The proposed AT&T-DirecTV merger would bring broadband to millions of homes in rural areas, lower costs for consumers, and promote competition with cable giants. CEOs for the two companies argued this case at a recent House Judiciary Committee hearing. As usual, our own Berin Szoka live-tweeted the event, and one of his tweets even got picked up by the Washington Post:
If ATT can’t lower its programming costs, it can’t compete well against cable, let alone force cable costs lower. Duh. #ATTDirecTV— Berin Szoka (@BerinSzoka)
Television and Internet customers across the nation are often stuck with synthetic bundles: broadband and cable from two separate companies that are combined and sold as a package. This raises costs for customers because each company has to visit a home to make installations and, of course, both companies have to make a profit. AT&T and DirecTV are looking to solve this problem through a merger.
DirecTV offers high-quality satellite television, but no broadband. AT&T offers broadband, but their IPTV (Internet Protocol television) product U-verse is unprofitable because they don’t have anywhere near the scale DirecTV does, so their programming costs are much higher. Also, AT&T’s video product isn’t widely available. A merger between the two companies would allow for a more efficient bundle of services, which would lower costs for consumers. The merged company would compete with Comcast, which saves money by offering bundled services over a single connection.