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Approved: AT&T’s $49 Billion Purchase of DirecTV

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The Federal Communications Commission said Friday it has approved AT&T’s (T) $49 billion acquisition of DirecTV (DTV), removing the companies’ biggest hurdle in their desire to create the largest U.S. pay-TV provider.

The FCC’s approval was expected. On Tuesday, FCC Chairman Tom Wheeler confirmed he circulated to his fellow FCC commissioners the agency’s proposed order approving the acquisition, with AT&T and DirecTV agreeing to some conditions.

In completing its acquisition of DirecTV, AT&T is “now a fundamentally different company with a diversified set of capabilities and businesses,” said AT&T CEO Randall Stephenson in a statement.

Even before Wheeler’s recommendation, analysts had bet on the merger being approved as AT&T U-Verse’s TV service — with about 6 million customers — is a relatively small player in the TV market. The relatively smooth approval process is in direct contrast with Comcast, whose bid to buy Time Warner Cable for $45 billion was quashed by regulators earlier this year.

While the two transactions were often compared, AT&T’s deal for DirecTV was different. Had Comcast bought TWC, the merged entity would have controlled more than half of the Internet broadband market. AT&T,the nation’s second largest wireless carrier that also provides pay-TV, broadband Internet and phone services, sought to mark the distinction, noting that DirecTV doesn’t directly offer Internet.

AT&T pursued DirecTV to expand its TV business nationally and to enhance its negotiating power versus TV networks that are demanding higher fees for their programs. DirecTV, whose satellite-based TV service is available nationally and has about 20 million customers, also enables AT&T to offer more bundled packages for all of their product options. For example, AT&T could offer rural market customers a package of wireless smartphone subscription, satellite TV, and Internet access delivered via its wireless network. Once the merger is complete, AT&T would serve about 26 million TV customers.

The Department of Justice’s antitrust division, which must also approve the merger, also said Tuesday it will not block the deal and closed its investigation.

READ MORE  HERE AT THE USA TODAY WEBSITE

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