The second largest wireless carrier in the United States is now the country's largest provider of pay TV, now that the Federal Communications Commission (FCC) has blessed the union between AT&T and DirectTV.
In a deal that took a year in the making, AT&T acquired DirecTV for $48.5 billion shortly after the FCC signed the agreement on Friday. While the FCC has thrown water on high-profile mergers recently, Commissioner Mike O'Rielly indicated there were no other issues holding up the approval of the deal.
"To be clear, this process shouldn't have taken this long, and we shouldn't have been so cavalier with the Commission's merger review 'shot clock,' but at least we have arrived at this final stage," said O'Rielly. "I will release a substantive statement at the conclusion of my colleagues' review and final consideration of the item."
The FCC scrutinized the deal based on the records of AT&T and DirecTV, which include "extensive economic analysis and documentary data " about both parties. The commission, however, didn't approve the deal without a few conditions.
The new AT&T will have to deliver more fiber to 12.5 million more consumers and will have to offer Gigabit service to any E-Rate eligible library or school it services fiber connections to.
AT&T will also have to get rid of discriminatory data caps and will have to offer economy packages to low-income areas.
The FCC "requires AT&T-DirecTV, as a condition of this merger, to refrain from imposing discriminatory usage-based allowances or other discriminatory retail terms and conditions on its broadband Internet service."
To ensure that the new AT&T continues to play according to the rules, the FCC mandated that the company hire both an internal and external compliance officer to help enforce the commission's terms.
FCC Commissioner Mignon L. Clyburn wanted to make clear that the commission is not opposed to mergers. The commission wants to ensure consumers gain something when markets consolidate.
"For our goal of universal broadband access to be realized, we need both universal deployment of networks and access to affordable services," said Clyburn. "This merger makes strides in achieving both of these goals."