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.