Dept. of Justice Will Not Block AT&T Purchase of DirecTV or Impose Conditiions

AT&T’s $48.5 billion acquisition of DirecTV has not raised antitrust issues, and is expected to receive Department of Justice clearance, Bloomberg reports.

The merger still needs approval from the Federal Communications Commission, which could demand concessions of its own, however.

AT&T already has publicly committed to expanded investments in rural high speed access as part of the deal. Beyond that, it would not be unusual for AT&T and FCC staffers to have informally discussed some voluntary concessions with FCC staff, were they deemed necessary by either party.

In substantial part, that clearance is structural. DirecTV is a satellite-TV provider and AT&T is telecommunications and mobile company. DirecTV is a leading video entertainment supplier.

But DirecTV has about 21 percent market share. AT&T has about six percent share. So the combined company should have about 27 percent share. That degree of concentration is not typically an issue. Once a firm reaches 30 percent, thinking tends to change.

In the past, no firm has been allowed to garner more than 30 percent share in the linear video, telephone or mobile business. 

DirecTV has virtually no high speed access customers, though it co-markets satellite high speed access provided by third parties.

Nor does DirecTV compete in the voice or mobile services businesses.

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