AT&T announced Sunday that it will buy DirecTV in a $49 billion deal that will create a new telecommunications and television giant. As The Washington Post reported, the deal is just the latest in a series of massive mergers that could fundamentally change the telecommunications industry.
But what does the deal mean for consumers? Details are still rolling in, but here is what we know so far.
I'm a DirecTV TV service subscriber. What's going to happen?
It's not clear yet. AT&T will take over DirecTV's approximately 20 million U.S. subscribers and your service should continue uninterrupted.
But be on the lookout for price increases. AT&T has said DirecTV customers will continue to pay standard, nationwide prices — but only for three years. After that, there are no guarantees.
What if I have DirecTV's stand-alone broadband Internet plan, but don't have TV service?
AT&T is also committing to offer a stand-alone broadband service, which caters to customers who only watch video content online, for three years after the deal closes.
The broadband service, AT&T promises, will continue to have speeds of at least 6 megabits per second, where feasible.
What if I'm an AT&T customer?
It's unclear, but it could improve. AT&T currently has a program called U-Verse — a bundled package of digital television, Internet and voice services. AT&T hasn't said if, or how, the merger would impact these customers.
But AT&T did note that DirecTV has some strong exclusive contracts including, as The Post's Cecilia Kang reported, NFL Sunday Ticket. AT&T has said its customers would gain access to that type of content as part of the merger.
Okay, but is this really going to be good for me?
As you might expect, AT&T and DirecTV say that the deal is good for consumers, because it would combine the resources of both companies to establish, in the words of AT&T Chairman and chief executive Randall Stephenson, a company that can bundle and broadcast "content to consumers across multiple screens – mobile devices, TVs, laptops, cars and even airplanes."
AT&T has also promised to use the merger to expand its high-speed broadband service across the country, mostly in rural areas. By picking up DirecTV, AT&T says, it should be able to offer more service to 15 million additional customers across the country, though it hasn't provided specifics on where those customers are.
So is there anything I should be worrying about here, as a consumer?
Consumer advocates are concerned about what this deal could do to your prices and competition in the cable market.
AT&T and DirecTV don't compete for television customers in most of the country — U-Verse only reaches about 25 percent of the country. But some consumer advocacy groups are concerned that AT&T could drop one of the services. Getting rid of any option for consumers could drive prices up, or trap customers into service that doesn't serve their needs because they simply don't have other services to run to.
In a statement, consumer advocacy group Public Knowledge said that it always views mergers with a skeptical eye, and that it's going to have to evaluate how such a deal affects the market.
"AT&T will need to explain how this merger wouldn't harm wireless competition, and how whatever new services it plans to offer by combining with DirecTV would offset any harms to wireless and video competition," said John Bergmayer, senior staff attorney for Public Knowledge.
I don't subscribe to either of these services. Any reason I should care?
As my Washington Post colleague Brian Fung has noted, if the AT&T-DirecTV merger is approved, it sets the stage for stronger competition with another proposed mega-deal in the telecommunications space — Comcast and Time Warner Cable.
He looked at the way an AT&T deal could affect that proposed merger last month, and noted:
A serious move by AT&T to pursue DirecTV ... would trigger a pretty complicated game of regulatory chess: The Federal Communications Commission and the Justice Department would probably need to determine whether or how an AT&T-DirecTV merger would affect a Comcast-TWC merger.
Were both mergers approved, each mega-firm would control around one-third of the U.S. pay-TV market, Fung reported, changing the landscape even further.