As clouds gather over the Comcast deal, AT&T's planned $49 billion acquisition of DirecTV somehow appears to be sailing along, despite the fact that only the latter actually eliminates a direct competitor from the marketplace. Wall Street analysts argue they don't see the point in AT&T's deal, stating it might have made sense in 2005, but not in the age of cord cutting and fiber to the home.
A decade after deciding to deploy cheaper fiber to the node service to save money, AT&T now finds itself at the losing end of a speed battle with cable; yet somehow AT&T is arguing in a new filing that buying a satellite provider will help it expand its gigabit fiber to the home offerings.
"Based on the expected content cost savings alone, AT&T concluded that it will have an economically viable business case to justify expanding FTTP GigaPower's reach to at least two million additional customer locations that would not meet investment thresholds absent the merger, and AT&T has committed to do exactly that within four years of the closing of the merger," AT&T wrote in the filing.
"Significantly, this 'lift' in the economic viability of FTTP GigaPower service from the transaction is in addition to any further expansion justified by changes in the constantly evolving competitive landscape," claims AT&T.
There's nothing in AT&T's highly-redacted filing that "shows the math" for this claim. While the larger distribution power might lower the company's TV licensing content costs slightly, it's highly unlikely (this is AT&T we're talking about) that those savings would be passed on to the consumer. It's also highly unlikely this savings would be used to expand gigabit offerings with AT&T so squarely focused on wireless.
AT&T's "Gigapower" deployment of fiber to the home is aimed primarily at select high-end developments where fiber is already in the ground, but the telco has dressed it up as a much broader effort for PR effect. There's nothing specifically about the DirecTV acquisition that will impact these plans; in fact AT&T has a long history of pretending that already-scheduled broadband deployments are only possible if Uncle Sam gives it what it wants.
While buying DirecTV might let AT&T offer some interesting wireless/satellite combination options to rural markets, there's nothing about the deal that suggests it would provide any broader fiber reach than the $49 billion AT&T's spending on the deal could have.
