AT&T Inc. (T)’s DIRECTV (DTV) Acquisition Drawing the Government’s Attention


AT&T Inc. (NYSE:T)’s planned $48.5 billion proposal to acquire DIRECTV (NASDAQ:DTV) is now on the radar of the attorneys general of several states, including New York, Florida, and California. Fox Business News’ Liz MacDonald reported on the government’s involvement today on Fox Business.


“What’s happening here is that the AG’s (attorney generals) and the Department of Justice are scrutinizing whether prices will go up for customers. AT&T’s TV streaming services are in about a quarter of U.S homes . They’re also worried of course about content delivery and whether broadband speeds would slow down because of the merger. These are the same issues the AG’s are also looking into with the Comcast-Time Warner deal,” MacDonald said.

Like Comcast’s proposed $45 billion purchase of Time Warner, which has broad antitrust issues related to pricing and competition (and has received 75,000 complaints as a result), an AT&T Inc. (NYSE:T) purchase of DIRECTV (NASDAQ:DTV) is eliciting some of the same fears.

AT&T Inc. (NYSE:T) currently serves about 25% of the U.S population, the majority of which also have access to DIRECTV (NASDAQ:DTV) . That raises concerns that a merged company would have too much influence in those markets and be able to dictate pricing and other aspects of their service with greater authority, which could extend all the way to content and advertiser pricing.

Analysts do expect the proposed merger to be approved however, and DIRECTV (NASDAQ:DTV)’s CEO Mike White was also reported by Reuters today as saying that he expects a merger to be completed by April of next year.

Jim Simons’ Renaissance Technologies hedge fund is one of the largest fund shareholders in AT&T Inc. (NYSE:T) as of the second quarter of this year, with over 3.4 million shares in the company. That was a more than 600% raise in their position in AT&T Inc. (NYSE:T) from the previous quarter.

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