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Print 21 comment(s) - last by StevoLincolnit.. on Jul 1 at 10:52 PM

It hopes cost savings will find their way into prices

AT&T's potential acquisition of DirecTV has many feeling skeptical due to the possibility of higher prices and fewer choices for consumers, and the telecom company's latest remarks in hearings with lawmakers didn't seem to ease that skepticism.

According to Reuters, AT&T CEO Randall Stephenson told lawmakers at hearings in the House of Representatives and the Senate that he can't promise lower prices for consumers "dollar-for-dollar" in the way of savings from lower content fees. 

However, he does see potential savings in other forms. 

"One would have to believe in the market and the market pressures, and that market pressures will compete margins away and cost savings will find their way into prices," said Stephenson.

DirecTV CEO Michael White added that savings could possibly be seen in the way of value bundles, but that committing to lower prices is difficult because of current content prices.
 

Both companies agree that a merger would allow them to provide rural areas with better Internet services and compete with cable companies.

But many are still concerned about what such a merger means for competition in the cable market, since both AT&T and DirecTV are in the same business. 

The Justice Department and the Federal Communications Commission (FCC) will ultimately decide the fate of the merger. 

AT&T and DirecTV announced their $48.5 billion USD merger just last month. 

The merger comes at a sensitive time when consumers, lawmakers and the tech industry are still dealing with Comcast's $45 billion USD purchase of Time Warner Cable. 

Source: Reuters



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By tayb on 6/25/2014 1:54:56 PM , Rating: 5
AT&T should be smashed into tiny little pieces, scattered across the market, and not legally allowed to ever merge back together again. They are the freaking Mr. Potato of the corporate world. Break up their monopoly and they slowly put themselves back together again.




By Flunk on 6/25/2014 1:59:30 PM , Rating: 3
Tried that already, didn't seem to help.


By FITCamaro on 6/25/2014 2:50:41 PM , Rating: 2
First off, they're not a complete monopoly. There are competitors in the US. Several.

Second, the monopoly these companies have on an area was given to them by the government. Now instead of remove that, you want them to fix it by making them smaller again. But they'll still have a stranglehold on an area. Meaning you still won't have any more competition in that area.


By Samus on 6/25/2014 5:55:27 PM , Rating: 5
As much as I hate AT&T, I think Verizon is a far more dangerous monopoly. AT&T + Verizon, as companies, account for most internet subscribers, most cable subscribers (in the form of Time Warner and Comcast subsidiaries for Verizon), and most cell phone subscribers.

I don't think people realize exactly how small T-mobile and Sprint are. Together, they have less than HALF the subscribers Verizon does, and still far less than AT&T, which is why the merger may actually succeed between the two.

Comcast/Time Warner should never have been able to merge under the Verizon umbrella. But the lobbyists did their job with a Trojan horse running the FCC.


By Camikazi on 6/26/2014 10:29:00 AM , Rating: 2
Verizon doesn't own either Comcast or Time Warner, Comcast and Verizon have partnerships but they do not have ownership of each other and Time Warner is on its own as well.


By StevoLincolnite on 6/25/2014 5:56:33 PM , Rating: 3
I think a better alternative would be to have their networks opened up for competitors to use.

Many countries only have a single monopoly on the network infrastructure, but have opened up the networks to allot of small players which helped drive down prices substantially.


By FITCamaro on 6/26/2014 7:22:42 AM , Rating: 2
I don't agree with that either. That's similar to how the EU forced Microsoft to basically help its competitors how to compete against it's own products.

Many countries are socialist in nature. The US is not supposed to be. I have no problem with requiring others to build their own network. No one should be forced to product access to what they built so others can compete with them. What you're talking about is nationalizing all telecommunications infrastructure.

Other players are willing to build networks. Verizon and Google for instance. But both are blocked because of the mandated monopolies in an area. They can largely only build in new areas. Get rid of the legal monopolies, allow anyone to build a network, and over time the competition will come in. Yes in rural areas there will likely only be 1 player. But that is the sacrifice you make to live in a rural area. You probably won't have all the choices that those in more populated areas have and you'll likely pay more for it.


By Solandri on 6/26/2014 9:29:53 AM , Rating: 5
That's already how the U.S. sells natural gas, electricity, and long distance phone service. One company owns the pipes or wires, but multiple companies are allowed to sell the gas or electricity or phone service that flows through them.

Socialist or capitalist has little to do with it. Any time you have a situation where the best method of delivery is clear but the best source of the content being delivered is not, it's best to have a single set of pipes/wires, but multiple competing suppliers. Consequently with gas and electricity, we have a single company awarded a contract for building and maintaining those pipes/wires. But they are prohibited from selling the content that flows through those pipes/wires. They're closely monitored by a PUC (public utilities commission) to make sure they're offering fair pricing to all content providers who wish to sell the content which flow through those pipes/wires. They're even allowed to sell content via an independent subsidiary, as long as they don't give it favorable pricing. Long distance phone service is a bit different but the concept is the same. The local phone company owns and maintains the phone lines, but they're prohibited from providing long distance phone service and must provide fair pricing to all long distance carriers.

Alas that's not the situation with cable TV. The company that owns the cables also entirely controls the content that flows through them. This was necessary way back when cable TV was new and it wasn't clear what was the best way to wire up homes. Different cable TV companies would try out different wiring methods and compete with each other. The ones whose wiring methods were better ended up rising to the top. Capitalism at work. (Same thing with cell phone service. Carriers adopted GSM or CDMA, and CDMA ended up winning. GSM eventually added CDMA to its spec for data services, retaining the original GSM spec only for voice calls. Competition allowed a better communication method to beat the government-mandated method.)

But at this point I think it's pretty clear that fiber to the home is where cable TV and cable Internet is headed. Cable should now be recognized as a utility, and regulated as such. The "cable company" can own the physical cables and charge for installing and maintaining it, but they should be prohibited from selling anything that's carried over those cables. Instead, multiple TV and internet companies can compete to sell you the TV channels and internet service you want - the virtual content which flows through those cables.


By StevoLincolnite on 6/27/2014 4:59:29 AM , Rating: 2
quote:
Many countries are socialist in nature. The US is not supposed to be. I have no problem with requiring others to build their own network. No one should be forced to product access to what they built so others can compete with them. What you're talking about is nationalizing all telecommunications infrastructure.


I live in a democratic, capitalist nation.
It's exactly how we do it here.

And not only is our broadband faster, it's cheaper too.


By tamalero on 6/30/2014 2:57:51 PM , Rating: 2
I still find it laughable how some people bash the EU. But at same time praise their claim of their nation's
"lobbying for protection" means "perfect capitalism".


By StevoLincolnite on 7/1/2014 10:52:56 PM , Rating: 2
I'm not in the EU. ;)


LOL
By BRB29 on 6/25/2014 2:34:09 PM , Rating: 5
The savings would be in the way of "value bundles" lol!!!

The same value bundles that comcast, verizon and time warner have been pushing down subscribers' throats the extra 300 channels they don't watch, the phone they don't use and the internet speed that gets capped if you want to view netflix.




RE: LOL
By zero2dash on 6/25/2014 3:49:17 PM , Rating: 2
Yeah, and (as a DirecTV customer and a former AT&T U-Verse tv/internet/phone customer)....I don't want their bundles.

As far as I'm concerned, I'm keeping my Charter 100/3 $44.99 line for the rest of my life.

I'll keep DirecTV as long as AT&T leaves it alone. The minute that AT&T starts messing around with DTV, I'll be calling to cancel - and the second call will be to Charter and try their new Spectrum tv service. If that ends up being crap, I'm switching to OTA/Netflix/Hulu+ (which we probably oughta do anyway).

U-Verse TV is not bad, other than being worse in HD PQ than DTV; but their internet, for what they charge for those speeds compared to Charter...no thanks.

I'm happy with our AT&T Wireless, especially now with the share plans being fairly aggressively priced. But I refuse to use any AT&T home services.


RE: LOL
By Solandri on 6/26/2014 9:39:30 AM , Rating: 2
I was cleaning house and found a cable bill from 2000. Basic cable TV service was $17/mo. A premium channel add-on was $10/mo. About $1.50/mo extra for the tuner box rental. $28.71 in total.

It's amazing how much cable companies can get people to pay when there's no competition and prices are slowly increased so they don't notice.


Seriously?
By Belegost on 6/25/2014 1:55:42 PM , Rating: 3
[quote]"One would have to believe in the market and the market pressures, and that market pressures will compete margins away and cost savings will find their way into prices," said Stephenson.[/quote]

Well that might be believable if there was any sort of free market to exert such pressures. But given that the only competitors here are Dish and the local cable operator, I see an oligopolistic market with little to no pressure on pricing.

So unsurprisingly this quote is complete bulldung.




RE: Seriously?
By rdhood on 6/25/2014 2:18:40 PM , Rating: 2
quote:
Well that might be believable if there was any sort of free market to exert such pressures. But given that the only competitors here are Dish and the local cable operator, I see an oligopolistic market with little to no pressure on pricing.


And where I am, there is no local cable operator. There is ONLY DISH and DirectTV. There is no "free market to exert such pressures".


please
By Motoman on 6/25/2014 3:15:30 PM , Rating: 2
quote:
One would have to believe in the market and the market pressures, and that market pressures will compete margins away and cost savings will find their way into prices


That is the largest pile of BS I have ever seen.

First of all, there ALREADY is no "market pressure" in the cable TV market. You all have MONOPOLIES as it is. This is a key reason why the paid TV industry is so wildly anti-consumer - we're all so f$cking stupid that we give the cable companies regional monopolies. Thereby guaranteeing that we all get f%cked as hard as possible.

And in what universe does merging very few companies into even fewer companies *increase* competition and/or market pressure? Oh right...none.

The whole paid TV industry is a horrible anti-capitalist prank. No free market, no competition, no consumer choice, etc. etc. etc.

You want a *real* market, do this:

1. Immediately eliminate all existing monopolies/duopolies/whatever. And make it illegal to provide any kind of alignment at all between municipalities and paid TV providers.

2. Claim all physical infrastructure as public property, and manage/regulate it the same way that powerlines and telephone lines are. There should be no difference between those industries and the paid TV industry in this manner. Anyone that wants to start up a new paid TV service can get access to said infrastructure in the same manner as a new phone provider could. Make it the same.

3. Require all paid TV services to include all OTA programming they'd normally get in their area as part and parcel of any paid TV service package.

4. Require all paid TV services to offer all channels on an a la carte pricing model. Offer bundles too if you want, but regulate the a la carte pricing to be actually reflective of cost-to-serve so that they can't offer a 100-channel package (with 2 useful channels) for $40 and then offer just ESPN on it's own at $35.

Probably a good start. Give me a call when we implement that. Otherwise, STFU with your horrifically retard3d comments about "market pressures."




RE: please
By letmepicyou on 6/25/2014 4:43:51 PM , Rating: 2
I agree 100%, especially with the ala carte channel selection. I haven't had cable tv (nor dish nor direct) for YEARS because of prices that increase at an idiotic rate, zero choice, and an anti consumer marketing mindset. I'm not going to pay for 300 channels of nothing to watch. Price should be no more than .50 cents per channel (.25 cents per channel would bring me back to cable INSTANTLY) and let me pick WHATEVER I want. Personally I could live with a dozen channels and an $8 a month cable bill that I would be HAPPY to pay.

What makes more sense to you, cable companies? $8 a month from a customer, or ZERO from a non-customer?


By The0ne on 6/26/2014 11:07:14 AM , Rating: 2
No one heard about the Supreme court ruling. That generalize decision will most certainly makes it way to cable companies, net and tv.




Competition? What competition?
By jRaskell on 6/26/2014 5:31:29 PM , Rating: 2
quote:
But many are still concerned about what such a merger means for competition in the cable market, since both AT&T and DirecTV are in the same business.


Competition in the cable market? Are you serious? There never was competition in the cable market. It's completely @#$%ed! Has been for decades. Will remain so for decades.




By mike8675309 on 6/26/2014 5:48:38 PM , Rating: 2
With the majority of the public remaining captive to a single market cable provider, there simply is no market motivation to lower prices for pay television. Cable effectively ignores satellite TV and is doing fine. If AT&T and DirecTV see any savings from such a merger it'll just go straight to their bottom line and increase their profits. Nothing is occurring in the market place to force any price decreases.

And if these two companies would merge, at best prices would stay the same, but with decreased competition you have to assume prices would increase.




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