In trying to acquire DirecTV (NASDAQ: DTV) for $49 billion, AT&T (NYSE: T) perhaps deliberately has opened itself up for the same level of criticism and scrutiny as Comcast (NASDAQ: CMCSA) in its ongoing quest to acquire Time Warner Cable (NYSE: TWC) for $45.2 billion.
Polka (Courtesy of ACA)
In fact, the suggested merger between the telco and satellite provider has only reinforced existing doubts for many about industry consolidation.
"ACA is troubled by the consolidation wave within the video subscription marketplace, highlighted by the Comcast-Time Warner Cable deal, the Comcast-Charter Communications (NASDAQ: CHTR) transactions (to trade and sell off subscribers) and now AT&T's proposed takeover of DirecTV," Matt Polka, president-CEO of the American Cable Association summed in an organization announcement.
The AT&T proposal, which Polka said "merits the closest scrutiny by the Department of Justice and the Federal Communications Commission" makes it "increasingly clear that Congress and the FCC simultaneously need to take a comprehensive look at the market that will exist if all these deals are approved and to decide whether existing rules that govern the current market are sufficient for the new industry order."
Polka was joined by Sen. Al Franken (D-Minn.), an ardent opponent of Comcast-TWC, who attacked the AT&T deal on the belief that it will lead to higher prices and less innovation. Franken made his remarks on CNN before the latest deal was announced, TechCrunch reported.
Both were joined by another Beltway insider, the National Association of Broadcasters which, in a statement attributed to Communications EVP Dennis Wharton suggested the merger "demands a hard look in an increasingly consolidated broadband and pay television marketplace."
NAB, of course, ground its own axe as well, noting that a decreased cadre of competitors in the pay TV marketplace doesn't jive with "increasing regulatory restraints on local TV stations--truly benefits consumers."
Also before the deal broke, word was leaked that the Comcast-TWC deal would be a "topic of conversation" between members of the House Communications Subcommittee and FCC Chairman Tom Wheeler, Broadcasting & Cable reported.
It's likely that AT&T's proposed deal will "draw some attention" as well, a Democratic subcommittee aide told the publication.
On the other side of the coin, B&C further reported that Herring Networks One, America News Network, and A Wealth of Entertainment came down in favor of the AT&T deal because it would provide more competition to Comcast and Time Warner Cable.
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