Home » DirecTV » Recent Articles:

DirecTV Suffering Nationwide Rolling Channel Blackout

Phillip Dampier March 8, 2016 Consumer News, DirecTV No Comments

Life with DirecTV hasn’t gotten much better with AT&T running the show. The satellite provider this afternoon reported a nationwide service outage that customers are describing as a “rolling channel blackout.”

DirecTV confirmed the outage this afternoon on Twitter:

“I have rolling channel outages, started with HGTV and TLC, now all my children’s channels are out plus many more, since around 1:30pm ET,” said Carrie Pierce of Stafford, Va.

Some customers report some channels are gradually being restored.

“Most channels back up in LA,” writes Orcutt Guy. “Thanks AT&T for breaking DirecTV just like your phone service. We can now see what you have brought to a once great service… not much.”

AT&T Gets Stingy With DirecTV Promotions for Existing Customers; $100+ for TV-Only Service

directvDirecTV under AT&T’s ownership is turning out to be no bargain for customers finding it increasingly tough getting a promotional rate package with the satellite provider.

Fred Johnson has been a DirecTV customer in rural Iowa for almost six years and has had to call DirecTV every time his on-contract promotion nears an end. Off-contract customers generally do not receive the best promotions and DirecTV’s regular prices can make the average cable company blush.

“It is not unusual for DirecTV customers to get quoted rates of $80 a month for satellite television and then receive a bill for over $100 once the surcharges, rental fees, taxes, and other hidden fees are added to your bill,” Johnson tells Stop the Cap! “There are months when the bill can go up even higher with no explanation, and even the customer service department cannot explain all the mysterious charges.”

At the end of the usual two-year contract, it has become customary for many long time DirecTV customers to call and threaten to cancel if they cannot get a renewed promotional rate, and for years DirecTV had been happy to oblige.

In 2015, AT&T bought the satellite provider and is in the process of integrating it as part of the AT&T family of services, next to U-verse, AT&T Mobility, and traditional landline service. That is the year the discounts seemed to evaporate for customers like Johnson and Evelyn Wiedmer, who subscribes to DirecTV for the family’s recreational vehicle.

Recreational vehicle owners are among the most loyal to satellite television.

Recreational vehicle owners are among the most loyal to satellite television.

“We were just told our bill was going to increase $45 a month starting in February and there is little we can do about it,” Wiedmer tells us. “The call center lady mentioned that the new owner of DirecTV is going in a different direction with promotions and we no longer qualify for any specials, unless we also want to get an AT&T cell phone.”

Wiedmer and her husband are retired and travel the country in their RV and do not have room in the budget to pay AT&T an extra $540 a year for the same package of channels they used to get for about $65 a month.

“They apparently do not want us to be customers anymore because DISH Networks will sell us a comparable package for about $60 a month, which is much less than the $105 DirecTV is charging us starting next month,” Wiedmer writes. “It looks like DirecTV won’t be competing with AT&T U-verse and the cable company anymore at their prices.”

Critics charge that is exactly the point. Adam Levine-Weinberg called the AT&T-DirecTV merger “one more step towards oligopoly,” warning approval of the merger would remove a serious competitor for tens of millions of customers also served by AT&T U-verse.

“That means there [were] tens of millions of people who [had] a choice between AT&T and DirecTV (as well as the local cable company and satellite TV rival DISH Networks,” said Levine-Weinberg. “The merger [reduced] many consumers’ pay-TV options from four to three, giving the remaining companies more pricing power.”

AT&T is flexing that pricing power by pulling back on promotions and discounts. In addition to curtailing retention plans and promotions for existing customers, AT&T also announced rate increases for DirecTV that take effect tomorrow:

The monthly pre-tax price of DirecTV’s “Select” and “Entertainment” programming tiers will go up by $2, to $51.99 and $61.99, respectively. The “Choice” and “Xtra” bundles will increase $4 to $74.99 and $81.99, respectively; the “Ultimate” pack will go up $5 a month to $91.99; and the “Premier” bundle will grow by $8 to $144.99. That is well over $150 a month after taxes and fees are added, just to watch television. AT&T is also applying a 50 cent increase to a fee DirecTV charges for… selling television service. The so-called “TV Fee” will now cost $7.00 a month.

(Courtesy: zidanetribal17)

(Courtesy: zidanetribal17)

“You used to switch to satellite to save money, but now cable companies offer returning customers lower prices than what DirecTV will offer,” notes Johnson. “It’s almost like they want to drive customers away. It worked. Our neighbors are now collecting money to convince Mediacom to extend their cable down our rural street and after these price increases we finally have enough willing to contribute to switch to cable television and remove the satellite dishes from our rooftops.”

Wiedmer has also canceled her DirecTV service this week, switching to DISH Networks.

“Would you sign another two-year contract agreeing to pay $540 more a year for two years with nothing in return for the extra money?” Wiedmer asks. “AT&T and DirecTV can take a hike.”

AT&T Leveraging Its DirecTV Acquisition to Cut Customer Promotions, Raise Prices

yay attWith one less significant competitor in the marketplace, AT&T feels safe cutting back customer promotions to raise prices and profitability, even if it means losing customers.

AT&T’s original argument for acquiring DirecTV was to negotiate cost savings from cable programmers by qualifying for greater volume discounts available from combining 5.7 million U-verse TV customers with DirecTV’s roughly 20.3 million U.S. subscribers. But AT&T has now made it clear it is keeping those savings for itself.

“We have our target to get to $2.5 billion or more in savings,” said John J. Stephens, AT&T’s chief financial officer, in a conference call with investors. “We already are realizing some of that in our content and supplier relationships. We really like our momentum here, and we are confident we can continue to expand margins and cut costs, even with pressure from our international operations.”

At the same time AT&T is enjoying billions in savings, in recognition of the fact its customers now have fewer competitors with whom they can do business, the time is right to cut back on money-saving promotional plans, effectively raising prices for customers.

“Because of our focus on profitability, we really got away from promotional pricing, and those customers who were cost-sensitive just had a propensity to churn,” Stephens said, referring to an industry term that means customers canceled service either because it got too expensive or they found a better deal elsewhere.

Stephens

Stephens

Stephens told investors its new pricing strategy, as expected, brought reductions in the number of U-verse video subscribers during the latest quarter. The company is also pushing more customers towards DirecTV and away from U-verse because programming costs are lower on the satellite platform. The new focus on profits means fewer customers are choosing AT&T and many existing DSL customers are resisting efforts to force them on to the U-verse platform.

“Net adds dropped with fewer promotions and shifting our focus to the lower content cost DirecTV platform,” Stephens admitted. “We added 192,000 IP broadband customers in the quarter, as migrations from our DSL base continued to slow. U-verse video losses also put some pressure on broadband numbers due to our high attachment rates.”

Stephens noted the customer growth declines occurred at the same time pressure on AT&T’s costs are dropping significantly. In October, the company signed an agreement with Viacom for its cable programming networks Stephens says represents “best-in-industry pricing,” made possible from the enhanced volume discounts AT&T now receives.

DirecTV will also allow AT&T to curtail additional U-verse expansion into its more rural service areas.

att directv“They don’t have television in these areas, or I should say we didn’t have a video offering,” Stephens said of AT&T’s rural customer base, mostly still dependent on DSL. With its ownership of a satellite TV provider, there is less urgency to expand rural U-verse. “These were generally out of the U-verse footprint, but now we do. And now we’ll be able to provide them with a video offering through DirecTV, and we’re very pleased with that. So we are hopeful that now this nationwide video service will help us in improving our overall broadband positioning.”

AT&T’s deal with the government to win approval of its merger with DirecTV committed the company to expand high-speed fiber optic broadband to at least 12.5 million customer locations and offer discounts to low-income customers. AT&T’s interpretation of the agreement means it will expand broadband service mostly in urban areas while continuing to allow its rural DSL broadband networks to lose customers.

“Over the last few years, the real trend has been a migration from DSL to IP broadband [eg. U-verse],” Stephens said. “And that’s been something that we’ve encouraged ourselves, and we’re beginning to complete that process or near completion where the DSL customers we have left is a much lower percentage than [those with U-verse] broadband capabilities from us.”

att cricket“I’m going to tell you, I think on the consumer side we’re down into the two million range on total DSL customers,” Stephens said. “[…] I would suggest to you it has changed dramatically over the course of four or five years, where it used to be 90% plus of our broadband base and now it’s a much lower percentage. So we’ve gone through that migration not completely, but almost completely.”

AT&T’s commitment to aid low-income customers is not clear, as customers report AT&T less willing to offer or extend money-saving promotions. On the wireless side of AT&T’s business, the company is increasingly pushing price-sensitive customers out of its network.

“Our focus is to provide the best customer experience while increasing profitability and not just chase customer counts,” Stephens said. “Our third quarter results drive that point home. We had our highest ever wireless service [profit] margins at 49.4%.”

In particular, AT&T is sacrificing its low-revenue feature phone customers by cutting back on handset choices and trying to shift certain prepaid customers to the less venerable Cricket brand. AT&T acquired Cricket from Leap Wireless in the spring of 2014. It completed a nationwide shutdown of Cricket’s competitive CDMA wireless network this fall and has pushed Cricket’s current customer base onto AT&T’s GSM network, often at a higher cost to customers.

Stephens reported AT&T Cricket customers now pay nearly $10 more a month than departing AT&T customers that maintained postpaid feature phones until the end of their two-year contracts.

“On the churn, first and foremost, yes, the feature phone churn is hitting us and having an impact on us, and those are decisions we made not to chase those customers,” Stephens informed investors. “[We] can’t make the math work not only on the pricing for those customers but the impact throughout our base.”

Stephens claimed profits are now AT&T’s number one priority.

“We’re going to be focused on profitable growth, not just chasing customer counts or specific targets,” Stephens said. “We’re going to really be focused on just getting the most profits out of the business.”

TV Station Eclipse: 150+ Stations Could Be Blacked Out Thursday for U-verse, Dish, DirecTV Customers

Phillip Dampier September 29, 2015 AT&T, Consumer News, DirecTV, Dish Network No Comments

Disputes over money may leave AT&T U-verse, Dish, and DirecTV customers staring at black screens on Thursday as three major station groups collectively representing more than 150 local over the air stations threaten to drop them if their respective carriage renewal deals are not signed.

  • AT&T U-verse customers would lose access to 42 Tribune Media stations in markets like Chicago, Los Angeles, San Diego, Washington, and New Orleans.
  • Media General’s 71 stations would be removed from DirecTV in cities like San Francisco, Buffalo, Austin, and Columbus, Ohio.
  • Tegna (formerly Gannett) is ready to pull the plug on its 51 stations on Dish Network in cities like Washington, Dallas, Houston, Atlanta, Buffalo, New Orleans, and Seattle.

wgn

Weary customers are now enduring dire warnings their favorite local stations are about to be removed, with suggestions greedy providers won’t pay a fair price for their programming. Providers counter the station owners often demand double the rate providers paid under the old contract. Providers then pass those price increases along to the same customers that also get upset when stations and networks are blocked during hardball negotiating sessions.

Customers are fed up watching different disputes play out several times a year, often resulting in the loss of programming they paid to receive.

“It’s bad enough that we are losing channels but the bill never goes down either,” noted Dish customer Allen Gayla Shaw on the satellite provider’s Facebook page.

“I’m tired of providers holding viewers hostage for your egos,” echoed Sandi Montgomery Cockroft.

Approval of AT&T-DirecTV Merger Expected Next Week

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

WASHINGTON (Reuters) – AT&T Inc’s proposed $48.5 billion acquisition of DirecTV is expected to get U.S. regulatory approval as soon as next week, according to people familiar with the matter, a decision that will combine the country’s No. 2 wireless carrier with the largest satellite-TV provider.

The Department of Justice, which assesses whether deals violate antitrust law, has completed its review of the merger and is waiting on the Federal Communications Commission to wrap up its own, according to three people familiar with the matter.

The FCC, which reviews if deals are in public interest, is poised to approve the deal with conditions as early as next week, according to three other people familiar with the matter.

All the sources asked not to be named because they were not authorized to speak with the media. An AT&T spokeswoman and FCC spokesman declined comment. Justice Department representatives were not immediately available for comment.

AT&T’s merger with DirecTV, announced in May 2014, 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 deal has been expected to pass regulatory muster in contrast with the rival mega-merger between cable and Internet providers Comcast and Time Warner Cable, which was rejected in April largely over the combined companies’ reach into the broadband market.

The FCC and AT&T have been in negotiations over conditions for the merger for several weeks, the people said, adding that none of the conditions are controversial enough to break the deal.

Those conditions are expected to include assurances that both middle-class and low-income Americans have access to affordable high-speed Internet, including an offering of broadband subscriptions as a standalone service without a TV bundle, according to two of the people.

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

FCC officials are also considering ways to ensure that the conditions are properly enforced in the future, possibly through a third-party monitor, according to the two sources.

The FCC is also weighing how to ensure the merged companies abide by the so-called 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 two sources said.

Reported by: Alina Selyukh and Diane Bartz

Cable Companies Demand Satellite Providers Pay Up; Customer Bills Expected to Rise

directvTwo cable industry trade associations have asked the Federal Communications Commission to start collecting more fees from satellite television operators to cover the FCC’s regulatory expenses — a move satellite providers argue will cause consumers to suffer bill shock from increased prices.

The American Cable Association and the National Cable & Telecommunications Association have filed comments with the FCC asking the commission to impose the same regulatory fees on satellite subscribers that cable companies are likely to pay in 2015 — 95 cents a year per subscriber.

The FCC has proposed initially charging satellite operators $0.12 this year per customer, or about one cent a month. The two cable lobbying groups want that 12 cent fee doubled to 24 cents and then raised an additional 24 cents each year until it reaches parity with what cable companies pay.

dish logo“The FCC is off to a good start by declaring that Dish and DirecTV should pay regulatory fees to support the work of the agency’s Media Bureau for the first time and proposing setting the initial per subscriber fee at one cent per month in 2015,” said Matthew Polka, president and CEO of the ACA. “But given the FCC proposes that cable operators pay nearly 8 cents per month, per customer, it must do more, including requiring these two multibillion dollar companies with national reach to shoulder more of the fee burden next year that is now disproportionately borne by smaller, locally based cable operators.”

The satellite industry has filed their own comments with the FCC objecting to any significant fee increases, claiming it will cause consumers to experience bill shock and that satellite companies pose less of a regulatory burden on the FCC in comparison to cable operators.

The ACA counters that even if the satellite companies were required to pay the full 95 cents this year — the same rate small independent cable operators pay — it would add a trivial $0.08 a month to customer bills — less than a 0.4% increase on the lowest priced introductory offer sold by satellite providers.

fccThe ACA reminded the FCC it did not seem too concerned about rate shock when it imposed a 99 cent fee on IPTV providers like AT&T U-verse in 2014 without a phase-in.

DirecTV and Dish argue the FCC has jurisdiction over cable’s television, phone and Internet packages — a more complex assortment of services. Satellite providers currently only sell television service, so charging the same fee cable companies pay would be disproportionate and unfair, both claim.

Despite the sudden introduction of the IPTV fee last year, AT&T managed to use the opportunity to turn lemons into lemonade.

AT&T added a “Regulatory Video Cost Recovery Charge” on customers’ bills after the FCC assessed a 99 cent fee on IPTV services like U-verse in 2014. But AT&T charged nearly three times more than what it actually owed. U-verse customers were billed $0.24 a month/$2.88 in 2014 for “regulatory fee cost recovery.” But AT&T only paid the FCC $0.99 for each of its 5.7 million customers. It kept the remaining $1.89 for itself, amounting to $10,773,000 in excess profit.

This year the FCC expects to collect $0.95 from each U-verse subscriber, a four cent decline.

AT&T’s Acquisition of DirecTV Will Likely Be Approved With a Number of Conditions

att directvWhile consumer groups were busy fighting the Comcast-Time Warner Cable merger, AT&T’s $49 billion purchase of DirecTV has largely flown under the radar, with no comparable organized consumer opposition to the deal. But that does not mean the FCC will approve it as-is.

Negotiations with federal regulators and an exchange of regulatory filings and comments between AT&T, the FCC, and deal critics have apparently forced AT&T to agree to several concessions to make regulators amenable to approving the transaction.

The Washington Post reports that chief among those concessions is AT&T’s willingness to voluntarily abide by certain Net Neutrality rules regardless of any court challenges, including banning the slowing or blocking of websites and agreeing not to accept payments from website operators to speed up their content. AT&T has not said how long it intends to keep that commitment.

Deal opponents are also seeking other concessions from AT&T:

No paid interconnection deals: AT&T must route incoming content to customers without any fees charged to the companies originating the traffic. This became a hot button issue when Netflix felt it was forced to pay Comcast a fee to assure its streamed video content would reach Comcast customers without buffering or other errors. AT&T is expected to fiercely oppose this condition and says it should have the right to make private deals with content delivery firms.

AT&T must offer standalone broadband: With AT&T’s acquisition of DirecTV, more than ever it will have an incentive to sell customers a television bundle with Internet service. Regulators want AT&T to assure broadband-only service remains readily available. AT&T has offered 6Mbps DSL for $34.95 a month as its standalone option. Content delivery firms like Cogent want AT&T to offer 25Mbps service in all of AT&T’s markets for $29.95 a month for at least seven years. The FCC recently defined 25Mbps the minimum speed to qualify as broadband.

No end runs around Net Neutrality with data caps and exemptions: AT&T wants the right to exempt its preferred partners from its usage caps and claims that is beneficial to consumers. But cap opponents claim that is simply another way to collect money from content companies for preferential treatment — an end run around Net Neutrality rules. Opponents of these cap exemptions, known as “zero-rating” claim all content should be treated the same. AT&T could resolve this by removing data caps from its DSL and U-verse services altogether.

J.D. Power & Associates Tie Vote! Hemorrhagic Fever vs. Comcast vs. Time Warner Cable

Phillip Dampier October 13, 2014 AT&T, CenturyLink, Charter, Comcast/Xfinity, Cox, DirecTV, Dish Network, Editorial & Site News, Frontier, Time Warner Cable, Verizon, WOW! Comments Off on J.D. Power & Associates Tie Vote! Hemorrhagic Fever vs. Comcast vs. Time Warner Cable

jd powerLove can be a fickle thing.

Take Comcast’s affair with J.D. Power & Associates, for example. In Comcast’s filings with regulators, it is very proud that J.D. Power cited Comcast for the most improvement of any cable operator scored by the survey firm. Comcast touted the fact it had managed to increase its TV satisfaction score by a whopping 92 points and Internet satisfaction was up a respectable 77 points. (Comcast didn’t mention the fact J.D. Power rates companies on a 1,000 point scale or that it took the cable company four years to eke out those improvements.)

Last month, J.D. Power issued its latest ranking of telecommunications companies and… well, the love is gone.

If customer alienation was an Olympic event, J.D. Power awarded tie gold medals to both Comcast and Time Warner Cable for their Kafkaesque race to the bottom.

The survey of customer satisfaction largely found only dissatisfaction everywhere in the country J.D. Power looked. While Comcast likes to cite its “customer-oopsies-gone-viral” blunders as “isolated incidents,” J.D. Power finds them epidemic nationwide.

skunkThe highest rating across television and broadband categories achieved by either cable company was ‘Meh.’ J.D. Power diplomatically scored both cable companies on a scale that started with “among the best” as simply “the rest.” Customers in the west were the most charitable, those in the south and eastern U.S. indicated they were worked to their last nerve.

“The ability to provide a high-quality experience with all wireline services is paramount as performance and reliability is the most critical driver of overall satisfaction,” said Kirk Parsons, senior director of telecommunications, in a statement.

Having competition available from a high-scoring provider also demonstrates what is possible when a company actually tries to care about customer service. In the same regions Comcast fared about as popular as hemorrhagic fever, WOW! Cable and Verizon FiOS easily took top honors. Even AT&T U-verse scored far higher than either cable company, primarily because AT&T offers very aggressive promotional packages that include a lot for a comparatively low price.

Other cable and smaller phone companies didn’t do particularly well either. Frontier and CenturyLink both earned dismal scores and Charter Cable only managed modest improvement. The two satellite television companies did fine in customer satisfaction for television service, but it was the two biggest phone companies that managed the best scores for Internet service. Among cable operators, only independents like WOW! (and to a lesser extent Cox) did well in the survey.

If J.D. Power is the arbiter of good service Comcast seems to claim it to be, the ratings company just sent a very clear message that when it comes to merging Comcast and Time Warner Cable, anything multiplied by zero is still zero.

J.D. Power ranking (Image courtesy: Reviewed.com)

J.D. Power ranking (Image courtesy: Reviewed.com)

Antitrust Us: Is ComVerizablAsT&TWCDirecTV Really Best for American Broadband?

Phillip Dampier July 2, 2014 Astroturf, AT&T, Broadband "Shortage", Broadband Speed, Comcast/Xfinity, Competition, Consumer News, DirecTV, Editorial & Site News, Internet Overcharging, Net Neutrality, Public Policy & Gov't, Rural Broadband, Time Warner Cable, Video Comments Off on Antitrust Us: Is ComVerizablAsT&TWCDirecTV Really Best for American Broadband?
Bad enough

Bad enough

A big company needs a big name, and so what if you can’t say it out loud, so long as your check reaches the cable cartel on time to avoid those inconvenient late fees.

The shock waves of the $45 billion dollar proposed merger of Comcast and Time Warner Cable (not to mention AT&T and DirecTV) have reached as far as Great Britain where appalled editorial writers in the British press are pondering whether Washington has lost its mind or just its integrity… or a combination of both, by actually contemplating the unthinkable rebirth of the American Robber Baron.

Only instead of railroads powering America’s early 20th century economy, today its broadband. Overseas, broadband is plentiful, fast, and cheap. Back home, cable operators are hard at work in a comfortable monopoly/duopoly working on excuses to justify Internet rationing with usage caps, outrageous equipment rental fees, rate hikes, and usage billing for a product about as cheap to offer as a phone call on one of those unlimited calling plans you probably already have.

From The Economist:

“On “OUTLAW”, a drama that aired on NBC, a Supreme Court justice leaves the bench to join a law firm. In real life he might have begun working for Comcast, America’s largest cable company, which owns NBC. Many of Washington’s top brass are on Comcast’s payroll, including Margaret Attwell Baker, a former commissioner of the Federal Communications Commission (FCC), America’s telecoms regulator, who in government had helped approve Comcast’s takeover of NBCUniversal in 2011. Even Barack Obama has Comcast ties. “I have been here so much, the only thing I haven’t done in this house is have seder dinner,” he quipped at a fundraiser hosted last year at the home of David Cohen, Comcast’s chief lobbyist.

“It helps to have influential friends, especially if you are seeking to expand your grip on America’s pay-TV and broadband markets.

“[…] The deal would create a Goliath far more fearsome than the latest ride at the Universal Studios theme park (also Comcast-owned). Comcast has said it would forfeit 3m subscribers, but even with that concession the combination of the two firms would have around 30m—more than 30% of all TV subscribers and around 33% of broadband customers. In the cable market alone (ie, not counting suppliers of satellite services such as DirecTV), Comcast has as much as 55% of all TV and broadband subscribers.

Worse

Worse

“Comcast will argue that its share of customers in any individual market is not increasing. That is true only because cable companies decided years ago not to compete head-to-head, and divided the country among themselves. More than three-quarters of households have no choice other than their local cable monopoly for high-speed, high-capacity internet.

“For consumers the deal would mean the union of two companies that are already reviled for their poor customer service and high prices. Greater size will fix neither problem. Mr Cohen has said, “We’re certainly not promising that customer bills are going to go down or even that they’re going to increase less rapidly.” Between 1995 and 2012 the average price of a cable subscription increased at a compound annual rate of more than 6%.”

Before blaming it all on President Obama’s close relationship with Comcast’s top executives, it was the Republicans in Washington that set this tragic monopolistic farce into motion. Michael Powell, President George W. Bush’s idea of the best man in America to protect the public interest at the FCC, represented the American people about as well as ‘Heckuva Job Brownie.’ Instead of promoting competition, Powell used his time to beef-up his résumé for a very cushy post-government job heading America’s top cable lobby – the National Cable & Telecommunications Association. Attwell-Baker was even more shameless, departing the FCC for her sweet new executive digs at Comcast just a short time after enthusiastically voting in favor of its NBCUniversal merger deal.

snakePowell and others made certain that Internet Service Providers would not be classified as “common carriers,” which would require them to rent their broadband pipes at a reasonable wholesale rate to competitors. The industry and their well-compensated friends in the House and Senate argued such a status would destroy investment in broadband expansion and innovation. Instead it destroyed the family budget as prices for mediocre service in uncompetitive markets soared. Today, consumers in common carrier countries including France and Britain pay a fraction of what Americans do for Internet access, and get faster speeds as well.

Letting Comcast grow even larger, The Economist argues, will allow one company to dominate not just your Internet experience, but also the content consumers access and at what speed.

“There is plenty for Mr Obama and Mr Cohen to discuss at their next dinner,” concludes the magazine. “But better yet, officials could keep their distance from Comcast, and reject a merger that would reduce competition, provide no benefit to consumers and sap the incentive to innovate.”

Considering the enormous sums of money Comcast has shown a willingness to spend on winning over supporters for its business agenda, restraint on the part of Washington will need voter vigilance, much the same way calling out non-profits who gush over Comcast while quietly cashing their contribution checks must also be fully exposed to regulators who will ultimately decide the fate of the merger.

http://www.phillipdampier.com/video/Antitrust Us.mp4

Antitrust Us: Cartoonist Mark Fiore takes on the corporate idea that merging cable companies together creates more competition. (1:50)

United States of AT&T: DirecTV Acquired by AT&T in $48.5 Billion Deal

Phillip Dampier May 19, 2014 AT&T, Competition, Consumer News, DirecTV, Editorial & Site News, Online Video, Public Policy & Gov't, Rural Broadband, Video Comments Off on United States of AT&T: DirecTV Acquired by AT&T in $48.5 Billion Deal
http://www.phillipdampier.com/video/WSJ ATT Buys DirecTV 5-19-14.flv

For $48.5 billion, AT&T will vault itself into second place among the nation’s largest pay television providers with the acquisition of DirecTV. The Wall Street Journal reports the executives at AT&T have been looking to for a giant deal for several years. Most executives earn special bonuses and other incentives worth millions for successfully completing these kinds of transactions. (3:03)

AT&T plans to spend $48.5 billion to acquire the nation’s biggest satellite television provider, allowing AT&T to become the second largest pay television company, behind a merged Comcast and Time Warner Cable.

att directvThe deal, finalized on Sunday, pays $95 per DirecTV share in a combination of stock and cash, about a 10% premium over DirecTV’s closing price on Friday. Including debt, the acquisition is AT&T’s third-largest deal on record, behind the purchase of BellSouth for $83 billion in 2006 and the deal for Ameritech Corp., which closed in 1999, according to data compiled by Bloomberg.

“This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens – mobile devices, TVs, laptops, cars and even airplanes. At the same time, it creates immediate and long-term value for our shareholders,” said Randall Stephenson, AT&T chairman and CEO. “DirecTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business. DirecTV is a great fit with AT&T and together we’ll be able to enhance innovation and provide customers new competitive choices for what they want in mobile, video and broadband services. We look forward to welcoming DirecTV’s talented people to the AT&T family.”

The announced acquisition has left some on Wall Street scratching their heads.

“Like any merger born of necessity rather than opportunity, the combination of AT&T and DirecTV calls to mind images of lifeboats and rescues at sea,” telecommunications analyst Craig Moffett of MoffettNathanson Research wrote this week. AT&T, Moffett wrote, is in “dire need of a cash producer to sustain their dividend.”

http://www.phillipdampier.com/video/Bloomberg ATT DirecTV Deal a Head Scratcher 5-19-14.flv

Craig Moffett, founder of MoffettNathanson LLC, talks about AT&T Inc.’s plan to buy DirecTV for $48.5 billion. Moffett speaks with Tom Keene, Scarlet Fu, William Cohan, and Adam Johnson on Bloomberg Television’s “Surveillance.” StockTwits founder Howard Lindzon also speaks. (5:12)

pay market shareThe deal would combine AT&T’s wireless, U-verse, and broadband networks with DirecTV’s television service, creating bundling opportunities for some satellite customers. As broadband becomes the most important component of a package including phone, television, and Internet access, not being able to offer broadband has left satellite TV companies at a competitive disadvantage. AT&T’s U-verse platform – a fiber to the neighborhood network – has given AT&T customers an incremental broadband speed upgrade, but not one that can necessarily compete against fiber to the home or cable broadband.

Some analysts are speculating AT&T will eventually shut down its U-verse television service and dedicate its bandwidth towards a more robust broadband offering. Existing television customers would be offered DirecTV instead.

But deal critics contend AT&T is spending a lot of money to buy its competitors instead of investing enough in network upgrades.

“The amount of cash alone AT&T is spending on this deal — $14.55 billion — is as much as it cost Verizon for its entire FiOS deployment, which reaches more than 17 million homes,” Free Press’ Derek Turner tells Stop the Cap! “Add in the $33 billion in AT&T stock and $18.6 billion in debt, and you can see just how wasteful this merger is.”

In effect, AT&T is spending nearly $50 billion to buy DirecTV’s customer relationships, its satellite platform, and its agreements with programmers, all while removing one competitor from the market. Cable has 54 percent of the pay TV market, satellite has 34 percent, and AT&T and Verizon share 11 percent. AT&T’s U-verse has 5.7 million TV customers. DirecTV has 20.3 million. Combining the two gives AT&T 26 million television customers, second only to Comcast/Time Warner Cable.

Rural Americans will effectively see their choice in competitors drop by one-third, giving them the option of the phone company or Dish Network.

AT&T intends to persuade regulators to approve the deal despite its antitrust implications by offering several commitments the company says are in the public interest and protect consumers:

  • 15 Million Customer Locations Get More High Speed Broadband Competition. AT&T will use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today, utilizing a combination of technologies including fiber to the premises and fixed wireless local loop capabilities. This new commitment, to be completed within four years after close, is on top of the fiber and Project VIP broadband expansion plans AT&T has already announced. Customers will be able to buy broadband service stand-alone or as part of a bundle with other AT&T services.
  • Stand-Alone Broadband. For customers who only want a broadband service and may choose to consume video through an over-the-top (OTT) service like Netflix or Hulu, the combined company will offer stand-alone wireline broadband service at speeds of at least 6Mbps (where feasible) in areas where AT&T offers wireline IP broadband service today at guaranteed prices for three years after closing.
  • Nationwide Package Pricing on DIRECTV. DIRECTV’s TV service will continue to be available on a stand-alone basis at nationwide package prices that are the same for all customers, no matter where they live, for at least three years after closing.
  • Net Neutrality Commitment. Continued commitment for three years after closing to the FCC’s Open Internet protections established in 2010, irrespective of whether the FCC re-establishes such protections for other industry participants following the DC Circuit Court of Appeals vacating those rules.
  • Spectrum Auction. The transaction does not alter AT&T’s plans to meaningfully participate in the FCC’s planned spectrum auctions later this year and in 2015. AT&T intends to bid at least $9 billion in connection with the 2015 incentive auction provided there is sufficient spectrum available in the auction to provide AT&T a viable path to at least a 2×10 MHz nationwide spectrum footprint.

a dtv 2

http://www.phillipdampier.com/video/CNN ATT DirecTV Merger 5-19-14.flv

CNN says AT&T’s buyout of DirecTV is about getting video programming to customers using all types of technology, but public interest groups suspect it’s about reducing competition. (1:17)

A closer look at AT&T’s commitments exposes several loopholes, however.

AT&T U-verse and DirecTV compete head-on in these areas.

AT&T U-verse and DirecTV compete head-on in these areas.

  • AT&T’s “commitment” to expand broadband to 15 million new locations is in addition to their Project VIP U-verse expansion now underway. However, AT&T does not say how many rural customers will see wired U-verse service finally become available vs. how many will lose their landlines permanently and have to rely on AT&T’s wireless landline replacement and expensive, usage-capped wireless broadband;
  • AT&T’s speed commitment is largely unenforceable and falls apart with language like, “where feasible.” Anywhere they don’t deliver 6Mbps DSL speed can easily be explained away as “unfeasible.” AT&T also only commits to providing DSL where it already offers DSL, so no expansion there;
  • The FCC’s Net Neutrality protections never covered wireless and three years is a very short time to commit to the “light touch” approach the FCC had with Net Neutrality back in 2010;
  • AT&T’s wireless auction commitment comes with loopholes like “meaningfully,” “provided there,” and “a viable path to at least.”

“You can’t justify AT&T buying DirecTV by pointing at Comcast’s grab for Time Warner, because neither one is a good deal for consumers,” said Delara Derakhshani, policy counsel for Consumers Union, the advocacy arm of Consumer Reports. “On the heels of Comcast’s bid for Time Warner Cable, AT&T is going to try to pull off a mega-merger of its own. These could be the start of a wave of mergers that should put federal regulators on high alert.  AT&T’s takeover of DirecTV is just the latest attempt at consolidation in a marketplace where consumers are already saddled with lousy service and price hikes. The rush is on for some of the biggest industry players to get even bigger, with consumers left on the losing end.”

“The captains of our communications industry have clearly run out of ideas,” said Craig Aaron, president of Free Press. “Instead of innovating and investing in their networks, companies like AT&T and Comcast are simply buying up the competition. These takeovers are expensive, and consumers end up footing the bill for merger mania. AT&T is willing to pay $48.5 billion and take on an additional $19 billion in debt to buy DirecTV. That’s a fortune to spend on a satellite-only company at a time when the pay-TV industry is stagnating and broadband is growing. For the amount of money and debt AT&T and Comcast are collectively shelling out for their respective mega-deals, they could deploy super-fast gigabit-fiber broadband service to every single home in America.”

http://www.phillipdampier.com/video/CNN Al Franken Skeptical About DirecTV Deal 5-19-14.flv

Sen. Al Franken (D-Minn.) appeared on CNN’s New Day this morning to express his skepticism about the consumer benefits of a merger between AT&T and DirecTV. “We need more competition, not less.” (2:40)

Search This Site:

Contributions:

Recent Comments:

  • Eufemia Deemer: Savvy comments . I am thankful for the information ! Does anyone know if my company might be able to find a fillable OPM OF-306 document to edit ?...
  • Jorge Schuldt: Savvy ideas - Incidentally if you want a a form , my boss encountered a blank form here http://goo.gl/J4D1Oz....
  • Paul Houle: Wow. On a bad day I wonder if this is a key part of the endgame of the Republican party. They see a minority-majority US coming so they try to s...
  • bern jenkins: Good commentary . I loved the points - Does anyone know if I would be able to find a fillable a form form to fill in ?...
  • jennifer: Horrific customer service. But don't worry, I was assured I'd have a technician come fix my internet a week from today. :/...
  • Kyle: It has nothing to do with consumer choice on broadband. It has to do with unelected bureaucrats in the FCC, who are not accountable to congress (the p...
  • Bryan: I would never support anyone who directly or indirectly would want to limit consumer choices for internet. If a municipality can provide faster and c...
  • Kyle: The FCC is not a federal court. They should not be able to overturn state or local law. This has nothing to do with municipal broadband. It has to do ...
  • Johanna D.: Moved out of state for my job in March, was waiting for a final verizon bill, and received 3 bills from fronteir all dated the same day with different...
  • Clinton Kirk: It's not that Sen. Cruz is against the expansion of Broadband in growing communities. The issue is that it should be the States decision and not some...
  • Dahlia: If you do let me know, I will join. They try to say I used 865GB in one month and charged me an extra 20$ for overages. That is BS, there is no way in...
  • Sherice Cuadra: Timely article ! I learned a lot from the facts - Does anyone know if my business might be able to grab a blank a form copy to work with ?...

Your Account: