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FCC close to approving AT&T's DirecTV merger

FCC close to approving AT&T's DirecTV merger

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AT&T is one step closer to successfully taking over DirecTV. Citing anonymous sources, The Wall Street Journal reported earlier today that FCC chair Tom Wheeler was preparing to circulate a proposal to approve a merger between the two companies, setting the stage for a vote. Executives from both companies met with the agency last month to discuss the terms of the deal, and it's widely expected to pass both FCC and Justice Department review without trouble. There's no word, however, on exactly when the approval might come.

Wheeler issued a statement shortly after the report came to light, in which he confirmed that an order recommending that the merger be approved had been circulated to FCC commissioners. "The proposed order outlines a number of conditions that will directly benefit consumers by bringing more competition to the broadband marketplace," Wheeler wrote. The FCC head said the deal would be in consumer interest, bringing faster, better fiber internet to a huge number of new locations. "If the conditions are approved by my colleagues, 12.5 million customer locations will have access to a competitive high-speed fiber connection. This additional build-out is about 10 times the size of AT&T's current fiber-to-the-premise deployment, increases the entire nation's residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve."

FCC head Tom Wheeler said the deal brings more competition to the marketplace

The statement also addressed the matter of net neutrality and the conditions of the deal designed to enshrine the principles laid out by the FCC earlier this year. "The conditions will build on the Open Internet Order already in effect, addressing two merger-specific issues. First, in order to prevent discrimination against online video competition, AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections. Second, in order to bring greater transparency to interconnection practices, the company will be required to submit all completed interconnection agreements to the Commission, along with regular reports on network performance."

AT&T announced its intent to acquire DirecTV for $48.5 billion in May of last year. The plan would give AT&T access to millions of television subscribers and allow DirecTV to expand beyond satellite TV. It's also been less controversial than some other recent mergers — the two companies, for example, compete less directly with each other than internet providers like Time Warner Cable and Comcast. Besides the date of approval, we still don't know what terms the two companies will have to meet as conditions of the merger. It's rumored that AT&T has agreed to follow net neutrality principles for a set period of years, even as it fights the FCC's rules on the subject, but regulators supposedly want to avoid other "onerous" conditions.

Update July 21st, 6:30PM: Updated with statement from Tom Wheeler.