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 The chief executives of the No. 2 wireless carrier and the largest
U.S. satellite TV service provider testified about their proposed
$48.5 billion deal at hearings in the House of Representatives and
the Senate, and said the scale the merger would allow them to save
on the high costs of negotiating rights to video content.
But there were some tough reactions in Washington.
"I am very, very skeptical as a senator, not just as a consumer,"
senator Richard Blumenthal, a Democrat from Connecticut, said at a
hearing by the Senate Judiciary Committee's antitrust panel.
Blumenthal asked AT&T CEO Randall Stephenson whether he could commit
to pass on the savings from lower content fees to consumers
dollar-for-dollar.
"No sir, I can't," Stephenson said, but added he hoped the merger
would result in slower price increases for consumers.
"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."
Michael White, DirecTV's Chief Executive added that he expected
customers to see better value bundles.
"It’s pretty hard to commit to lower prices on pure-play TV because
of the price of content," he said.
The companies say their merger would also allow them to better
compete with cable companies and provide improved Internet service
to rural areas.
But representatives of content producers and smaller cable operators
spoke out against the deal, saying the combined company might wield
too much power over the creation, distribution and costs of
programming.
The AT&T/DirecTV merger is one of several roiling the cable and
wireless industries. Consumer advocates are worried that
consolidation might result in fewer choices and higher prices for
consumers.
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The others mergers are Comcast Corp's $45.2 billion bid for Time
Warner Cable Inc and Sprint Corp's potential bid for T-Mobile US
Inc.
The Justice Department, which ensures mergers comply with antitrust
law, and the Federal Communications Commission, which has a broader
public-interest standard, will have to approve the deal. Lawmakers,
although influential, do not have a formal role in deciding the fate
of deals.
Earlier on Tuesday, Stephenson also told House Judiciary Committee
lawmakers that AT&T's proposed purchase of DirecTV does not compare
with other mergers that are shaking up the telecommunications
industry because the companies largely provide different services.
Comcast, however, has stressed that its bid for Time Warner Cable
would combine two companies that serve different markets, while AT&T
and DirecTV overlap in serving about 25 percent of U.S. households.
(Reporting by Alina Selyukh and Marina Lopes; Editing by Jonathan
Oatis and Andre Grenon)
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