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AT&T talks merger with DirecTV

Discussion in 'TiVo Coffee House - TiVo Discussion' started by Johncv, May 1, 2014.

  1. May 2, 2014 #21 of 214
    Dan203

    Dan203 Super Moderator Staff Member TCF Club

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  2. May 2, 2014 #22 of 214
    JosephB

    JosephB Member

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    AT&T/DirecTV is a completely different animal than Comcast/TWC or anything else. AT&T and DirecTV overlap very little. DirecTV doesn't compete with AT&T in wireless, wireline broadband, or telephone service. They only compete in MVPD service, and the combined AT&T/DirecTV would still have fewer customers under the FCC's previous rules, rules that were ruled unconstitutional. I was a two time Obama voter, but even I can't see the regulatory justification for denying AT&T/DirecTV (but there are a host of reasons not to allow TWC/Comcast, even though I think that one will make it through too)

    AT&T only has around 5 million video subscribers on U-Verse. That's the only number that matters. Internet-only U-Verse subscribers don't count because DirecTV doesn't offer any internet services. AT&T is currently the 7th largest MVPD, not the second or third. A combined AT&T/DirecTV would be the second largest, if Comcast/TWC happens. DirecTV is currently second already.

    And where did you get the number for how much it would cost to build out FTTH? The difference between sinking that $40 billion into capital expenditures and sinking it into DirecTV is that DirecTV is already generating cash flow and profits. Spending the $40 billion on burying fiber means that they have to wait to see any money, if they see any at all (since the max penetration is generally around 30%...a lot of the fiber they put into the ground will never be used).

    I live in an AT&T state, I would LOVE to see fiber to the home, but I am also realistic and understand why AT&T would rather go after DirecTV. I also understand that there's not really much that the government can do to force AT&T to do one thing vs. another. We still live in a free society and private companies are free to spend their capital how they wish.
     
  3. May 2, 2014 #23 of 214
    atmuscarella

    atmuscarella Active Member

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    My basic view is we are heading to few (3 or 4) large companies that deliver all these services (Pay TV, Wired & Wireless Internet access, and telephone via wired & wireless services). I hope we end up with 4 but we could only have 3 depends on what happens in the wireless arena.
     
  4. May 2, 2014 #24 of 214
    tarheelblue32

    tarheelblue32 Active Member

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  5. May 2, 2014 #25 of 214
    tarheelblue32

    tarheelblue32 Active Member

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    http://fastnetnews.com/fiber-news/175-d/4835-fiber-economics-quick-and-dirty


    Yeah there is very little the government can do to enroucage AT&T to do the right thing. Except killing any mergers/acquisitions they want to do, classify them as common carriers, put them under government regulated pricing, taking away their tax deductions/credits, revoke their wireless spectrum licenses, forcefully break up the company under antitrust laws. Yeah the government is simply powerless to influence their behavior.
     
  6. May 2, 2014 #26 of 214
    JosephB

    JosephB Member

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    The government has to have a compelling reason to kill a given merger. To force AT&T to expand FTTH is not a valid reason they shouldn't be able to buy DirecTV.
     
  7. May 2, 2014 #27 of 214
    tarheelblue32

    tarheelblue32 Active Member

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    Sure it is.
     
  8. May 2, 2014 #28 of 214
    JosephB

    JosephB Member

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    In your mind it might be, but under the laws of the United States it is not.
     
  9. May 2, 2014 #29 of 214
    tarheelblue32

    tarheelblue32 Active Member

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    Laws can (and should) be changed.

    But even under current law, I think the standard is whether or not the merger will reduce competition and hurt consumers. There is no doubt that this merger would indeed reduce competition. Right now I can get TV from either Time Warner Cable, Dish Network, DirecTV, or AT&T U-verse. A merger between DirecTV and AT&T would reduce my choices from 4 to 3. Coincidentally, that is the same amount that competition would have been reduced for me in wireless if AT&T had been allowed to merge with T-Mobile. That merger, thankfully, was stopped by regulators. If going from 4 to 3 competitors in the wireless market was seen as an unacceptable reduction in competition, then I certainly think going from 4 to 3 paid TV competitors should be also.
     
  10. May 2, 2014 #30 of 214
    Diana Collins

    Diana Collins Well-Known Member TCF Club

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    AT&T buying DirecTV!! Human sacrifice!!! Dogs and cats living together!!! Mass hysteria!!! :)

    Well, if it happens, it will just confirm my switch to FiOS and Roamios.
     
  11. May 2, 2014 #31 of 214
    atmuscarella

    atmuscarella Active Member

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    Must be nice to live where you do. I have the choice of 2 pay TV operators (Dish or Direct) and 1 wired Internet provider (Frontier DSL).

    But honestly I think most people have 3 pay TV choices and 2 wired Internet choices so you and I are exception on opposite ends.
     
  12. May 2, 2014 #32 of 214
    tarheelblue32

    tarheelblue32 Active Member

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    Even though not everybody has access to all of the providers, the fact that providers set their prices nationally (or across all markets they serve) means that competition on markets other than your own can still have a beneficial effect to you. The more consolidation that takes place in the telecommunications industry, even if your markets aren't directly impacted, the worse the overall competition picture will become resulting in increased prices for consumers.
     
  13. May 2, 2014 #33 of 214
    JosephB

    JosephB Member

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    Just because a transaction reduces the number of competitors doesn't mean it will automatically be blocked. In *most* areas the number of competitors in the MVPD market won't change at all. In the areas where AT&T actually does have U-Verse TV, the market will go from at least 4 to at least 3, which is the number of competitors there were before AT&T got into the market.
     
  14. May 2, 2014 #34 of 214
    mattack

    mattack Active Member

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    Except for in price.. I have no idea how much speed one needs for e.g. Netflix (esp multiple streams), but if DSL is fast enough for that, I think for most people it would be "enough".

    At least from the ads I've seen, U-verse seems to *sometimes* be allowing naked DSL for the advertised $19.99 or whatever. (For a long time, in the fine print, they'd say they require a home phone line for that price.) I realize this is only a halfhearted endorsement, but I'm all for cheaper/slower combinations, for those it would be good enough.

    (I have cable internet + TV, but if DSL was enough for me and DSL + cable TV was cheaper, I'd do it.. currently I'm on a bundle that's I think cheaper than that though.)
     
  15. May 2, 2014 #35 of 214
    True Colors

    True Colors Member

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    AT&T is not going to pay to extend fiber into homes JUST because it would be nice to have. Profit based businesses do not operate that way.

    Businesses need to be able to justify spending extra money by showing an expected return on investment. For fiber to the home, I just don't see it. Tons of extra money going out, very little extra coming back in.

    DirecTV and AT&T already operate much more like business partners than competitors. Did you know that AT&T has been an authorized dealer of DirecTV services for years? In fact, a good chunk of customers already have DirecTV services and ATT internet service combined into a single bill.

    Lots of differences....

    Wireline vs wireless

    AT&T Uverse is available almost nowhere. DirecTV is available almost everywhere.

    Uverse is concentrated in urban areas in a limited number of states. DirecTV does well in rural areas outside the reach of wireline providers.

    Uverse is limited to a relatively low number of TV sets within a household. DirecTV has no maximum limit(great for hotels, etc.)

    You could keep going on with that, but the point is easy to see. AT&T buying DirecTV would not be eliminating a competitor from the marketplace, because the two companies barely compete against each other as it is.

    TC
     
  16. May 2, 2014 #36 of 214
    tarheelblue32

    tarheelblue32 Active Member

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    This is describing perfectly a failure of free-market capitalism. And whenever a market failure such as this occurs, the proper response is to have the government step in and make the needed corrections to the system. FTTH has enormous, long-term benefits and economic returns for consumers, internet-related businesses, and society as a whole. The fact that a for-profit business deploying the fiber is unable to capture as much of those societal returns in the form of their own profits does not mean it should not be built. The government needs to step in and build it.
     
  17. May 2, 2014 #37 of 214
    True Colors

    True Colors Member

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    Okay, well let's look at some of the other countries that do not have free market capitalism. How are they doing with their fiber to the home deployment.

    In other words, your political views are clouding your basic common sense here.

    And I disagree that the benefits would be "enormous." For the overwhelming majority of people it would not make the slightest difference.

    TC
     
  18. May 2, 2014 #38 of 214
    tarheelblue32

    tarheelblue32 Active Member

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    I was thinking the exact same thing about you.
     
  19. May 8, 2014 #39 of 214
    Bigg

    Bigg Active Member

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    AT&T should do FTTH for 100% of their customers, and Verizon should finish their build-out. Unfortunately, the AT&T executives, and the new executives at Verizon have the attention span of a gnat, and act like 2-year-olds saying "I WANT IT NOW", having a total inability to think about the long term ROI. If they had brains and competence, they would be moving to FTTH over their entire territory.

    This merger sort of makes sense, in the sense that D* is in an awkward position not being able to offer internet, versus Comcast and other cable companies that can, but at the same time, it would create a weird mismatch between D* and AT&T in some areas, and D* and another phone company in others.

    U-Verse is a wretched POS, but the answer to that is FTTH, not buying a satellite company. AT&T is in a good position in that they can build FTTH and be competitive, whereas D* has nothing on the internet side unless they partner, and anything that's really fast enough to compete is also fast enough to have it's own TV service.
     
  20. May 8, 2014 #40 of 214
    tarheelblue32

    tarheelblue32 Active Member

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    Is there any particular technical reason why DirecTV doesn't do satellite internet? Dish Network does it right? I mean, I know it probably sucks ass in speed and latency and probably has a low data cap, but for people in rural areas with no other means of broadband internet service it would be better than nothing (or dial-up) right?
     

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