This Day On The Street
Continue to site
ADVERTISEMENT
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

AT&T, DirecTV Aggressively Defend Merger

WASHINGTON (The Deal) -- The heads of AT&T (T - Get Report) and DirecTV Group (DTV - Get Report) on Tuesday twice defended their planned $67 billion merger from critics who said that service enhancements the companies vow will accompany the deal offer little benefit to consumers.

Those critical of the deal contend that the companies are promising little more than upgrades to expansion plans they already had in the works before the deal was announced.

The scrutiny of the companies' plans to form an integrated entity better able to offer bundled telecom and satellite TV services happened during two separate hearings on Capitol Hill -- the first in the morning by the House Judiciary's antitrust subcommittee and then in the afternoon by the House panel's Senate counterpart.

John Bergmayer, senior staff attorney for Public Knowledge, a public interest group focused on telecom and digital information issues, said the merger could only contribute to the continuing consolidation of the telecom industry with very little payoff for consumers. Bergmayer said the public interest benefits the companies have offered to secure approval from the Department of Justice and the Federal Communications Commission are mostly system improvements the companies would undertake anyway.

"AT&T has history of using its existing plans as a merger promise," Bergmayer told the committee. He noted that in 2011 when AT&T was attempting to buy T-Mobile USA it committed to cover 250 million Americans with long term evolution technology (LTE), also known as 4G networks, by the end of 2013. By the end of 2013, however, AT&T covered 270 million Americans with LTE even though a DOJ lawsuit resulted in AT&T terminating the merger. That AT&T not only met, but exceeded, its promise shows that its claims that a merger was necessary to improve service must be viewed with skepticism, he said.

"When you strip away previously-announced plans, even AT&T's best case for this merger is less than it appears," Bergmayer said. "For the most part, AT&T is simply stating that it will upgrade portions of its network. That is not much. For instance, adding a new kind of home wireless service to an existing wireless coverage area is not as significant an investment as an initial wireless build-out."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DTV $94.30 0.00%
T $35.73 0.00%
AAPL $126.44 0.00%
FB $87.28 0.00%
GOOG $523.40 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs