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AT&T/DirecTV Merger Approved By FCC, Agency Forces Fiber Expansion And More

AT&T has been in talks with DirecTV to purchase the competing telecommunications service provider for some time now. Today, the FCC approved the acquisition on the condition that the new company expand its fiber optic broadband Internet access service to 12.5 million new locations and agree to a few other items.

The most important of these obligations is that the resulting company must expand its fiber optic broadband Internet service to 12.5 million locations. This is one of the largest expansions of fiber optic Internet since fiber optic began to be used for individual end users. However, the announcement from the FCC is ambiguous as to what exactly is defined as a "location." It could refer to individual users, entire towns, or anything in between; but even 12.5 million individual users will still represent a strong growth of fiber optic networks in the U.S. Any eligible schools or libraries in these areas must also be E-rated gigabit broadband service.

The new conglomerate company is also prohibited from ostracizing video services such as Netflix from the same service everyone else receives. The FCC is heading off fast-lanes at the pass, so to speak, and is not giving the new company any chance to develop them as their corporate assets and networks are consolidated. To ensure that the new company upholds this obligation, it has agreed to full disclosure of its Internet interconnection agreements.

Finally, following the merger, AT&T-DirecTV will be required to provide affordable standalone broadband service to low-income consumers. Given that the new definition of broadband is 25 Mbps down and 3 Mbps up, which is faster than many users currently have, offering an affordable broadband Internet service should help increase competition.

The company must disclose all information and comply with independent and external compliance officers who will report and monitor the company's activities to ensure these conditions are followed.

Although the FCC might go easy on companies when it is time to fine them, like the GPSPS fines announced yesterday, they really don't mess around when it comes to negotiating major legal contracts and regulations. Honestly, it is rather amazing that the two companies conceded to the FCC on these points; the FCC deserves accolades for what they have accomplished with this agreement.

Although it only affects one company, the FCC has succeeded in substantially expanding fiber optic infrastructure, increased broadband coverage, prevented the development of fast-lanes, negotiated affordable gigabit broadband service for libraries and schools, and negotiated a low cost broadband service for low-income families, all in a single move. That is simply extraordinary, and it falls in line with many of the goals FCC Chairman Tom Wheeler and the rest of the FCC have been working on this year.

To be fair, some of these agreements, such as the section against fast-lanes, should already be in effect from the Open Internet legislation. However, many companies have been slow to put the Open Internet legislation into effect, because it is still being opposed in the legislature. This agreement for the merger of AT&T and DirecTV actually only lasts for four years, but likely the FCC is just using it to help push widespread adoption of the Open Internet, fiber optic networks and affordable broadband service.

For now, we should just sit back and enjoy the benefits of this agreement. If the Time Warner, Charter and Bright House merger is approved, the FCC will be able to place equally stringent measures on that new company, as well.

Follow Michael Justin Allen Sexton @LordLao74. Follow us @tomshardware, on Facebook and on Google+.

  • SaintAsuraka
    The author of this article seems to be this sites go to guy on all things FCC. His articles read like love notes to the wonders of the regulatory state. This article is embarrassing in its gushing nature. I have read several articles like this now and just couldn't stand it anymore.
    Reply
  • IInuyasha74
    16319679 said:
    The author of this article seems to be this sites go to guy on all things FCC. His articles read like love notes to the wonders of the regulatory state. This article is embarrassing in its gushing nature. I have read several articles like this now and just couldn't stand it anymore.

    I enjoy seeing companies actually improving the Internet inside of the United States, upgrading their networks, and offering fair rates to customers. For over a decade now telecommunication service providers haven't opted to take advantage of their customers with secret unauthorized charges, service that is slower than advertised, and have done relatively little to improve service inside of the U.S. As a result, we not only pay a gratuitous amount of money for the service we receive relative to most other modern nations, but we also have significantly slower Internet than many of them too.

    I write the way I do on these articles not because I want to glorify the FCC, but because after being limited to a claimed 15 Mbps of Internet service for the last ten years (which actually tops out at 2 Mbps), I'm glad to see that our government is actually doing something to try and improve the situation.
    Reply
  • junkeymonkey
    not at&t to this day all they cam offer me is 56k dial up I mean 2015 and that's the bset they can do ?? but my phone bill is the same rates as the guys who get there best service .. matter of fact they cant offer call waiting of caller id here in the us of a .. said the phone lines in my area were too old ???

    well put in some new lines cheap ass better yet i'll drop your service and just go all wireless - hows that for you now at&t ?? now they come out here and cry for my business back and wonder why I dropped them .. they just cant understand it ??

    what a joke
    Reply
  • Gurg
    Terrible agreement for consumers. Phone/DSL, internet/cable and satellite carriers should be prohibited from merging as it eliminates competition and consumer choices.
    Reply
  • junkeymonkey
    and funny how none of it is ever available to me where I live ? in like 2 miles is the sprint service area there customers get good service like high speed dsl and all -- I don't recall then taking that over and digging ''new lines '' att is just greedy/evil. all I see from then is they send you a bill that's about it ...

    ''Terrible agreement for consumers. Phone/DSL, internet/cable and satellite carriers should be prohibited from merging as it eliminates competition and consumer choices. ''

    you do got a choice - take what they offer or do with out .... heres your bill , thank you

    Reply
  • synphul
    I have to agree, internet service and availability in this country has been sad for a long time now. Aging phone lines and the way they set up extensions to the existing wire makes dsl impossible. Wireless coverage in my area is extremely poor. Cable doesn't exist here. Aside from dialup, the only other alternative to 3g is limited laggy satellite connections that cost a small fortune (over $100/mo). You'd think I was located on a remote desert island or out in the middle of the mountains somewhere far removed from civilization when in reality I live less than 2mi from a major highway and 50mi from one of the bigger metro areas in the u.s.

    Other nations have far surpassed us in education, now internet connectivity. The wireless here is so slow it may as well be dialup. Trying to watch a simple 4-5min youtube vid at 144p (aka blurry) can take 8-12min or longer to load.

    If I were 200mi from civilization in a small village I could understand it but this is ridiculous. Being a directv customer already I can only hope but doubtful I'll see fiber any time soon.
    Reply
  • Alec Mowat
    The author of this article seems to be this sites go to guy on all things FCC. His articles read like love notes to the wonders of the regulatory state. This article is embarrassing in its gushing nature. I have read several articles like this now and just couldn't stand it anymore.

    The fear of Government and Regulation is driving people mad and creating an inefficient service for the people. The Government has a function, a role and a million employees. Regulation is not bad at all. That's how poor families in poor neighborhoods get access to utilities that Corporations wouldn't bother expanding too.
    Like water and electricity.

    It's almost been 8 years, and no one is in FEMA camps, Ebola didn't kill everyone and the economy isn't collapsing. You can take off your tinfoil and join the real world any time now.
    Reply
  • falchard
    Uhh, isn't DirectTV a satellite provider? How will they provide 12.5 million homes with a fiber connection. Also most of ATTs network is fiber to a node, and 50 year old twisted pair to the house. At the house it is then hooked into the CATV lines.
    lol j/k. This would be even more successful if the only homes that counted were in rural areas.
    Still I don't trust the FCC ever. Allow me to explain why. The FCC had a very important task. To oversee the distribution of the RF spectrum so their is not overlap or interference. Then... they censored radios and broadcast television. They are not known for staying within the limits of their duty. Sure right now they have a hands off approach on the Internet, but that was mainly because of the government we had in the '90s who were heavily influenced by people like Milton Friedman.
    Reply
  • SaintAsuraka
    "Ebola didn't kill everyone and the economy isn't collapsing. You can take off your tinfoil and join the real world any time now."

    Sir I do not doubt the role of government I doubt the competence of it. No one cites the government as a role model for efficiency and up to date standards. I question the competence of a large percentage of those millions of government employees, especially at the top where the corporate board room and the regulatory chairs seem to have highly incestuous relationships. You invite me to join the real world where the high bar for government success seems to be, everyone not dying and the economy not collapsing.
    Reply
  • Solandri
    16320027 said:
    I enjoy seeing companies actually improving the Internet inside of the United States, upgrading their networks, and offering fair rates to customers. For over a decade now telecommunication service providers haven't opted to take advantage of their customers with secret unauthorized charges, service that is slower than advertised, and have done relatively little to improve service inside of the U.S. As a result, we not only pay a gratuitous amount of money for the service we receive relative to most other modern nations, but we also have significantly slower Internet than many of them too.

    I write the way I do on these articles not because I want to glorify the FCC, but because after being limited to a claimed 15 Mbps of Internet service for the last ten years (which actually tops out at 2 Mbps), I'm glad to see that our government is actually doing something to try and improve the situation.
    The thing is, the problems you experienced with Internet service in the U.S. were caused by government regulation in the first place. So it's not that the FCC is actually fixing anything, it's just fixing what the local governments broke in the first place when they granted local cable and phone monopolies.

    If we had actual competition in these markets like in (ironically) Europe, we wouldn't need the government stepping in to enforce things like net neutrality. Any ISP which deliberately slowed down Netflix would've put themselves out of business as their customers fled to ISPs where Netflix streamed just fine. Comcast, Verizon, etc. were only able to blackmaiil Netflix because their customers had no other viable ISP to switch to. No neighbors telling them that their problem must be their ISP because Netflix streamed just fine for them.

    Same for the AT&T and DirecTV merger. Most of you are too young, but way back when satellite TV first began, there was a lawsuit to prohibit cable monopolies - i.e. to force local governments to allow at least two cable companies per area. The lawsuit lost because the FCC determined that satellite TV companies provided adequate competition to cable TV. In other words, it was OK to have a cable monopoly because the customer could always opt for satellite TV service instead. Well, now that reasoning has been long forgotten, we have a cable/phone company snapping up a satellite TV company. Exactly what are your choices now if you're in an AT&T monopoly area? Dish? What's to stop AT&T from subsidizing their DirecTV prices with cable revenue to run Dish out of business?

    As well-intentioned as regulation may be, you have to always bear in mind that politics, corruption, and nepotism will always creep into the regulatory process. Regulation should be limited to ensuring there's a fair and level playing field for widespread competition, not for approving monopolies.
    Reply