks to everybody about packaging broadband service with DirecTV — and that could include Dish Network if it uses the wireless spectrum it’s amassing to sell a wireless Internet service. DirecTV is “thinking Read More »
Another layer of a cryptic Dish Network plan for its future was peeled back today when the nation’s second-largest satellite TV provider formally asked the U.S. government permission to offer a mobile high-speed Internet service. The move brings into clearer focus Dish’s potential goal: building a mega video-streaming service for itself and its newly acquired Blockbuster on a network that would bypass the broadband pipes of its cable competitors. Dish and chairman Charlie Ergen have been on a buying binge of late, including acquiring spectrum from DBSD North America and TerreStar Networks; those are the assets that Dish is asking the government to clear, according to an FCC filing, which would allow the high-speed plan to move forward. During Dish’s 2Q earnings call this month, CEO Joe Clayton said the company would not “tip its hand” to plans, but that “video is our primary objective,” including having broadband-connected set-top boxes for its subscribers and adding licensing arrangements for Blockbuster that could include subscription VOD. Its own high-speed service would supply all of this and makes sense, but the question remains how much will such a network cost to build? Already, Credit Suisse Group AG analyst Jonathan Chaplin has weighed in on that one, saying it could be “costly.” As with everything Dish-related, stay tuned.