This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Congress Readies Hearings on AT&T, DirecTV Tie-up

Stocks in this article: T DTV CMCSA TWC TMUS

WASHINGTON (The Deal) -- House and Senate hearings will be held Tuesday to examine AT&T's (T) $67 billion plan to acquire DirectTV Group (DTV).

The House Judiciary Committee will go first with a 10:30 a.m. hearing to discuss AT&T's plan to combine the second-largest U.S. cellular operator with the largest U.S. satellite TV provider to form an integrated telecom company that can compete with Comcast (CMCSA) to deliver bundled TV, Internet and voice services.

The deal comes as Washington is also grappling with Comcast's $45 billion bid for Time Warner Cable (TWC) and Sprint (S) potential bid for T-Mobile USA (TMUS). AT&T chief executive Randall Stephenson and DirecTV CEO Michael White are expected to testify at both hearings.

The committees' announcements follow the companies' submission of their public interest statement to regulators Tuesday describing the purported benefits the merger would bring to consumers. Topping their list is the ability to bundle broadband, video and wireless services, particularly in areas where cable monopolies are the only providers of bundled services.

Also the companies said the savings and synergies created by combining their operations would allow them to expand their broadband footprint to at least 15 million new customer locations within four years of closing the transaction. The majority of those locations would be in rural areas currently with no or limited broadband service.

They also said the added competition for bundled services will drive down overall prices for bundled services.

Despite the companies' touted benefits, Guggenheim Securities LLC analyst Paul Gallant said the Federal Communications Commission and the Department of Justice will continue to be concerned about potential upward pressure on stand-alone pay-TV prices.

"We suspect the DOJ and FCC will have concerns with the increased concentration in the pay TV market that would result from this merger," he wrote in a note to clients Friday.

Gallant said that in markets where AT&T already offers its bundled U-Verse product, the merger would exacerbate concentration in a pay TV market that is already considered highly concentrated by antitrust standards. "Pay TV prices are a politically sensitive issue," he said. "Reduced pay TV competition and potential upward pressure on prices represent the biggest risk to this merger."

He acknowledged, however, that the extension of bundled services probably reduces the extent of harm caused by the deal. In the end, he predicted that the FCC and the DOJ will approve the deal because of the purported benefits and AT&T's pledge to offer DirecTV video service available as a standalone service at nationwide prices that do not differ between customers in AT&T's wireline footprint and customers outside the footprint.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs