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AT&T is Already Being Misleading to Get DirecTV Deal Approved
by Karl Bode 12:33PM Monday May 19 2014
AT&T didn't waste any time today selling the company's planned acquisition of DirecTV using AT&T's special brand of massaged statistics and misleading claims. Both AT&T and DirecTV CEOs are already promising that eliminating a pay TV competitor will somehow bring consumers more competitive pricing, though most consumer argue the exact opposite is likely to happen. AT&T's already putting forth their own recommended "conditions" for the acquisition -- most of which mean nothing or AT&T already planned on doing.

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Among AT&T's promises is a pledge to adhere to the FCC's dead net neutrality rules for a set number of years (Comcast is doing something similar in the hopes of getting their deal approved).

While that sounds nice and will be played up by the press as something meaningful, I've stated time and time again those original rules didn't do much of anything because they were based on draft language by AT&T, Verizon and Google that contained numerous loopholes, and more importantly didn't cover wireless -- AT&T's primary focus at the moment.

AT&T's also promising regulators an expansion of broadband services if the deal gets approved, though the lion's share of that expansion appears to be fixed LTE services, the core of which are already largely deployed. From AT&T's deal fact sheet:
quote:
15 Million Customer Locations Get More High Speed Broadband Competition. AT&T will use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today, utilizing a combination of technologies including fiber to the premises and fixed wireless local loop capabilities. This new commitment, to be completed within four years after close, is on top of the fiber and Project VIP broadband expansion plans AT&T has already announced.
As we've already noted numerous times, AT&T's "Project VIP" U-Verse spending and deployment projections are already highly inflated and massaged to begin with, largely only benefiting a few key areas like San Francisco, where U-Verse expansion was derailed over community backlash against VRAD cabinets. Similarly, AT&T's recent, much-covered promised expansion of 1 Gbps service is mostly a PR bluff focused on small, high-end developments as AT&T tries to save face before the threat of Google Fiber.

This latest "expansion" is similarly theatrical. AT&T already planned to use fixed and mobile LTE as a "good enough" option for rural markets, and that will be the lion's share of this new 15 million homes estimate. AT&T omits to mention LTE is all that will be left after the company gets donebacking away from tens of millions of DSL users AT&T is unwilling to upgrade. Capped, pricey LTE isn't a substitute for real broadband deployment and competition.

The amount of cash alone AT&T is spending on this deal -- $14.55 billion -- is as much as it cost Verizon for its entire FiOS deployment.
-Free Press
"They could pass that same number of homes with gigabit fiber for far less than just the cash they're spending in this deal, never mind the stock and debt," notes Free Press Research Director Derek Turner, whose group opposes the deal.

Turner's numbers are based on an estimate of $700 per home passed, $800 per home subscribed, and a take-rate of 30% video subs. With those metrics, AT&T could pass 71 million new homes with gigabit fiber, and fully connect 21 million homes for around $67 billion.

While it's true the cost for rural deployment would be considerably higher, keep in mind tens of millions of un-upgraded AT&T customers live in towns and cities where those numbers are accurate. Either way the point remains the same: instead of upgrading their U-Verse network, AT&T is spending money on a no-growth satellite TV provider whose best days are behind it. Why? Simply to grow larger alongside Comcast and eliminate a competitor (DirecTV's consumer-unfriendly NFL exclusive is just a pleasant bonus).

"The amount of cash alone AT&T is spending on this deal -- $14.55 billion -- is as much as it cost Verizon for its entire FiOS deployment, which reaches more than 17 million homes," Turner adds. "Add in the $33 billion in AT&T stock and $18.6 billion in debt, and you can see just how wasteful this merger is."

AT&T also appears to be once again trotting out standalone DSL as a carrot on a stick for regulators, as if we're still living in 2007 (though based on the DSL speeds they're getting, many AT&T customers are). Again, from the fact sheet:
quote:
For customers who only want a broadband service and may choose to consume video through an over-the-top (OTT) service like Netflix or Hulu, the combined company will offer stand-alone wireline broadband service at speeds of at least 6 Mbps (where feasible) in areas where AT&T offers wireline IP broadband service today at guaranteed prices for three years after closing.
A few of you might remember the last time AT&T promised to offer standalone DSL at guaranteed pricing for a fixed period of time. AT&T was allowed to write their own merger conditions (pdf) to get their acquisition of BellSouth approved, though the company then proceeded to hide the offer from consumers in the hopes nobody would notice it existed. The FCC also allowed AT&T to break whatever merger condition they wanted with impunity.

If all of these bunk promises seem pretty familiar (and I'm sure I've missed some), that's because they're not much different from the promises AT&T made when attempting to acquire T-Mobile, or BellSouth, or any of their other deals. T-Mobile was blocked because regulators simply couldn't buy the argument that eliminating a competitor magically creates more competition and jobs. This deal doesn't look much better, and "guarantees" like promising to adhere to meaningless neutrality rules, or broadband "expansions" that aren't expansions don't make the deal (or AT&T) any more attractive.

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coldmoon
Premium
join:2002-02-04
Broadway, NC
Reviews:
·Windstream

This quote tells you all you need to know...

...about the actual agenda the Death Star has in this proposed "deal":

quote:
"They could pass that same number of homes with gigabit fiber for far less than just the cash they're spending in this deal, never mind the stock and debt," notes Free Press Research Director Derek Turner, whose group opposes the deal.

That's an estimate of $700 per home passed, $800 per home subscribed, and a take-rate of 30% video subs. With those metrics, AT&T could pass 71 million new homes with gigabit fiber, and fully connect 21 million for around $67 billion. Even with slightly higher install costs the point remains the same. Instead, AT&T's spending this money on a no-growth satellite TV provider whose best days are behind it -- simply for the sake of growing larger and eliminating a competitor.
--
Quietzone - Protection you can trust!
elefante72

join:2010-12-03
East Amherst, NY

Re: This quote tells you all you need to know...

It's actually a brilliant move. If you think about it AT&T is not in the content business, it's in the delivery business. If they can go after "four mode", this is a big win:

1. Wireline
2. Wireless
3. Fixed Wireless
4. Satellite

If you really think about it, cable WILL be dying, the ruminants left will be real time which is relegated to news, weather, and SPORTS.

Sports is already dominating cable costs, so if AT&T can deliver realtime sports in multiple modes this can allow them to infiltrate areas where they don't have a presence, and augment ones where they do. If they combine fixed wireless with multicast this can deliver sports regionally. DTV also manufacturers their own systems and sats which gives an advantage to AT&T.

I argue that metro areas are already saturated w/ wireline, so what is left is the rest of the country, and that is where sat and fixed wireless will blossom. Sure it's expensive now, but it won't be like that forever, especially if they can used mixed-mode LTE (for backhaul) and whitespace for local delivery. Add in sat and now you can deliver fixed wireless in a more economic form.

How do you get the data to the region? Satellite. Then put a regional CDN box to buffer the last week or so of content for last mile delivery of non-realtime.

Also 4K video and the like can be delivered on the onset from sat without stressing the IP networks. Think new and interactive tech.

michieru
Premium
join:2009-07-25
Miami, FL
Reviews:
·Comcast Business..

Re: This quote tells you all you need to know...

The problem is that nobody trusts AT&T. Anything that is innovative will cost three times of what it should and instead of AT&T buying them everyone will prefer someone else.

If AT&T's merger is approved and their original idea fails then you can expect for them to recollect that money somewhere and it will come in the form of price increases to current DirecTV users.

The company has policies that are not within the interest of consumers. Instead we are seen as cows and AT&T is the slaughter house. So even if it makes perfect sense from a technical standpoint the average person is against the merger because nobody wants to be milked to death and rather want a better quality of life.

[Get's off box]
silbaco
Premium
join:2009-08-03
USA

1 edit

1 recommendation

It's also extremely wrong. At&t is using primarily stock to buy DirecTV, not cash which would be needed to deploy FTTH to 71 million.

It also doesn't cost $700 per home passed unless you figure only very-highly populated areas. Go to smaller cities and the number goes up. Step out into the rural areas and the number enters the thousands. Look at the numbers presented by some of the small telcos that are running FTTH. The cost is extremely high.

cbrigante2
Cubs 20??
Premium
join:2002-11-22
North Aurora, IL

1 recommendation

»www.youtube.com/watch?v=jsW9MlYu31g
smcallah

join:2004-08-05
Home
Except that if AT&T passed all those homes with fiber, they'd have to invest in more video hardware to get that video to homes, as well as the set top boxes to get that video to homes.

And on top of all that, they'd have to attempt to get people to subscribe to the service.

And that's going to take a lot longer than a year to complete.

They acquire a company because they want immediate infrastructure and customers, which means immediate income. That's what they're paying for. They're not simply paying for "homes passed."

coldmoon
Premium
join:2002-02-04
Broadway, NC
Reviews:
·Windstream

Re: This quote tells you all you need to know...

said by smcallah:

Except that if AT&T passed all those homes with fiber, they'd have to invest in more video hardware to get that video to homes, as well as the set top boxes to get that video to homes.

And on top of all that, they'd have to attempt to get people to subscribe to the service.

LOL - you mean they would have to...erm...compete? Heaven fobid /s
--
Quietzone - Protection you can trust!
Bob61571

join:2008-08-08
Washington, IL

Where will the 15 million rural customer locations be?..

What will the DirecTV customers do if they are NOT in these locations?
Will AT&T give a decent deal to these customers if they use the internet from local cablecos, or local telcos, or local WISPs?

And, what about the huge amounts of AT&T areas where they have failed to upgrade their copper DSL from the current 3MB or 6MB speeds? Shouldn't AT&T be worried about losing these areas to other more modern faster Internet providers also?

My conclusion: AT&T has their hands full, just trying to upgrade their old Internet network, let alone the entire USA where DirecTV operates.

Personal note: AT&T, you own a high speed fiber line that goes within 1/8 mile of my house, and a staffed service building within 1/4 mile of my house. 5000 people live within 1 mile of this fiber line. If you were really serious about providing high speed Internet to most of the US, you would be looking at using these fiber lines (as a type of interstate highway entrance/exit) for the millions of Americans that you pass by on the way to major metros.
elefante72

join:2010-12-03
East Amherst, NY

Re: Where will the 15 million rural customer locations be?..

Fixed wireless. DSL is dead.

Probitas

@206.248.154.x

Re: Where will the 15 million rural customer locations be?..

Wireless is no substitute for wired services. Only on paper in some CEO office is it acceptable. Big rain storm, service is out. Latency for something requiring quicker response is also an issue. People scoff at gamers, but there are a lot of them out there and they spend money too.

DSL is alive and well. The problem is it is regulated and no one wants to play fairly with that. They want to force wireless (unregulated) onto people by gutting current regulations then treat consumers like milk cows.
ke4pym
Premium
join:2004-07-24
Charlotte, NC
Reviews:
·VOIPO
·ooma
·Verizon Broadban..
·Northland Cable ..
·Time Warner Cable

Re: Where will the 15 million rural customer locations be?..

said by Probitas :

Wireless is no substitute for wired services. Only on paper in some CEO office is it acceptable. Big rain storm, service is out. Latency for something requiring quicker response is also an issue. People scoff at gamers, but there are a lot of them out there and they spend money too.

DSL is alive and well. The problem is it is regulated and no one wants to play fairly with that. They want to force wireless (unregulated) onto people by gutting current regulations then treat consumers like milk cows.

I think by fixed wireless, elefante72 was meaning LTE. LTE doesn't suffer rain fade (nor should a properly aligned modern dish install, either).
Chubbysumo

join:2009-12-01
Superior, WI

Re: Where will the 15 million rural customer locations be?..

LTE is still no substitue for fixed line broadband, and it never will be in its current state. High overage fees and low caps are not a replacement for DSL.
Cobra11M

join:2010-12-23
Mineral Wells, TX

Re: Where will the 15 million rural customer locations be?..

True fixed wireless providers will take up the slack, dish, sprint, Nextlink (in north texas), theres many of fixed providers popping up WISP, that can do rural areas no issues
wispalord

join:2007-09-20
Farmington, MO
yes it is on the licenses bands and 5.4-5.8 ghz you can get over 200mbs through it thought internet speeds are based on back haul and it don't break unless its removed from the house by wind rain nothing affects it mount it good if it the tornado is coming you shouldn't be online anyhow lol though I say this and I would be the one outside making sure the antenna didn't move...
BiggA

join:2005-11-23
EARTH
The biggest issue is bandwidth. Latency is basically a non-issue on LTE, but aggregate bandwidth makes LTE suitable only for the most rural areas with very low POPs density.
smcallah

join:2004-08-05
Home
You seem to not know how fiber that AT&T has laid in the ground works. Just because fiber goes near you doesn't mean it's fiber than can be used to service you. Do you have any idea how many fiber strands are in there? Where does the fiber terminate? Fiber is just not some magical medium that you connect to and voila, you have service.

There are so many factors that you don't know about the fiber that you frustrate yourself into believing that AT&T is purposely not serving you, even though fiber is near you.
UofMiamiGrad
Premium
join:2001-02-03
Great Neck, NY

NFL Sunday Ticket or Bust

Well the whole deal hinges on Directv being able to renew the NFLST package that ends after this upcoming season. If Directv fails to get a new deal AT&T walks from the merger.

»online.wsj.com/news/articles/SB1···no64-wsj

For AT&T Inc., T -1.93% DirecTV DTV -1.37% is only as important as its football rights.

AT&T can walk away from its $49 billion merger with DirecTV if the satellite-TV provider isn't able to renew its prize "Sunday Ticket" offering with the National Football League on "substantially…the terms discussed between the parties," AT&T said in a filing with the Securities and Exchange Commission.

morbo
Complete Your Transaction

join:2002-01-22
00000

Re: NFL Sunday Ticket or Bust

This puts DirecTV in a difficult negotiating position.
Cobra11M

join:2010-12-23
Mineral Wells, TX

Re: NFL Sunday Ticket or Bust

whats a few billion to exit out of the business
SunnyD

join:2009-03-20
Madison, AL

What spectrum does DirecTV have that AT&T wants?

That's all I really want to know. DirecTV must be holding some spectrum that AT&T wants. That and the news of the NFL licensing condition. Those are really the only two reasons AT&T has to buy someone like DirecTV, especially for that amount of money.
Cobra11M

join:2010-12-23
Mineral Wells, TX

Re: What spectrum does DirecTV have that AT&T wants?

just sat spectrum....

Senna

@12.226.156.x

AT&T is Already Being Misleading to Get DirecTV Deal Approved

This might be good for rural areas that don't get diddly squat. If they do the service is awful.

End of line...
Cobra11M

join:2010-12-23
Mineral Wells, TX

Re: AT&T is Already Being Misleading to Get DirecTV Deal Approved

haha end of line.........

hjdiet

join:2004-02-12
Bethlehem, PA

??

I don't see how this can benefit the average consumer... So now they can offer a bundle package? Big deal...
ATT now have less money to upgrade their Wireless network..

SlowFITL

join:2012-02-01
Mobile, AL
Reviews:
·AT&T Southeast

Convert U-Verse video customers to satellite?

I see the potential here of converting U-Verse video customers to satellite where possible. This would free up the available bandwidth over the VDSL connection allowing them to keep up with cable for a little while longer. They could still deliver all VOD via internet connection. For simple broadcast TV I really can't think of a reason not to do this.
BiggA

join:2005-11-23
EARTH

Re: Convert U-Verse video customers to satellite?

No. They are two separate services. U-Verse has virtually unlimited channels, albeit pathetic total bandwidth at one time, but the big point is that U-Verse can service MDUs and locations with trees, whereas DirecTV can't.

SlowFITL

join:2012-02-01
Mobile, AL
Reviews:
·AT&T Southeast

Re: Convert U-Verse video customers to satellite?

said by BiggA:

No. They are two separate services. U-Verse has virtually unlimited channels, albeit pathetic total bandwidth at one time, but the big point is that U-Verse can service MDUs and locations with trees, whereas DirecTV can't.

Hence why I said where possible. In those areas all bandwidth could be allotted to faster speeds.
BiggA

join:2005-11-23
EARTH

Re: Convert U-Verse video customers to satellite?

Not really, as they offer speeds that use up most of the profile today, when something is recording on the DVR, or someone is watching TV, the QoS gives the bandwidth to the TV and the internet slows down... it's like going back to the days where you couldn't be on the phone and the internet at the same time... that's what pathetic infrastructure gets you...

pjcamp

@74.95.27.x

so now my choices in this area are

AT&T, Comcast and Dish.

I hear Dish is nice.

ilikeme
I live in a van down by the river.
Premium
join:2002-08-27
Sugar Land, TX
kudos:1

Re: so now my choices in this area are

Not really lol
ram1220

join:2009-07-03
Allen, TX

Deny Merger and Break AT$T Up

I hope the deal fails. There is no way that this will benefit the consumer. No way at all. And you can bet that AT$T does not have the consumer's best interest in mind. Maybe their wallet but not their best interest.
In my opinion not only should this merger be denied. But AT$T needs to be broken up yet again. Just like back in the 80's when they got too big for their britches and continually screwed the consumer. They need to be broken up now.
I don't have a choice for internet service where I am. So I have to pay AT$T for their Uverse. I dumped Uverse TV for DirecTV and I will be darned if I will keep DTV if this merger goes through. I will either go to Dish or cut the cord completely. I hate AT$T and everything they represent and I will not give them another cent more than I have to.

Simba7
I Void Warranties

join:2003-03-24
Billings, MT

What about deals with DSL providers?

I know a few people here that have a double play, CenturyLink xDSL and DirecTV. What would this do to their customers?
15444104
Premium
join:2012-06-11

I think AT&T/DirecTV and Comcast/TWC mergers are both going to be "DENIED"!

There are just too many obvious conflicts of interests and monopolistic red flags for EITHER of these deals to be approved, the public has awakened and is
finally screaming at their representatives in Congress so loudly that this time the disgusting lobbyists that slither though the Halls are not going to be able to
bribe with impunity this time.

The AT&T deal is really puzzling. The fact with that HUGE! chunk of cash, they could build out to more surburban and rural areas with modest ADSL2 speeds by using fiber and give a huge unserved market at least 12- 24 Mbps, remember most of these folks can not get more than dial up or equally crummy satellite internet. Sure it is not the 100 Mbps or 300 Mbps that fortunate folks in more built up areas get but none-the less many folks would gladly pay for such service.

It is just disgusting to see how devolved AT&T has become over the past thirty years with deregulation in place.

I say that cable cos and telcos should be REREGULATED heavily as they were back before the break up days. At least with AT&T, while the prices were higher, the service was generally excellent, and they were constantly innovating new technologies.
VerizonCynic

join:2006-10-25
Lakewood, CA
Reviews:
·Verizon FiOS

Reality bites

In zip code 90041 all that is offered is ATT "u verse" (aka re-branded dsl) at speeds of 1.5 down and 0.5 up. MAX. This is in the middle of the city of los Angeles in an area of 700k to 1 mil dollar homes. thats right. Facts. And the ONLY alternative is time warner. you know those guys already. I dont even know if I could call it redlining. An ATT pole climber supervisor at the property told me last year that to bring fiber to the closest node (1500 feet away) is about 180k per node. That node now looks circa 1960. Do some math now.
--
Lakewood Accountability Action Group | »www.LAAG.us | Demanding action and accountability from local government

butcherbob

@23.242.106.x

Re: Reality bites

Hi. Fellow 90041 here. I use TW cable for internet only and get consistent 33.9/4.0 with an average down time of 10 minutes once a year for $89.

Also use DirecTV, 3 units, which seem to last ~3 yrs being on 24/7. Not great, but not that bad. My computer hasn't been turned off in 6 years and still works fine.
I'm watching this merger closely as I don't intend to stay with them if AT$T buys them, as I don't see how prices won't go up.

linicx
Caveat Emptor
Premium
join:2002-12-03
United State
Reviews:
·TracFone Wireless
·CenturyLink

It makes no difference

AT&T is a telephone company

FCC ensures wireline connectivity from border to border inside the physical boundaries of the United States.
FCC licenses all US terrestrial television stations
FCC licenses all US terrestrial radio station
FCC licenses US Ham Radio Operators.

FCC does not interfere with other devices. IE: wireless, cellular, cable, computer, or satellite.
--
Mac: No windows, No Gates, Apple inside