AT&T, DirecTV And Finding A Prom Date: Reactions To Merger | WAMU 88.5 - American University Radio

NPR : News

Filed Under:

AT&T, DirecTV And Finding A Prom Date: Reactions To Merger

Play associated audio

AT&T's plan to buy DirecTV for $48.5 billion is the latest tectonic shift in the media industry, with many viewing the deal as a response to the pending merger of Comcast and Time Warner Cable.

Among business analysts and consumer advocates, response to the AT&T-DirecTV deal is mixed. Here's a roundup of what we're seeing:

"When I first heard the news, I was scratching my head," analyst Jim Nail of Forrester Research tells The New York Times. "Satellite is kind of a doomed technology. I don't see it being a long-term proposition."

Others say the merger is part of an evolution in maturing markets, as cable, satellite and broadband companies look to combine so they can find new ways to grow.

"It positions them as probably the most complete integrated telecommunications provider in the U.S.," wireless analyst Roger Entner tells NPR's Jim Zarroli on Morning Edition, "because they can provide nationwide bundles that consist of voice, Internet and TV services."

In announcing the merger Sunday, the two companies noted DirecTV's assets, such as its presence in Latin America and strong sports programming such as "exclusive pay TV rights to NFL Sunday Ticket."

"Strategically, this makes a lot of sense for AT&T," analyst Jan Dawson of Jackdaw Research tells Bloomberg News. He says that AT&T adding satellite TV "lets them go national with a video offering that matches their wireless reach."

There's a lot of nervous energy in the media business, Harold Feld of consumer advocacy group Public Knowledge tells Jim on Morning Edition:

"It's kind of like trying to find a date before the prom. The more people get picked off, the more desperate everybody else becomes to try to find somebody they can go to the dance with."

Feld adds, "As you get fewer and fewer bigger and bigger players, there is less pressure on any of them to pass on any of these savings to consumers."

Antitrust attorney David Balto says the deal could benefit TV consumers, if the addition of a competitive broadband service gives DirecTV more allure.

"I think it's going to make DirecTV a much stronger competitor," he says, "and this is a marketplace where we want to see the level of competition strengthened."

Two critics of the deal spoke to The Wall Street Journal:

"John Bergmayer, senior staff attorney with advocacy group Public Knowledge, warned that AT&T will need to demonstrate that new services would offset any harm to the wireless and video markets.

" 'The industry needs more competition, not more mergers,' " he said. 'The burden is on AT&T and DirecTV to show otherwise.'

" 'It just doesn't make sense to me,' said New Street Research analyst Jonathan Chaplin, who asserts that AT&T would be better off buying Dish Network because of that company's wireless-spectrum holdings."

AT&T and DirecTV had been discussing a merger for long before this weekend's announcement, leading some to say it has nothing to do with the Comcast-Time Warner Cable merger. But most also agree that the two huge deals will be linked, in a very real sense, as it seems unlikely that federal antitrust regulators would approve only one of the mergers.

The thinking is that when the deals are completed, only these two mega-companies would be able to counterbalance each other in the market.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

NPR

Not My Job: Travel Guru Rick Steves Gets Quizzed On Steve Ricks

Since we specialize in asking people things they know nothing about, we've decided to ask Rick Steves three questions about the people out there in the world who have his name, but reversed.
NPR

Syrup Induces Pumpkin-Spiced Fever Dreams

Hugh Merwin, an editor at Grub Street, bought a 63-ounce jug of pumpkin spice syrup and put it in just about everything he ate for four days. As he tells NPR's Scott Simon, it did not go well.
NPR

Texas Gubernatorial Candidates Go The Border To Court Voters

Republicans have won every statewide office in Texas for 20 years, but the growing Hispanic population tends to vote Democrat, and the GOP's survival may depend on recruiting Hispanic supporters.
NPR

Tech Week: Smartphone Privacy, Cyberstalking, Alibaba's Big Debut

Chinese e-commerce giant Alibaba makes the biggest debut on the NYSE ever. The details, and the other tech stories that piqued our interest, are in this week's roundup.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.