Broadband

by Karl Bode


Filed Under:
directv, prices, streaming video, synergies

Companies:
at&t, directv



Fresh Off Its Merger, AT&T Jacks Up Price Of Streaming Video Service

from the history-repeats-itself dept

It didn't take long for AT&T's promises of merger synergies to magically evaporate. During the company's sales pitch for its $86 billion acquisition of Time Warner, AT&T repeatedly stated how the merger would result in all manner of "synergies" and savings that would be passed on to the consumer. In reality, the massive debt load acquired in the wake of the deal has AT&T doing everything in its power to try and trim its M&A-bloated balance sheet... to the immediate detriment of the company's customers.

Last week we noted how AT&T had begun flexing its muscles in the wake of a Judge's comically-myopic ruling in the Time Warner case. First, AT&T raised the price of some of its "unlimited" data plans, then axed a deal that provided HBO for free to some wireless customers. Then the company set to work raising a misleading, nonsensical and unnecessary "administrative fee" from $0.76 to $1.99, effectively providing AT&T with roughly $800 million in additional revenue every year. Such garbage fees are routinely used to help broadband providers falsely advertise a lower rate.

Not to be outdone, AT&T is also now informing the company's DirecTV Now streaming video customers that they can look forward to a new $5 price hike starting in August. The hike is necessary, AT&T claims, in order to bring "the cost of this service in line with the market":

"In the 18 months since our launch, we have continued to evolve our DIRECTV NOW products to serve this new customer set and compare favorably with our competitors. To continue delivering the best possible streaming experience for both new and existing customers, we’re bringing the cost of this service in line with the market—which starts at a $40 price point."

You're to forget, apparently, that one of AT&T's core selling points during the merger approval process was that owning "must have" content like HBO was going to make it easier for AT&T to provide users cheaper, better TV service. From an AT&T brief (pdf) filed at the tail end of arguments during company's recent merger skirmish with the DOJ:

"The evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated 'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] companies."

Yeah, or, you know, not. AT&T also forgot, apparently, that the whole reason users cut the cord and head to streaming services in the first place is because they're tired of often bi-annual rate hikes on traditional TV service (Dish Network's Sling TV is also issuing a $5 price hike to its own Sling TV service in perfect symmetry).

Again, none of this is new. Time and time again, Americans are promised a world of synergies and savings that can only be provided if already-massive companies are allowed to grow even larger without much oversight. And time and time again, we quickly learn that the lion's share of those promises are horse shit. We then fail utterly to actually learn anything from the experience. Meanwhile, with net neutrality on the chopping block, you can be damn sure that sneaky fees and vanilla price hikes are going to be the least of our problems in the face of a reconstituted Ma Bell.


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  • identicon
    Anonymous Coward, 3 Jul 2018 @ 6:27am

    Of the People, by the People, For the People my anal sphincter.

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

  • identicon
    Anonymous Coward, 3 Jul 2018 @ 6:28am

    FAANG

    Is that chosen in honor of the way those companies are sucking the money out of cable TV subscriptions?

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

  • icon
    Lord Lidl of Cheem (profile), 3 Jul 2018 @ 6:36am

    'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] - these guys should have been put in charge of naming Trumps Free And Reciprocal Trade act =)

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

    • icon
      Jeremy Lyman (profile), 3 Jul 2018 @ 7:00am

      Re:

      Does Facebook stream? I don't pay them much attention, but I wasn't under the impression they had an a la carte or subscription streaming media consumption model. Or are they just included because they're a big tech company AT&T thinks is taking their ad money?

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

      • icon
        PaulT (profile), 3 Jul 2018 @ 8:00am

        Re: Re:

        Little from column A, little from column B, I presume. It depends on what you term "media". Movies and TV show? Not so much. But, Facebook certainly do stream video and a lot of people use their live streaming service, as well as streaming whatever video comes up in their feed.

        Basically, if someone's watching a live feed of a festival or some silly meme their friend shared, they're not watching whatever streaming product AT&T are trying to push, and are therefore a threat.

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

    • identicon
      Anonymous Coward, 3 Jul 2018 @ 7:03am

      Re:

      I'm convinced they called it that on purpose.

      They could have easily called it the Reciprocal and Free Trade Act (RAFT) and it would have sounded thousands of times better.

      But Trump is a child and children love fart jokes.

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

  • icon
    That Anonymous Coward (profile), 3 Jul 2018 @ 6:36am

    Tis a pity the courts have such short memories & the DoJ didn't have the ability to show documentation of the last 300 times they said A but then reversed course once they won.

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

  • identicon
    I.T. Guy, 3 Jul 2018 @ 6:45am

    Sure... I'll call you afterward. I promise.

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

  • identicon
    Anonymous Coward, 3 Jul 2018 @ 6:57am

    did anyone honestly expect anything different? we all know that Pai is nothing but an industries worker in the FCC hat, ably followed by the idiot politicians who backed the net neutrality repeal. how the hell Pai will avoid jail when this issue gets to court, i dont know.

    i just read as well where Comcast is starting to throttle mobile video and will charge extra for HD streams. another example of what was intended as soon as Pai demolished net neutrality!

    am waiting to see what is done about stopping these practices and which organisation is going to be doing it!

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

    • This comment has been flagged by the community. Click here to show it
      identicon
      Anonymous Coward, 3 Jul 2018 @ 7:05am

      Re:

      "followed by the idiot politicians who backed the net neutrality repeal."

      This is the problem right here. People like you treating the politicians like they are idiots. They are not idiots in the least, they just know how to get you to believe they are so you will for the most part let them do it and to give them an excuse to claim ignorance.

      You are being played... by both sides because you are the stupid one. The politicians have more than enough research and support groups to tell them exactly what is going on. Their only job is to sell you a line and get re-elected.

      "how the hell Pai will avoid jail when this issue gets to court, i dont know."

      How about you recommend jail time for folks you agree with politically first? Don't want to do that? Then that is the explanation. The R's are going to defend theirs and turn a blind eye just as much as the D's. Why in the world you think that things should have a different set of rules just because you don't like it when they hurt you is pretty telling.

      Like the other TD article earlier..."NY Times, Winner Of A Key 1st Amendment Case, Suddenly Seems Upset That 1st Amendment Protects Conservatives Too"

      you seem pretty upset that the same BS rules your side plays with are okay until they can also be used by your opponents.

      The politicians on both sides are brighter than you. Accept that and understand what that means!

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

  • identicon
    Anonymous Coward, 3 Jul 2018 @ 7:04am

    you seem confused

    Karl it seems you're confused about what 'synergy' means.
    (in context AT&T has probably copyrighted the definition that they used, and it's only available under NDA, so I can't tell you here, sorry.)

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

    • icon
      JoeCool (profile), 3 Jul 2018 @ 7:56am

      Re: you seem confused

      Karl it seems you're confused about what 'synergy' means.

      Wasn't he the bad guy in the first "Incredibles" movie?

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

    • icon
      Gary (profile), 3 Jul 2018 @ 8:01am

      Re: you seem confused

      In this context Synergy means:
      Slash the number of workers
      Raise executive pay
      Raise rates

      Those are all good things, if you are an executive. It's dishonest, but not stupid. And since synergy means two things working better together, everything *is* better for the shareholders.

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

  • identicon
    drummer315, 3 Jul 2018 @ 8:55am

    ATT has YOU paying

    As usual, we have another mega merger that reduces competition, increases costs and the the price of the acquisition is being passed along to the consumers. Anyone remember a law on the books that has almost never been enforced since Reagan, the "Sherman Anti-Trust Act?"

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

  • identicon
    BreakEmUp, 3 Jul 2018 @ 9:23am

    Antitrust vs Market Harm eg ShortTerm vs LongTerm

    Boycott, stop service with AT&T if they're doing something that you feel shouldn't happen - that's how the 'free market' works, right? /s

    I'm on this crappy DSL service because I refuse to give Comcast my money and chose the lesser of two evils that provide my internet.

    Oh wait, I have a 'choice' between truly awful and just crappy. /s

    From my world view, we need a new law, something on the level of AntiTrust but focused on mergers and acquisitions including vertical market growth.

    Antitrust focuses on consumer harm.

    We need something that focuses on Market Harm that would have prevented AT&T from becoming so large, or Comcast or Verizon or Amazon or Facebook or ... list too large to write up here.

    I see the difference as Consumer harm being immediate and recognizable.

    I see Market Harm (new antitrust) as understanding what happens 10 years down the road when mergers and acquisitions stifle innovation, startups, new competitors from entering or even creating new markets... We're in the Market Harm era...

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

    • identicon
      Anonymous Coward, 3 Jul 2018 @ 10:12am

      Re: Antitrust vs Market Harm eg ShortTerm vs LongTerm

      When these corporations can get laws and regulation that try to prevent customer harm removed, just how do you propose to get what you suggest passed into law?

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

      • identicon
        Vote!, 3 Jul 2018 @ 10:41am

        Re: Re: Antitrust vs Market Harm eg ShortTerm vs LongTerm

        > When these corporations can get laws and regulation that try to prevent customer harm removed, |

        Corporations already wrote or heavily supported deregulation or laws that put themselves at the advantage, it's not about the future, they've already done it. Now is the time to correct what these monied interests have done.


        > just how do you propose to get what you suggest passed into law? |

        Vote, it's always been about the vote, always will be about the vote in a democracy.

        I realize how naive this sounds, but consider roughly 60 million people vote in a presidential election out of how that can vote? How many sit on their arses and complain and yet refuse to participate in the one thing that can change government action?

        Look at the democratic members getting booted from office by fresh faces. If people want change, voting is how it happens.

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

  • identicon
    David, 3 Jul 2018 @ 12:48pm

    There are no "synergies" between country-sized players

    They cross-license their networks at zero net cost anyway. Service personnel is already scaled proportionate to the customer base. Unifying the service centers will not change the service personnel available per customer but will make it less likely that an assigned contact is actually familiar with the customer's problem.

    The only way to actually save money is by reducing the number of employees per customer, resulting in worse service. And by jacking up prices in order to exploit having gotten rid of competition.

    Having only one CEO instead of two to pay off would appear to help with costs, but those are paid proportional to company size, so the ongoing cost is the same and you have to pay the golden parachutes of whoever volunteers to leave in addition.

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

  • identicon
    slightkc, 3 Jul 2018 @ 3:50pm

    We?

    We then fail utterly to actually learn anything from the experience.

    Who is this "we" you speak of? I learned the lesson decades ago when Reagan and Repubs began "deregulating" everything in sight!

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

  • identicon
    Anonymous Coward, 4 Jul 2018 @ 2:19pm

    PS Vue

    FWIW, PS Vue is going up $5 too

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


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