AT&T-DirecTV deal set to close after approval from FCC

NEW YORK (AP) — AT&T’s $48.5 billion purchase of DirecTV is set to close after winning approval Friday from the Federal Communications Commission.

The Justice Department had already cleared the deal, which will create the largest provider of cable or satellite TV in the U.S., with 26.4 million cable and satellite TV subscribers.

That’s more than Comcast as well as a bigger Charter, which is seeking government approval to buy Time Warner Cable.

Suppliers of TV are buying one another as video from Internet competitors like Netflix gets more popular and costs rise for channels.

Adding TV customers gives AT&T more power to negotiate with big media companies over prices for those channels.

The deal also combines a nationwide satellite TV service, the country’s largest, with the No. 2 nationwide wireless network as time spent on mobile devices increases. DirecTV also has 19.5 million customers in Latin America, where AT&T wants to grow.

AT&T’s purchase of DirecTV was approved even as Comcast’s bid for Time Warner Cable, which would have made the country’s biggest cable company even more massive, was blocked. The AT&T deal did not trigger the same fears from consumer advocates because the company wouldn’t contain an entertainment division like Comcast’s NBCUniversal and wouldn’t gain Internet customers, considered the future of the industry, by buying DirecTV.

The FCC repeated Friday that it had set certain requirements for the merger, which it had disclosed on Tuesday when the head of the agency announced his support for the deal.

Among these are that AT&T has to expand a fiber network that can handle fast Internet speeds to 12.5 million possible customers, which it says compensates for the loss of a video option in markets where AT&T’s U-verse cable service had competed with DirecTV’s satellite TV service. The agency said the fiber network requirement will help Internet video competitors reach customers.

Another way the agency wants to try to promote video competition is by forbidding AT&T to make a potential online video service of its own not eat up data under the cap imposed by the company on its home Internet customers. If AT&T did that, it could make its own service more appealing compared with Netflix, for example, because streaming Netflix would count toward the data cap and potentially could trigger additional fees if a customer went over the cap.

AT&T also has to offer “low-price” home Internet to low-income customers without making them buy phone or TV service too.

The FCC said there will be an independent compliance officer to monitor how AT&T abides by these conditions.

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