Net Neutrality Deal Pushes DirecTV, AT&T Deal to Closure

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Net Neutrality Deal Pushes DirecTV, AT&T Deal to Closure
DirecTV Satellite Dish

After offering up concessions to the Federal Communications Commission, AT&T has closed the gap on its acquisition of El Segundo’s DirecTV.

In order to push through its $49 billion buyout of DirecTV, AT&T is prepared to adopt a number of net neutrality provisions proposed by the FCC last December, according to a report in the Washington Post. That means possibly agreeing to not slow or block certain websites that don’t pay for more bandwidth.

Adopting net neutrality to get a buyout deal through is not without precedent. Comcast’s acquisition of NBCUniversal was approved by federal regulators in 2011 after it agreed to adhere to an older set of net neutrality rules.

In light of the recent report, analysts believe an AT&T and DirecTV deal may be imminent.

“It appears pretty likely that it will happen soon,” said Dave Hager, senior equity analyst at Edward Jones in St. Louis. “Obviously it’s not a certainty, but it appears they want to close the deal. They’ve been targeting the end of June, so it sounds like they want to stay on that time frame.”

Adding DirecTV’s cash-generating satellite television business could be a boon to AT&T, whose investors are hungry to see returns.

“DirecTV is a very strong free cash flow business, and AT&T sees that it can benefit their free cash flow,” said Hager. “The DirecTV acquisition can help boost AT&T’s dividend.”

Technology reporter Garrett Reim can be reached at [email protected]. Follow him on Twitter @garrettreim for the latest in L.A. tech news.

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