States Authorized to Investigate the AT&T Inc (NYSE:T) and DirecTV (NASDAQ:DTV) Merger

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By Thomas Copeland on September 13, 2014 Us News

Florida’s Attorney General’s office reported that an investigation is underway by a division of state attorneys general to determine if AT&T Inc’s (NYSE:T) proposal to buyout DirecTV (NASDAQ:DTV), a satellite TV provider, in any way breaches the antitrust laws.

The State attorneys were already in process of determining with the US Justice Dept’s antitrust division of Comcast Corp’s acquisition of Time Warner Cable. The states involved in the investigation were Florida, Connecticut, Maryland as well as Ohio.

The States are inspecting At&T’s (NYSE:T) $48.5 billion contract with DirecTV (NASDAQ:DTV); the settlement which results in a combination of the nation’s largest satellite TV organization and AT&T’s offers of wireless phone and internet services. The Justice Department and Federal Communication Commission have already submitted their reviews in addition to the inspection.

There are several voices making their opinions heard in regard to this merger. Two prominent figures involved in this investigation are General Pam Bondi; Florida Attorney and General Eric Schneiderman of NewYork. This information came from an inside source who is not licensed to speak about the investigation publicly.

Michael Balmoris, a spokesman from Dallas Group of AT&T (NYSE:T) gave a statement. His statement emphasized on the need of having a discussion with the state attorneys to highlight the important benefits of the merger on the consumers.

On the otherhand, Darris Gringeri, spokesman in California based DirecTV (NASDAQ:DTV), simply refused to comment on the ongoing inspection of this deal.

Reuters published the states review earlier, which raised all of the points mentioned above.

Another area of concern that the attorneys general are concerned about, according to Reuters is the programming issue. It is a possible problem foreseen by the Content producers and cable operators. The producers and operators believe that this combination might utilize too much power for distribution and programming costs. Questions are also being raised in connection with the effect on the advancement of high speed broadband to 70 million locations, due to customer demand.

Keeping these points in mind, it seems to be a necessity now for the Justice Department and Federal Commission to terminate this deal before it closes off.

While questions are being raised and discussions being held to point out the cons of this partnering, AT&T (NYSE:T) and DirecTV (NASDAQ:DTV) continue to believe that this merger would bring together Pay TV and the internet facilities for its customers. They also stand firm on their point that this new merger will help them in gaining a significant competitive edge over the fast paced business.

AT&T (NYSE:T) CEO Randell Stephenson argues that the post merger company will result in high speed broadband connectivity which would cater to 15 million more Americans – as compared to the current reach; and eventually at lower prices. He believes this will also create a downward pricing pressure on the competitors present in the market. Competition among the businesses will also be increased as 70 million homes will easily have access to the reasonably priced AT&T (NYSE:T) and DirecTV (NASDAQ:DTV) services for a reduced price compared to cable competitors.