Broadband

by Karl Bode


Filed Under:
deals, mergers, net neutrality

Companies:
at&t, directv



AT&T Might Agree To Adhere To Neutrality Rules To Seal Its $49 Billion DirecTV Purchase, But Probably Not

from the believe-it-when-you-see-it dept

There's not a company around that hates the FCC's net neutrality rules more than AT&T, as its two lawsuits against them attest. There's a pretty obvious reason: AT&T's been at the bleeding edge of obnoxious, neutrality-trampling network pricing models for a decade, and obviously doesn't want the government interfering in these ambitions. But at the same time, the telco wants regulators to sign off on its $49 billion acquisition of DirecTV (including the exclusive out of market broadcast rights of NFL Sunday Ticket). As such, the Washington Post claims AT&T is telling regulators it will agree to net neutrality to get the deal approved:
"Among the deal's so-called conditions is expected to be something fairly simple. AT&T is prepared to accept aspects of the net neutrality rules adopted by the Federal Communications Commission earlier this year, according to people familiar with the negotiations, who declined to be named because the deliberations are private."
Can you spot the one word in that paragraph that should cause reservations as to AT&T's sincerity? ISPs have long stated they're fine with some "aspects" of the FCC's net neutrality plan, most notably the no blocking or service throttling provisions -- since they've never really had an interest in that. There's no money in it, and it's a PR minefield. They're focused on notably more clever and less obvious abuses of net neutrality, including usage caps, interconnection, and zero-rated apps, where users and companies can be nickel-and-dimed under the pretense of ordinary business behavior.

And indeed, as the Post moves on to talk about interconnection issues, you'll note AT&T's enthusiasm for cooperation wanes notably:
"Critics of the DirecTV acquisition have asked that, as part of the deal, the FCC require AT&T to route incoming content to consumers without levying a fee on the companies sending the traffic. In reply, AT&T has said that its recent deals with content delivery firms such as Level 3 show that the current system of privately negotiated contracts is working properly."
Of course, the only reason AT&T struck a deal with Level 3 is because it was worried about running afoul of the FCC's net neutrality rules, which actually suggests it's the FCC's neutrality rules (in fact the mere threat of them) that's working properly. AT&T doesn't want the FCC policing caps either; we recently noted it's also trying to argue that any merger conditions that prevent it from abusing usage caps will somehow hurt fixed-line broadband competition, despite the fact AT&T's only using usage caps in markets with less competition in the first place.

So while the Post headline proudly proclaims claims that AT&T's eager to adhere to net neutrality rules to get the deal done, the reality is there's absolutely no indication the telco intends to adhere to any of the parts of the net neutrality rules that actually matter. Most reports suggest regulators will be signing off on the deal all the same, potentially seeing a $49 billion acquisition of a satellite company in the age of cord cutting as telecom seppuku anyway. Still, it's kind of amazing how the outrage over the Comcast deal helped AT&T's deal fly under the radar, despite the fact that the elimination of a direct pay TV competitor likely won't do the pay TV market or consumers any favors.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Anonymous Coward, 4 Jun 2015 @ 8:25am

    Why can't the federal agency just say that the approval is contingent on following the rules, and write in a fine of, say, $20bn if just one of those things isn't met, payable immediately?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Jun 2015 @ 8:35am

    Why let AT&T gain yet another reason to throttle and play loose with interconnection deals to preserve a dying model, that of scheduled content delivery?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Jun 2015 @ 9:22am

    Among the deal's so-called conditions...

    I don't think they are taking the conditions seriously.

    reply to this | link to this | view in chronology ]

  • icon
    Lord_Unseen (profile), 4 Jun 2015 @ 9:25am

    A bit confused.

    So what I'm wondering.

    AT&T says it'll follow Net Neutrality rules if it gets approval for the DirecTV deal. I wonder if that means they're worried about their lawsuits failing? Wouldn't it be smarter for the regulators to flat out deny the DirecTV deal AND tell them "tough shit, follow the rules anyway." I mean, the rules apply to them whether they agree to them or not, right?

    reply to this | link to this | view in chronology ]

    • icon
      Karl Bode (profile), 4 Jun 2015 @ 9:31am

      Re: A bit confused.

      Knowing AT&T really really well, they're trying to sell the FCC on a flimsy condition saying that they'll agree to PART of the neutrality rules, most notably the ones they had no intent of violating (direct blocking of content). My guess is the Post heard this and misinterpreted it to be a broader offer than it actually is.

      FCC could deny the deal, but I really do think this is one deal they'll let go through because acquiring a satellite TV company just as Internet video arrives is kind of idiotic long view...Wall Street has no idea what AT&T's really thinking here (outside of getting the NFL deal and reducing short term competition)>

      reply to this | link to this | view in chronology ]

    • identicon
      trueCarpentry, 9 Jun 2015 @ 1:00am

      Re: A bit confused.

      No, the rules do not apply to them. You have to see this url, then understand the dilema on the whole issue that they are not telling you about. I speak about the communism in the system of the nazis, that shut you down anyway. They can play net games all they want, but what happens in the Nazi world is complete differ, and you can believe these bastards of Google and At&t are the same. So, lets see, your all on the same speed, and the firewalls are still blacklisting you more and more, so that nothing works anyway. Do not think Putin is not in this, he is, and he is also a murderer the same as GW Bush is with his laser weapons. If they can scare the shit out of you, they beleive you will keep you mouth shut. Think about it, 911 came, and AT&T was no where to be found. They sold that wireless network out from under themselves, so the 911 would not stick to them. 5 years later, after 911, they came back sneaking in the scene and picking it back up. They have as much blood on their hands, as GW BUSH does. And that is a wopping whole bunch, in the 100 thousands of people dead now. Do you really think, they would let some tiny pile of distraction shit like this, bother them or their customers? Make sure you click the Nazis Communist List on this url page. Then you will get just a small portion of how many of these bastards are out there, blocking any random Ip numerals from transporting net signals, including email.. And no, they have no rights to be doing so, and it is against the US Constitution greatly. And you can believe, we are nailing their ass for it. We dont give a dam what Obama says.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Jun 2015 @ 10:08am

    The rules are the rules. You can't just say "I'll comply with the law only if you give me this other thing I want." In what other context would this position not be completely laughable?

    reply to this | link to this | view in chronology ]

  • identicon
    Yes I know I'm commenting anonymously, 4 Jun 2015 @ 10:48am

    I was going to ask what the betting was on how long their compliance would last but it seems they wont even start..

    reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 4 Jun 2015 @ 11:17am

    How about Zero Rated electric appliances

    It sounds so good. It could even be confused for green.

    This fantastic idea works like this.

    Your electric utility strikes a deal with a major appliance manufacturer, say ElectroWhiz. ElectroWhiz pays your utility a fee in order for all ElectroWhiz appliances to be zero-rated.

    You benefit from your appliances being zero rated because they no longer count against your electricity monthly usage cap. Even better, certain high consumption appliances such as ElectroWhiz clothes dryers, and ElectroWhiz kitchen ranges do not cause your home to get throttled by your electric utility.

    You should be happy because you then do not have to move to a higher priced electricity plan that has a higher killowatt-hour per month usage cap.

    What could possibly be bad* about this?

    * please ignore the ever increasing hidden cost of your appliances

    reply to this | link to this | view in chronology ]

    • icon
      DannyB (profile), 4 Jun 2015 @ 11:18am

      Re: How about Zero Rated electric appliances

      City water utilities, please take note. You could start a program for zero-rated plumbing fixtures and lawn sprinklers.

      Natural gas suppliers, take note. AT&T is paving the way to the future here.

      reply to this | link to this | view in chronology ]

    • identicon
      Andrew D. Todd, 4 Jun 2015 @ 1:46pm

      How the Electric Company and Municipal Water Board Charge. (DannyB, #10 & #11)

      Energy is not information, and information is not energy. Beware false analogies.

      Kitchen stoves and clothes dryers don't use very much energy, because they don't run continuously, the way air conditioners do. Air conditioning, space-heating, and hot water heating are the big domestic energy uses. What the electric company actually wants you to do is to get a geothermal heat pump for about five thousand dollars. A geothermal heat pump stores heat energy in the earth, and is thereby able to balance out the fluctuations of air-conditioning and heating load which result from daily and seasonal temperature fluctuations. Expensive peak load is typically made of air-conditioning. A solar water heater is also a good idea. At fixed electric prices, a geothermal heat pump might pay for itself in five or ten years. Where the electric utilities have succeeded in adopting peak/off-peak pricing (mostly in Southern California), the payback period is more like a year. I don't know whether peak/off-peak pricing is a very good way of getting people to install geothermal heat pumps. In places like Death Valley, air-conditioning is life, the same way that water is life. If you play games with pricing, you risk killing someone. It makes much more sense for the electric utility to just go out and install geothermal heat pumps, and charge rent for them, if the homeowners don't want to buy them outright. Or, better still, charge by results, so much per BTU of heating or cooling.

      By analogy, it would be as if AT&T really wanted you to install a Digital Video Recorder, and save shows when they were broadcast at three in the morning, and gradually build up a private video library of a thousand hours. Such a DVR doesn't need to cost more than a hundred dollars, and I doubt it would be a big deal, but that is not what AT&T wants. AT&T wants everyone to watch one show, the way they did back in the 1950's, a show produced by an AT&T affiliate, and to all watch it at the same time, and not skip the commercials, so that AT&T can collect big bucks for advertising.

      When the electric power company gets dollar signs in its eyes, it usually has to do with automobiles. Various California electricity companies are doing all kinds of favors for Tesla, in the hope that Tesla will eventually take off. They are buying overpriced home battery packs, for example. There is a daily peak load for transportation (which it may or may not be possible to mitigate by off-peak charging), but there isn't an annual peak load, the way there is at the end of July (the "dog days") for air conditioning.

      Now, the gas company occasionally gets the idea that you don't need electricity, because you can have your own gas-powered generator. This hasn't gone very far-- on the contrary, the drift is in the opposite direction, with a steady decline in the numbers of gas-powered appliances, and a transition to electric appliances. In cooking, for example, the trend is towards microwave ovens.

      Water, of course, is usually municipal, not commercial. On my water bill, there is a charge for paved area, because paved area produces run-off in storms, and that results in a need for storm sewers. When you are in an area such as mine, where five and ten percent grades are common, the potential for flash-floods is sort of dramatic. Waves of water can just sheet across a parking lot or a street, forming ponds anything up to a foot deep. Now, of course, the city tends to own as much paved area as anyone else does, in the form of streets.

      AT&T's problem is a bit more insidious. They don't seem to be able to come up with legitimate reasons for spending money.

      reply to this | link to this | view in chronology ]

    • icon
      tqk (profile), 4 Jun 2015 @ 2:31pm

      Re: How about Zero Rated electric appliances

      * please ignore the ever increasing hidden cost of your appliances

      Yes, and too bad you won't be able to afford to wash your clothes next year when your washing machine mfgr can't make an affordable deal with your electrical utility. Stop crying you big baby! Lots of people in the world wash their clothes in the nearest river.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Jun 2015 @ 3:28pm

    Whether AT&T or DirectTV follows the rules does not matter as this potential merger should be denied because it would create a monopoly, plain and simple. Corporations should not be given "rewards" for following the rules.

    reply to this | link to this | view in chronology ]

  • icon
    Coyne Tibbets (profile), 4 Jun 2015 @ 4:04pm

    Of course they would make this promise. They would suck FCC's *ahem* if they could figure out where it was...and then totally have no respect for them next morning.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 4 Jun 2015 @ 5:45pm

    The only guilty parties here are the consumers who keep sending AT&T their hard earned money every month.

    reply to this | link to this | view in chronology ]

  • identicon
    DigDug, 4 Jun 2015 @ 5:59pm

    How do we fix this?

    Ah yes, I know.

    Make it part of any bid to take over any company that has a role in the internet infrastructure, local or foreign, that any charges relating to "overages" will result in a 10 billion dollar fine, payable to the person they overcharged, and AT&T pays the taxes on that.

    This would apply to Cellular service as well, meaning that all cell contracts would become unlimited, with no dumb-ass asterisks or redefinitions allowed, ever again.

    Oh and the rate for all Unlimited Cellular service? 10 bucks per phone, including all taxes, fees and whatnot, including phone rental.

    Now, if AT&T or Verizon want to try any takeovers, these are the new terms to get the takeovers approved.

    And if AT&T or Verizon doesn't comply with the new rules, even once, it's the death penalty to the senior officers and board members of the company.

    Corporations want to put money over life, then fine, we'll deal with them the same way.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Insider Shop - Show Your Support!

Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories

Close

Email This

This feature is only available to registered users. Register or sign in to use it.