AT&T and DirecTV have moved a step closer to becoming the largest cable provider in the country.
Bloomberg News reported that the Department of Justice had concluded its antitrust probes of AT&T Inc.’s proposed $48.5 billion acquisition of DirecTV without setting any limits on free Internet use or sale of business units.
Through the partnership, El Segundo’s DirecTV, which currently does not offer Internet service, would be able to tap into growing online video audience and shed its reliance on the waning number of satellite users. Dallas’ AT&T would get about 34 million TV subscribers, 13 million of which are in the growing Latin American market.
David Heger, an analyst who follows AT&T and DirecTV for Edward Jones in St. Louis, said with this deal DirecTV is primed to better retain customers switching from traditional TV boxes to watch programming on online video services like Netflix and Hulu.
“It’s kind of a one-trick pony,” he said of DirecTV. “But with AT&T, they can offer services other than just cable and satellite TV and maybe even bundle products with high-speed wireless and phone services."
Heger said approval of antitrust regulators was no surprise given that the combined operations would not give the companies as much control of the broadband market as much as the ill-fated Comcast-Time Warner pairing would have.
Proposed in May last year, the deal is still awaiting approval from the Federal Communications Commission. The regulator is expected to give the companies a green light, but might impose limits on the company to follow its open Internet rules.
Representatives for AT&T and DirecTV declined to comment.
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