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State attorneys general look into AT&T, DirecTV merger

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The investigation being conducted by the state attorneys general on the AT&T-DirecTV deal coincides with the ongoing reviews by the Justice Department and the Federal Communications Commission. State attorneys general, who have confirmed participation in the review, would include New York Attorney General Eric Schneiderman and Florida Attorney General Pam Bondi.

Prior to the expanded investigation on the AT&T-DirecTV merger, the state attorneys general from around two dozen states were already working with the U.S. Justice Department on the Comcast-Time Warner merger. Lawmakers and public interest groups are concerned that the merger will bring higher costs to consumers and create less competition.

Part of the multi-state review would include California, New York and Florida. Indiana admitted that it was looking into the deal but would not confirm if they are coordinating with the group of state attorneys general.

Michael Balmoris, a spokesman from AT&T, commented on the expanded investigation and said that the company is looking forward to meet the state attorneys general and discuss with them the consumer benefits that are brought by the merger.  

Antitrust experts feel positive over the AT&T-DirecTV deal and expect that the investigation would result in the approval of the merger. The ongoing probe negates the earlier report in August that the DOJ gave the merger a green light. Still, it's worth noting why several issues have been raised on the proposed transaction.

One of them is the issue on lost competition. AT&T, which is the nation's second biggest wireless carrier, offers the fiber optic delivery of television programming, U-Verse, home phone service and high-speed Internet. DirecTV, a satellite-television provider, has presence in these markets.

Another issue deals with programming. Smaller cable operators and content producers are worried that the merging of the companies would result in gaining a stronger control on programming creation, distribution and costs.

People behind the probe are also looking into the merger's effects on high-speed broadband advancement. According to the deal, AT&T shall expand its broadband service in order to reach the locations of 70 million consumers.

State attorneys general would usually coordinate with the U.S. Department of Justice when a merger involves major corporate entities. The investigation typically revolves around the probable effects of the merger on the consumers. Both critics and proponents of the deal are interviewed as part of the probe.

John Bergmayer, a senior staff attorney with Public Knowledge, which is an organization that is dedicated to preserve the Internet's transparency, said that states and the federal government are given the authority to file cases based on antitrust issues.

"In general, depending on state laws and the nature of the companies, they might be able to block license transfers or use other regulatory tools," said Bergmayer. "State AGs looking at a big deal like this is not unusual. Often their work complements what the DoJ/FCC are doing."

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