Broadband

by Karl Bode


Filed Under:
broadband, cable, merger, price hikes, synergies, tv

Companies:
at&t, directv



AT&T, DirecTV Deliver 'Merger Synergies' By Raising Rates In Perfect Unison

from the synergistic-efficiencies dept

You'll recall that when AT&T was trying to justify its $69 billion acquisition of DirecTV, it rolled out all the usual claims about how the deal would have immeasurable benefits for consumers. Sure, the deal would technically eliminate jobs and a pay TV competitor from an already competitively-stunted market, but just think of the potential synergies! And as the two companies begin to fuse operationally, these amazing synergies have started to materialize -- in the form of new rate hikes imposed by both companies on exactly the same day.

Claiming the hikes are due to an "improved experience" for consumers, AT&T has notified its U-Verse TV subscribers that they can expect $2-$4 price hikes on all the company's TV packages, $2 price hikes on the company's voice services, as well as a notable bump in most of the company's sneaky, below-the-line fees -- used to jack up the advertised cost of service post-sale. That includes a bump in AT&T's "Regulatory Video Cost Recovery Charge" (which isn't government mandated and is entirely misleading) and its "Broadcast TV Surcharge" (which is just part of the overall cost of programming buried below the line).

DirecTV is simultaneously informing all customers of their own rate hikes on January 28, including a $2 to $8 bump in most TV packages. Users also get to enjoy a bump in DirecTV's monthly "TV fee," amusingly explained as such on the AT&T website:
"As technology becomes more advanced, monthly fees for receivers and Genie Minis allow us to provide the latest equipment with minimal upfront cost to the customer. The upgrade fees allow us to keep our monthly fees low. Many leased items require an upfront payment as well as monthly fees. Similar to leasing a car, a customer pays an amount upfront, and that amount allows the customer and the company to keep the monthly fee low."
Yeah, that's a company increasing a fee it claims exists to protect consumers from higher fees.

Note, of course, that AT&T repeatedly stated pre-merger how the merger with DirecTV would give them greater leverage with broadcasters than ever before, allowing them to negotiate lower rates for programming. Unmentioned, of course, was that those dramatic price reductions would be pocketed and not passed on to consumers. Amusingly, the only place the two companies are lowering rates is the cost of HBO, which they've had to drop from $19 to $15 thanks entirely to competition from HBO's standalone streaming video service, HBO Now. Hopefully there's more price disruption from where that came from.

AT&T was fortunate in that consumer ire toward Comcast's own bad deal allowed the AT&T DirecTV deal to fly under the radar. And since the FCC saw fit to approve the deal with largely meaningless conditions, the mega-merger (which the FCC claims somehow served the public interest) doesn't appear to provide any real benefits to consumers at all. And to think, we haven't even gotten to the point where AT&T begins to fire tens of thousands of employees to synergistically improve operational efficiencies!

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  • icon
    That One Guy (profile), 22 Dec 2015 @ 4:31am

    Stellar customer service

    I'm not sure where the sarcasm came from in the end there, this is absolutely helping out consumers.

    After all if the services were notably different, in price or offerings, think of all the time people would waste trying to decide between the two. With both increasing the prices however, there's no need to think at all, saving countless brain-cells from being put to the test. Whichever you chose, you get hosed, what's not consumer friendly about that?

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

  • identicon
    AJ, 22 Dec 2015 @ 6:40am

    As a chord cutter who has access to multiple ISP's, guess how many below-the-line fee's I pay?

    To be fair, my ISP has tried this type of bullshittery. We got a notice in the mail that they were bumping us up to a faster connection, free for 6 months, then our bill was going up $20 and we were to have data caps. I picked up the phone and told them I would have Earthlink at my house switching my service over before the end of the month. Next thing I know I'm talking to a "retention specialist" and I've got my faster connection, and my bill was going down by $5 a month. I almost canceled and went with Earthlink out of principal alone... but I gave them a second chance.

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

    • identicon
      Anonymous Coward, 22 Dec 2015 @ 9:45am

      Re:

      Amazing how competition, and not mergers and acquisitions, makes companies more consumer friendly and competitive on price and service. and to think that the government somehow thinks the opposite is true ...

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

      • identicon
        Anonymous Coward, 22 Dec 2015 @ 4:51pm

        Re: Re:

        Hey now, easy there, the corporate communications at the time of the merger guarantee that customers will be the first to benefit from the enhancements the merger provides. Customers *always* benefit from gigantic mergers. Now be a good sheep and go back to your corner.

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

  • identicon
    Glenn, 22 Dec 2015 @ 6:42am

    Ahhh, the synergies of reduced or eliminated competition!

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

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 7:08am

    They cut costs and increased profits. Sounds like a win-win situation. Except for their customers. Yeah, screw THOSE GUYS!

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

  • icon
    ThatDevilTech (profile), 22 Dec 2015 @ 7:15am

    Thank you Kodi

    We haven't had Dish in probably 3 years now. Thanks to XBMC/Kodi for us and Netflix for the kids, we haven't missed it at all. And I can still get all the sports I might want to watch. I can watch almost any movie ever made and almost every episode of every major TV show then and now. Dish who? And without torrenting. It's all HTTP traffic, so what does the ISP know? Pay about $60/month for 25Mbps cable. Typically get 15-20 even on a bad night. Some nights are worse, but overall it's a good setup.

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

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 7:18am

    So long DirecTv

    I have been a DirecTv customer since before AT&T took over. Didn't really have any issues with them before. This is precisely the type of BS I expected to see from the acquisition, and will cause the end of my service with DirecTv. Heck, AT&T doesn't even cover my part of the world (New Hampshire, primarily ceded over to TimeWarner) with internet service so there was never any hope of a benefit for me, things could only get worse, and here they are. See ya.

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

    • icon
      PRMan (profile), 22 Dec 2015 @ 10:24am

      Re: So long DirecTv

      I canceled DirecTV the instant the merger was approved by the FCC. I switched to Dish for now, but my Dad is moving out so I will be a cord-cutter very soon.

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

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 7:36am

    It is called collusion, and before the days of corporate government it was frowned upon.

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

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 7:40am

    They are trying to become more like Comcast.

    Probably what AT&T is after, is their content management. DirectTV does not have a lot of infrastructure as far as telecoms go. It is all sat based, and their installers pretty much all contractors.

    So there isn't much there in terms of the DirecTV itself except for the content management. Really it should be going the other way. Comcast should be broken up, and their content management spun off into a separate company.

    After an AT&T merger, the very next move is to start isolating their network services and creating walled gardens like Comcast. The American people want less interference with their 4th and 1st amendment rights by the private sector, not more.

    If you vote for HRC, they will get away with this shit. They are the ones who gave her "the force" after all.

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

    • identicon
      Frylock, 22 Dec 2015 @ 9:08am

      Re: They are trying to become more like Comcast.

      I'm curious. Which presidential candidate do you think will do something about this? And how?

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

      • identicon
        Anonymous Coward, 22 Dec 2015 @ 9:51am

        Re: Re: They are trying to become more like Comcast.

        Easy.

        Trump. By causing WW III. In the mass destruction that follows, DirectTV will be destroyed.

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

      • identicon
        Anonymous Coward, 27 Dec 2015 @ 9:42am

        Re: Re: They are trying to become more like Comcast.

        "Which presidential candidate"

        There is only one who has criticized consumer surveillance. And he is the same one talking about breaking up the banks. And there is precedent for breaking up telecoms. Not that it is likely to happen, but it is the only option for moving in the right direction.

        Glass Steagall Separated banks from insurers to prevent frauds like the one that crashed the world economy in 2008. The same approach can be taken with telecoms. The content providers, need to be separated from the carriers. Period.

        Either that or call them agencies of state, (which is what they are at this point) and make them liable to litigation under constitutional law, instead of protecting from it by calling them "witnesses". You can't have your cake and eat it too when it comes to the 4th.

        Overturn Citizens United. Reinstate Glass Steagall. Bust the Trusts. Amend the dictionary act.

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

  • icon
    Violynne (profile), 22 Dec 2015 @ 7:46am

    On the 12 days of Christmas, AT&T gave to me,
    12 hours of ads
    11 useless stations
    10 days of outages
    9 service calls
    8 of them canceled
    7 different service agents
    6 different techs
    5 different issues
    4 wrong invoices
    3 separate charges for the same signal
    2 bogus charges
    and another fucking horr-ible year.

    Merry Christmas, AT&T.

    PS: Tiny Tim doesn't live because he couldn't afford both an internet connection and health care.

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

  • identicon
    Kitiago, 22 Dec 2015 @ 8:17am

    "Regulatory Video Cost Recovery Charge"

    How brazen. They could have saved a few more pennies by calling it by its real name - the "Pure Profit Charge".

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

  • identicon
    Joey, 22 Dec 2015 @ 8:33am

    Rebates

    This is true. However the article does not mention the $200-$300 in bill credit rebates AT&T has offered some customers for signing up.

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

    • identicon
      Anonymous Coward, 22 Dec 2015 @ 9:12am

      Re: Rebates

      SHILL!!!

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

    • identicon
      Anonymous Coward, 22 Dec 2015 @ 10:08am

      Re: Rebates

      Your post sounds like an advertisement.

      AT&T is not offering this trade in credit due to the mergers or due to being so benevolent. They are offering it as a business decision to attract more customers and to be competitive (ie: Verizon is giving a $200 max credit) with other cell phone carriers, which is a different subject here anyways.

      http://slickdeals.net/f/7194048-att-offering-300-credit-for-old-iphone

      and that post is dated Oct 1, 2014

      Instead of changing the subject by advertising some irrelevant 'great deal' the company is offering why not address the subject of price increases due to mergers. Mergers = increasing prices. Advertisements of 'great deals' only makes you look like you are a marketer trying to use this to advertise your commercial. As if we don't get enough commercials without you here.

      and in case you are referring to some kinda television offering I can't seem to find it on Google so the number of customers being offered this rebate must be very low. I imagine that's because it's only taking place in the very few places that actually have more competition. and you mention this is only for customers signing up, ie: new customers. IOW existing long term faithful good customers get nothing, which is very typical of the cable/broadband industry (they treat their existing customers like trash). This offering is either to attract customers that would otherwise do without cable (those customers may sign up to another plan by another company if there was better competition and lower prices or they may choose AT&T if competition forced AT&T to offer lower prices) because AT&T has no choice but to offer them something to attract them or to attract customers that have another provider (ie: it's due to the existence of competition).

      but I suspect that what you are referring to is the irrelevant link above because that credit is/was a $200 - $300 credit as you mention. You probably read about it in 2014 and are now just trying to refer to it and you got mixed up thinking it was in relation to television because you are too lazy to actually re-Google it before posting about it.

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

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 9:14am

    Yet another corporation peeing on our legs and telling us it's raining.

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

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 9:36am

    Symptom #1

    If you wonder what's wrong with corporatism, look no further

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

  • identicon
    Anonymous Coward, 22 Dec 2015 @ 11:40am

    Collusion?

    ... or not... just because it's not 'secret'

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

  • identicon
    Boy Cott, 23 Dec 2015 @ 9:50am

    Boycott the Companies

    BOYCOTT THE COMPANIES

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


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