The Clinton Herald, Clinton, Iowa

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May 19, 2014

AT&T aims for TV's future with $48.5B DirecTV deal

(Continued)

LOS ANGELES —

But the deal could face regulatory scrutiny from the Federal Communications Commission and Department of Justice. Unlike the cable company tie-up, the AT&T-DirecTV merger would effectively cut the number of video providers from four to three for about 25 percent of U.S. households.

Cable companies operate in regions that don't overlap. By comparison, AT&T provides TV service to 22 states, where it is a direct competitor to DirecTV, which operates nationwide. Reducing choice in those markets could result in higher prices for consumers, and that usually gives regulators cause for concern.

White said Monday that customers will see more competitive pricing from the combination with AT&T.

Stephenson said regulatory concerns would be addressed with a number of what he called "unprecedented" commitments. Among them:

— DirecTV would continue to be offered as a stand-alone service for three years after the deal's closing.

— AT&T would offer stand-alone broadband service for at least three years after closing, so consumers could consume video from Netflix and other online services, with download speeds of at least 6 megabits per second where feasible.

— AT&T would expand high-speed broadband access to 15 million more homes — to 70 million total — within four years.

— AT&T vowed to abide by the open Internet order from 2010 that the Federal Communications Commission is now in the process of revising after a court struck it down.

— AT&T vowed to sell its roughly 9 percent stake in Latin American wireless carrier América Móvil for about $5 billion.

Delara Derakhshani, policy counsel for Consumer Reports magazine's lobbying arm, Consumers Union, complained that the deal "is just the latest attempt at consolidation in a marketplace where consumers are already saddled with lousy service and price hikes."

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