• AT&T's Filing and Claims: This week, AT&T filed a "public interest" statement with US regulators regarding its $48.5 billion acquisition of DirecTV. It claims better prices will result, with significant downward pressure on the prices of integrated broadband and video bundles. AT&T argues that its ability to offer cheap bundles will force cable companies to lower prices. There could be upward pressure on standalone services but it will be outweighed by the downward pressure on bundles. AT&T also promises a $34.95/month standalone 6Mbps broadband offering in its wireline territory for 3 years with limited price increases based on CPI.
• Comparison with Comcast: Comcast said prices wouldn't go down after its deal to purchase Time Warner Cable. AT&T's new SEC filings show U-verse video has been a failure and can't compete against Comcast and Time Warner Cable. AT&T provides U-verse video only where it has fiber-to-the-node or fiber-to-the-premises and is smaller than its competitors due to lack of scale, especially in content acquisition.
• Benefits of the Merger: The merger will give AT&T improved negotiating power, lowering per-subscriber programming costs by at least 20%. DirecTV has 20.3 million video subscribers and no broadband capabilities. The combined company will sell an integrated bundle of high-speed broadband and video. AT&T offers LTE-based home broadband and plans to bring fiber-to-the-home to an additional 2 million customers. It also claims the merger will result in fixed wireless broadband for 13 million rural customer locations and eventually cover 70 million customer locations. AT&T pointed to a statement by Netflix CFO suggesting it would be beneficial for Netflix. Additionally, AT&T promised to adhere to FCC's 2010 network neutrality rules for 3 years. The merger will face review by the FCC and DOJ and AT&T expects to complete it by May 2015.