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Buying DirecTV Would Lower AT&T's Costs, But Not Your Bill

AT&T lobbyists and lawyers are hard at work trying to sell the government on their need to acquire DirecTV. Despite the fact that eliminating DirecTV would kill off an AT&T U-Verse competitor, AT&T in filings this week claims that buying DirecTV is the only way they can compete against a larger Comcast (meaningful network upgrades are, apparently, out of the question).

While AT&T states that being larger could reduce their programming costs by as much as 20%, there's no indication that savings will be passed on to you:

quote:
AT&T told investors its own bills would shrink. But it’s not saying that about the bills of its customers. Instead, AT&T is telling the feds, via a public filing, that combining with DirecTV may help slow the rate that your TV bill goes up. But it can’t promise it will go down. Instead it uses the words “downward pressure.” As in: “There will be significant downward pressure on the prices of the new integrated bundles of AT&T broadband and DIRECTV video, even without factoring in the improved quality such bundles will offer consumers."
In other words, despite AT&T's lowered programming costs (gleaned from having better leverage from being bigger), consumers shouldn't expect those cost savings passed on to them. AT&T's telling regulators the deal will only make your rate hikes slightly less severe, and if history is any indication even that seems unlikely. Cable companies (whether satellite, telcoTV or cable) have repeatedly made it clear they're going to keep pushing rate hikes of all kinds until customers start to seriously revolt.

AT&T's latest filings with the government this week also re-stated the company's promise that if they're allowed to buy DirecTV they'll expand broadband to 15 million additional households. Except as I recently noted this "expansion" is a combination of 2 million FTTH developments or college campuses where fiber's largely already deployed, and 13 million LTE users that AT&T planned long before DirecTV was a twinkle in their eye.
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motoracer
join:2003-09-15
united state

motoracer

Member

Dumb?

Nobody is dumb enough to believe AT&T. They've never dropped their prices. The only people that would actually believe this are people that are getting paid off (and even then, they still wouldn't believe it).
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: Dumb?

said by motoracer:

They've never dropped their prices. .

Absolute nonsense.

While I have no desire to ever do business with AT&T in any form, they do drop their prices all the time, if you bother to pay attention and do the math.

motoracer
join:2003-09-15
united state

motoracer

Member

Re: Dumb?

said by elray:

said by motoracer:

They've never dropped their prices. .

Absolute nonsense.

While I have no desire to ever do business with AT&T in any form, they do drop their prices all the time, if you bother to pay attention and do the math.

Really? The fastest internet they can offer me is 6 mbps @ 34.95, with $99 installation and $100 gateway...and that is for a 12 month contract. After that, the monthly goes to $51. Or, I can go with TWC for $34.95/month for 15/1 (which is soon to be upgraded), free installation, and I can buy my own modem for around $50-70 with no contract. Maybe math isn't YOUR strong subject.
whoyourdaddy
join:2013-02-20
Honey Brook, PA

whoyourdaddy

Member

funny

make our increase less sever lmao bunch a bull it still go up 5-10 bucks a year if more

Kuro
@75.151.50.x

Kuro

Anon

Too big?

The reason that they are not big enough to compete should send warning lights that not only the Comcast/TW merger is a bad thing but also that Comcast needs to be broken up. Cant wait for the reasoning when a Comcast/AT&T merger gets announced.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

tshirt

Premium Member

Re: Too big?

said by Kuro :

The reason that they are not big enough to compete should send warning lights that not only the Comcast/TW merger

Yup, wouldn't want ISP's to be successful, profitable, or to stay in business! ? ?

Kuro
@75.151.50.x

Kuro

Anon

Re: Too big?

If you have 40+ Billion to buy a competitor rather than upgrade and expand yourself and get that success and profit down the line rather than now then there is an issue with the way business is done.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

1 edit

tshirt

Premium Member

Re: Too big?

Cable A isn't going to overbuild Cable B Cable A (Comcast in this case) is continuously upgrading and expand service offerings.
Since TWC offered itself up for sale, it is a way to expand territory out to the (previous) limit of 30 % of homes.
And Guess what, this is down the road for cable which has be working for more then 1/2 a century to get to this point.

Or perhaps you're saying " I shouldn't pay, charge the next generation" ?

Kuro
@75.151.50.x

Kuro

Anon

Re: Too big?

No I will pay if need be. I just don't like the current status quo where you are stuck with one and only one cable provider because they bought out everyone else.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

tshirt

Premium Member

Re: Too big?

And before you had 2 cable providers?
Perhaps you had 2 wired phone companies?
2 fiber providers?

more than 1 of any group is rare because of the extreme cost, and the consolidation, happens for the same reasons, bigger IS more efficient. Bigger does mean more purchasing power for content and plant upgrades.
see, bigger made a lot of "bandwidth getting cheaper" possible which you love, but it also means pricing the less efficient providers out of the market and with them some specialty services you like too.

Consumers had the choice to continue to shop at a small butcher, and then a bakery, and then a dairy and a farm stand/produce market.
instead they chose supermarkets for convince and price, and when supermarkets weren't one stop enough more efficient models (Costco, Sam's club, etc.) took so much money out of the market that supermarkets had to follow and are now consolidating rapidly. If consumers as a group want higher levels of service they'll pay more for it like trader joe's, whole foods etc. and if the group supporting those stores shrinks prices will go up or the brands/service level will disappear/be absorbed in to the big/ impersonal.
When people choose to shop with their wallet they need to remember to feed the ones they want to thrive, not just remove the payment/profit from the market.


HexMen
join:2014-06-12

HexMen

Member

Re: Too big?

said by tshirt:

bigger IS more efficient

mmm .. I don't generally agree with that part. Bigger necessitates additional -- usually expensive -- process and procedures, which in turn can bring efficiency. But overall, the bigger they get over time, and how well that growth is managed, and to what level different groups coordinate and consolidate, or even stand independent (usually for financial accountability), all impacts the efficiency. Million+ salaries are paid to the people with the skillset to be able to successfully oversee growth at this level. Why? .. because big = inefficiency, but much of the cost associated with that can be balanced and mitigated if done correctly.

The bottom line for the big companies is ROI (return on investment). The more they are willing to invest in solid process and procedures, the more efficient the company "can" (not will) operate. Most companies will set a threshold for their ROI, limited by diminishing returns, or the point in which throwing more money at problems isn't really going to improve much.

So back to main topic thoughts. Most of these decisions, strategies, and released media information are directly tied to Stockholders and quarter over quarter profitability.

Regardless of what anyone says, be assured that the push for "what makes them the most money", in both the short and long term projections, is what they will be saying "must be done". But don't think for a second that a fortune 100 company doesn't have plans "B" and "C" ready to go if it can't be done or gets blocked.

Failure may result in the need for cuts and restructuring until another suitable candidate is found.. or they go in a different direction. The Telecom Giant won't truly be in danger though until the major share holders decide the ROI is too far in the red, and start selling off major chunks of shares and bailing. THAT's the sign that "a pending deal" could make or break a company. So if a selloff and owner migration happens after a failure... we'll know they were telling the truth.. everything else is just gravy.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

tshirt

Premium Member

Re: Too big?

said by HexMen:

Bigger necessitates additional -- usually expensive -- process and procedures, which in turn can bring efficiency

And both TWC and comcast have reached that size already.

Suppose we regulated down to 1 per market/state...would you assume that we would have 50 really efficient companies.
or that we might a 25 really good ones and 25 really bad ones?
Would there be more competetition with 50, 1 in each market?
would advances like DOCSIS3 or ADSL2 exist? or would each group stick with their own market, ideas, and pricing?

But how small do you think ISP's need to be to regain that lost efficiency? 1 employees 20, 500,? at what point do they go between increasing value to death star?

suppose comcast/twc happes and they concentrate on improving their 1/3 of the market.
how can we encourage 2 other wireline gaints to become the responsible "incumbent" for the other 2 areas?


HexMen
join:2014-06-12

HexMen

Member

Re: Too big?

said by tshirt:

at what point do they go between increasing value to death star?

LOL - Now, I don't have all the answers, obviously, but that comment slew me =)

Umitencho
join:2012-08-11
Jacksonville, FL

Umitencho to tshirt

Member

to tshirt
Tell that to Citi group who in their quest to become the Wallmart of Wall Street helped lead the other investment firms into crashing or being bailed out using all of those mortgage bonds and repo cash to fund the expenses of trying to make the bloated company work. Bigger is not better.

imanogre
join:2005-11-29
Smyrna, GA

1 recommendation

imanogre to tshirt

Member

to tshirt
So ATT is not successful, profitable or isn't going to stay in business without this merger? Ludicrous.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

tshirt

Premium Member

Re: Too big?

said by imanogre:

So ATT is not successful, profitable or isn't going to stay in business without this merger? Ludicrous.

I didn't mention AT&T in MY post.

But perhaps you are unable to comprehend why these companies exist...their purpose is to make money by providing goods and services to those who choose to buy.
Buying another company when it helps fill a void in their product line is to further that purpose.

fiosultimate
join:2014-06-09
San Antonio, TX

fiosultimate

Member

Price

When was the last time your bill went down for the same services? Be real, they gotta make as much profit as they can get away with, otherwise I will short them
elefante72
join:2010-12-03
East Amherst, NY

elefante72

Member

Re: Price

my cell phone bills have been going down every year and speed and quality increasing. Heck my parents only pay $27 all in for unlimited talk/text and 500 MB data. But that is MVNO--maybe we should bring that back for HSI...

fiosultimate
join:2014-06-09
San Antonio, TX

fiosultimate

Member

Re: Price

We are talking about tv services, right??
biochemistry
Premium Member
join:2003-05-09
92361

biochemistry

Premium Member

Pricing out of business

The cable networks and providers are slowly pricing themselves out of business. Cord cutting is going to keep increasing. I could buy several DVDs/blurays a month and still end up ahead on cost savings. Netflix/Amazon Prime/Hulu/Roku is all you need.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: Pricing out of business

said by biochemistry:

The cable networks and providers are slowly pricing themselves out of business. Cord cutting is going to keep increasing.

No they aren't, and no, it isn't.
The average family household will pay whatever it costs for double- or triple-play services, so long as the content owners and networks restrict their access to traditional pay-tv providers.

I had this very conversation today with the broke sister, complaining about her bills - that she could completely do without phone, internet, and pay-tv, and I outlined it for her, as well as several compromise positions.

The bottom line? Lifetime Movie Network costs a minimum of $60-70/month (averaged), no matter how you slice it, and she, like virtually every Mom I know, won't give it up. As BiggA laments, cable's first amendment right means double- and triple-play doesn't cost much more than the LMN tier - so people shrug and pay.
said by biochemistry:

I could buy several DVDs/blurays a month and still end up ahead on cost savings. Netflix/Amazon Prime/Hulu/Roku is all you need.

Correction: you don't "need" any of those.

But for those who "want", in the aforementioned example, how do you serve up the same content that cable delivers, using Netflix/Amazon Prime/Hulu/Roku?
HiDesert
join:2008-08-17

1 edit

HiDesert

Member

Re: Pricing out of business

said by elray:

said by biochemistry:

The cable networks and providers are slowly pricing themselves out of business. Cord cutting is going to keep increasing.

No they aren't, and no, it isn't.
The average family household will pay whatever it costs .

To say there are no thresholds? Don't believe that. Everyone has a limit on what they will pay. If cable continue the hikes past the rate of inflation, people will cut or drop services. At which point cable will freeze rates. The main problem is carriage extortion. Disney is the worst violator of that.

They charge what they can. I have a house in Fiji and satelite costs only 50 a month FJD or around 28 USD. I just saw the new Tom Cruise movie in 3D in Fiji for 6 FJD or 3.3 USD. Believe me, if enough cut the cord in the US, prices will drop, and fast. And they will still make money. When I'm in the states, I just use OTA. Not because I can't afford it, but I don't want to endorse a corrupt system of carriage extortion and hate companies like Disney that line congress's pockets to keep that system in place.
tabernak4
join:2013-08-10

tabernak4 to biochemistry

Member

to biochemistry
Cable networks aren't pricing themselves out of business simply because they're typically providing the other pipe for your internet that you'd be going to. Really the only ones at risk of internet based content are the satellite companies, but they'll have rural customers needing their services for decades still.
biochemistry
Premium Member
join:2003-05-09
92361

biochemistry

Premium Member

Re: Pricing out of business

By cable networks I meant ESPN and the like. Their price hikes make Comcast and the like jack their rates up.

A smartalec had to correct my use of the word "need". Of course people don't even need electricity. However you could subscribe to the services I mentioned and supplement with DVD purchases for the shows and movies not available and still save money. The only wildcard left remaining is live sports a few of which can still be seen ota.

As for Comcast and their ilk, quite a few keep their TV service only because it is cheaper than having standalone internet. If regulations ever change that, we will see a lot of sweating from TV execs.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: Pricing out of business

said by biochemistry:

By cable networks I meant ESPN and the like. Their price hikes make Comcast and the like jack their rates up.

A smartalec had to correct my use of the word "need". Of course people don't even need electricity. However you could subscribe to the services I mentioned and supplement with DVD purchases for the shows and movies not available and still save money. The only wildcard left remaining is live sports a few of which can still be seen ota.

As for Comcast and their ilk, quite a few keep their TV service only because it is cheaper than having standalone internet. If regulations ever change that, we will see a lot of sweating from TV execs.

I corrected your use of the word "need" because someone has to.

"Needs" are very basic things that we, as a society, might find reason to subsidize for those charitable cases that, through no fault of their own, can't afford, and can't survive without.

Everything else is a "want", a luxury. The concept seems to be lost on most folks here, who are always looking for "someone else" to pay the freight for their lifestyle.

ESPN isn't pricing itself out of the market either.
The same households that will pay any price for LMN, will pay for basic sports packages to keep their DH at home.
biochemistry
Premium Member
join:2003-05-09
92361

biochemistry

Premium Member

Re: Pricing out of business

You knew the way in which I used the word need was in regards to those who think they cannot live without video entertainment not in the sense that they will die without it and require society to buy it for them. As far as I know Obama isn't yet paying for cable subscriptions directly though I am sure a fair number of welfare checks goto LMN and ESPN.
elray
join:2000-12-16
Santa Monica, CA

elray

Member

Re: Pricing out of business

The constant cry on this forum for muni-broadband indicates the desire to classify internet access as a "need", underwritten by the taxpayers, and by extension, pay-tv, since the "better broadband" speeds are primarily used for streaming video.

No one seems to want to take responsibility for their own lives.

maartena
Elmo
Premium Member
join:2002-05-10
Orange, CA

maartena

Premium Member

I don't like this....

AT&T buying DirecTV.
Comcast buying Time Warner Cable.
Sprint buying T-Mobile (after AT&T tried).

Pretty soon all the competition has been bought out.
elefante72
join:2010-12-03
East Amherst, NY

elefante72

Member

Re: I don't like this....

DirecTV -> Dead without land-based P2P network and AT&T wanted NFL. Dish is next
Comcast/TWC - That is not good
Sprint/TMO - Dead alone, dying together...What do you do? Maybe actually a credible #3. Nextel killed Sprint really slow... DT lit the fuse and wothout AT&T dough TMO network would still really suck. Now it's great where it works and still sucks for the other 80% of the land...

maartena
Elmo
Premium Member
join:2002-05-10
Orange, CA

maartena

Premium Member

Re: I don't like this....

said by elefante72:

Dish is next

I'm suspecting a new look at Verizon/Dish is already being speculated in the board rooms of both companies.....

CaptainRR
Premium Member
join:2006-04-21
Blue Rock, OH

CaptainRR

Premium Member

Re: I don't like this....

Not to mention all of the spectrum Dish is holding I am sure Verizon would love that.

chip89
Premium Member
join:2012-07-05
Columbia Station, OH

chip89 to maartena

Premium Member

to maartena
I don't to. Maybe sprint will have T-mobile like siruis & XM does but I doubt they will.

battleop
join:2005-09-28
00000

battleop

Member

Killing off a U-Verse Competitor?

"Despite the fact that eliminating DirecTV would kill off an AT&T U-Verse competitor"

Is U-Verse really that much of a competitor to anyone?
etaadmin
join:2002-01-17
united state

2 edits

1 recommendation

etaadmin

Member

Re: Killing off a U-Verse Competitor?

said by battleop:

Is U-Verse really that much of a competitor to anyone?

I see this as AT&T throwing the towel on uverse TV, they know they can't compete with mediocre (at best) picture quality and with ultraHD (4K) in our near future there is no way uverse TV (VDSL2) will be able to keep up with the rest of the industry.

If AT&T's intentions to deploy gigapower were real they wouldn't be interested in DirecTV, AT&T can funnel TV, internet and everything they want trough fiber. Since they are not serious about gigapower their solution for ultraHD is DirecTV this way they can 'liberate' uverse from the TV portion and offer the whole bandwidth for internet.
tabernak4
join:2013-08-10

tabernak4

Member

Re: Killing off a U-Verse Competitor?

Good point, U-verse TV never appealed to me as I'm maxed out at 18 Mbps, so much TV viewing or DVRing would eat into my bandwidth regularly. I'm a cord cutter, but I'd consider satellite before U-verse tv.

An honest gigapower deployment would still be very limited in their footprint for many years to come. Even if vectoring and new profiles double or quadruple current speeds for the rest, that's going to be limiting to most for 4k and even multiple HD streams.
tabernak4

tabernak4

Member

What's it matter anyway?

Directv and Dish Network have about the same prices anyway, as does U-verse and cable where I've lived the last few years. I don't see this being beneficial for anybody but At&t, however I don't see it being detrimental to DirecTV users or competition either. I just don't see this changing the dynamics of the competition other than At&t can flex as much muscle at the content providers as the bigger cable companies. There's an off chance U-verse and DirecTV customers will even see a few minor benefits.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Nothing...

Nothing AT&T has ever done is designed to save you money. Period.