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From Antitrust Law Daily, July 22, 2015

Justice Department will not challenge AT&T’s acquisition of DirecTV

By Greg Hammond, J.D.

The U.S. Department of Justice Antitrust Division has closed its investigation into AT&T Inc.’s proposed $48 billion acquisition of DirecTV. Similarly, the Federal Communications Commission (FCC) has announced that it is circulating a proposed order to approve the transaction with certain conditions.

If the deal is approved, 12.5 million customer locations will have access to a competitive high-speed fiber connection, which is 10 times the size of AT&T’s current fiber-to-the-premise deployment and increases the United States’ residential fiber build by over 40 percent, according to a statement by FCC Chairman Tom Wheeler. The deal will also more than triple the number of metropolitan areas that AT&T has announced plans to serve.

“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,” Assistant Attorney General Bill Baer stated. “Our investigation benefitted from the Division’s close and constructive working relationship with the FCC. The commitments that the proposed FCC order includes, if adopted, will provide significant benefits to millions of subscribers.”

The FCC outlined two conditions that are contained in the proposed order: (1) AT&T will not be allowed to exclude affiliated video services and content from data caps on its fixed broadband connections, in order to prevent discrimination against online video competition; and (2) AT&T must submit all completed interconnection agreements to the FCC, along with regular reports on network performance, in order to bring greater transparency to interconnection practices.

“Importantly, we will require an independent officer to help ensure compliance with these and other proposed conditions,” FCC Chairman Tom Wheeler said. “These strong measures will protect consumers, expand high-speed broadband availability, and increase competition.”

“We are pleased that an order to approve our DIRECTV transaction with certain conditions is circulating at the FCC,” AT&T commented in response to the FCC’s announcement. “We hope the order will be approved by the Commission quickly and we expect to close shortly thereafter.”

Companies: AT&T Inc.; DirecTV, LLC

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