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AT&T-DirecTV Deal Could Be Approved This Week

8 Jul, 2015 By: Doug McPherson

WASHINGTON – AT&T’s proposed $48.5 billion acquisition of DirecTV could get U.S. regulatory approval this week, according to those familiar with the deal that would create the country’s largest pay-TV company, giving DirecTV a broadband product and AT&T new avenues of growth beyond the maturing and increasingly competitive wireless service.

The Department of Justice has completed its review of the merger and is waiting on the Federal Communications Commission’s (FCC) input.

Sources say the FCC is poised to approve the deal with conditions.

On Monday, Forbes Magazine released an editorial that read in part: “Even though the merger has faced multiple roadblocks along the way, we believe that it is just a matter of time before it receives the FCC’s approval, primarily because the deal does not raise any red flags in relation to market share of the post-merger entity. Once approved, the merger will enable the DirecTV-AT&T combination to become a leader in content distribution across various platforms including mobile communications, high-speed Internet and TV.”

The FCC and AT&T have been in negotiations about conditions for the merger for several weeks but the sources have said none are controversial enough to break the deal. The conditions could include assurances that both middle-class and low-income Americans have access to affordable high-speed Internet, including an offering of a broadband subscription as a standalone service without a TV bundle.

AT&T earlier committed to expand access to broadband service in rural areas and to offer standalone Internet service at speeds of at least 6 MBps to ensure consumers can access rival video services online, such as Netflix.

FCC officials are also examining how to ensure that the conditions are properly enforced in the future, possibly through a third-party monitor. The commission is also weighing how to ensure the merged companies abide by net neutrality rules, which regulate how Internet service providers manage traffic on their networks.

AT&T has promised to abide by net neutrality principles, such as no blocking of traffic, but is challenging, in court, the FCC’s newest net neutrality regulations that have expanded the agency’s authority over various deals between Internet providers and content companies.

FCC reviewers are weighing what net neutrality-related conditions to apply to the merger and how to address the possibility that the court throws out the latest rules, the sources said.

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