AT&T and DirecTV Merger creates Media and Internet Giant

The recent news of AT&T’s planned acquisition of the satellite TV company, DirecTV, remains the talk of the tech world. What will this merger mean for the average homeowner hoping for fast Internet access and the ability to stream movies and other content without any issues? Are monthly subscriber fees expected to increase?

Let’s take a closer look at this merger and what it means for the future of the Internet and television access in the U.S.

AT&T buys DirecTV for $49 Billion — a Closer LookAT&T and DirecTV Merger to create Internet and Media Giant

Coming hot on the heels of the merger announcement between Comcast and Time Warner, this potential marriage between AT&T and DirecTV — assuming both mergers meet with regulatory approval — creates two industry giants poised to dominate the increasingly-paired world of ISPs and media content providers. AT&T is expected to pay $48.5 billion for DirecTV, in addition to assuming the latter company’s debt — tacking on another $19 billion to the deal.

The move creates the second largest collection of TV subscribers in the United States, with the number one spot belonging to the combined Comcast/Time Warner. Comcast and AT&T would control over half of the American television market.

Regulatory approval (expected within 12 months) is a safe assumption, as both companies probably wouldn’t have gone public with the news of the merger without a strong possibility of approval. AT&T does have an out, however, if the NFL doesn’t renew DirecTV’s status as the exclusive provider of the Sunday Ticket out of market football package.

AT&T and DirecTV Merger — the Impact on Consumers

The merger between AT&T and DirecTV is really a marriage of convenience. AT&T’s U-verse television service enjoys only a fraction of the subscribers as DirecTV, while the satellite TV company is unable to efficiently deliver reliable high-speed Internet access.

Most important to consumers is how the AT&T and DirecTV merger will affect prices, and if they need to run a speed test to ensure they still are getting their expected bandwidth. AT&T has promised to continue offering DirecTV as a separate service for at least three years, with prices slated to remain essentially flat over that period.

AT&T expects to roll its cost savings (estimated to be $1.6 billion annually) into an expansion of their high-speed Internet network to 15 million additional homes, primarily in rural regions. Consumers can also take advantage of new service bundles from the combined company with discounted prices.

The Bottom Line

The bottom line is that subscribers need to take an active role in ensuring their ISP and television providers are keeping up their end of the bargain — no matter how big they are. Make sure the quality of your television service remains pristine, and run regular speed tests to ensure you’re getting the bandwidth you pay for.