AT&T is poised to win government approval for its $49 billion purchase of DirecTV.
Federal Communications Commission Chairman Tom Wheeler said Tuesday he plans to approve the merger with certain conditions. The Justice Department also announced that it will not challenge the deal.
The mega-merger will make AT&T the largest TV provider in the country, beating out Comcast, which abandoned its own merger with Time Warner Cable earlier this year in the face of opposition from the FCC and Justice Department.
“After an extensive investigation, we concluded that the combination of AT&T’s land-based Internet and video business with DirecTV’s satellite-based video business does not pose a significant risk to competition,” Bill Baer, the head of the Justice Department’s Antitrust Division, said in a statement.
Two more of the five FCC commissioners must still sign off on the deal, but that’s not expected to hold up the formal approval for long.
To get Wheeler’s support, AT&T had to agree to make high-speed fiber Internet available to 12.5 million additional customers. In an attempt to “build on” the agency’s net-neutrality rules, Wheeler also got AT&T to promise not to exempt its own video services from the data caps on its home Internet connections. The company also promised to submit any Internet traffic agreements to the FCC for review, along with reports on its network performance.
The FCC plans to appoint an independent officer to ensure that AT&T abides by the conditions.
“These strong measures will protect consumers, expand high-speed broadband availability, and increase competition,” Wheeler said in a statement.
Although the FCC chief didn’t identify other conditions, AT&T is also expected to promise to provide low-cost Internet to poor consumers, among other measures.
Winning approval for the deal is a bit of redemption for AT&T lawyers and lobbyists, who had their 2011 bid for T-Mobile blocked over competition concerns.
The deal with DirecTV generated less of a backlash from consumer advocates because AT&T will not be eliminating a direct competitor. The company aims to use DirecTV’s offerings to add satellite TV to its bundles of phone and Internet service.
“We are pleased the Department of Justice has completed its review of our acquisition of DirecTV,” AT&T said in a statement Tuesday. “We look forward to gaining the approval of the Federal Communications Commission so we can quickly begin providing consumers with the benefits of this combination.”
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