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In this week's telecom news, AT&T finalized its deal to buy DirecTV LLC for $48.5 billion after getting approval from the FCC, making AT&T the country's largest television distributor. FCC chairman Tom Wheeler also proposed that the Commission consider adding cellular data to its U.S. broadband annual review.
The European Commission approved Nokia Corp.'s April acquisition of Alcatel-Lucent SA, which will increase competition in several networking markets -- particularly mobile.
FCC approves AT&T-DirecTV deal
The Federal Communications Commission (FCC) approved AT&T's $48.5 billion deal to acquire satellite provider DirecTV, one year after AT&T asked for government approval. The acquisition makes AT&T the largest pay-TV provider in the U.S., with its 26 million subscribers.
The FCC's approval came with several conditions to ensure the deal wouldn't limit competition in the market. AT&T must expand its high-speed, fiber optic broadband Internet service to reach 12.5 million locations -- including schools and libraries -- which is about 10 times its current size, The New York Times reported. The FCC said the service expansion addresses monopoly concerns in markets where AT&T and DirecTV previously competed, according to the Times.
The FCC is also requiring AT&T to offer broadband services to low-income customers at discount rates. The conditions of the deal serve the FCC's goal of improving broadband in the U.S, the Los Angeles Times said.
AT&T's deal comes during a time of great merger activity for media. Charter Communications Inc.'s proposed acquisition of both Time Warner Cable Enterprises LLC and Bright House Networks LLC totals $67.1 billion. And in April, Verizon closed a $4.4 billion deal to buy AOL Inc.
The FCC's approval for AT&T and DirecTV gave some industry observers hope for getting regulatory approval for future acquisitions, especially following last year's collapse of Comcast's proposed $45 billion deal to buy Time Warner Cable, the Times said.
FCC to consider adding cellular data to high-speed Internet review
The FCC is considering whether it will extend minimum broadband speed requirements to wireless providers, as well as fixed-line providers. FCC Chairman Tom Wheeler circulated a proposal among the commissioners that could, if approved, include cellular carriers in its annual U.S. broadband market review, according to The Washington Post.
The FCC's annual broadband review is designed to show whether services are adequately deployed in the U.S. The FCC in January raised the minimum speed for broadband from 4 Mbps to 25 Mbps to help meet users' bandwidth needs; the change only included fixed-line providers. If the FCC decides to look into the wireless broadband issue, it would have more leverage to urge wireless providers to upgrade their networks, the Post said. An inquiry could also result in having the FCC set a minimum speed for mobile broadband, the article said.
EU approves Nokia's Alcatel-Lucent acquisition
The European Commission approved Nokia OYJ's $16.6 billion bid to acquire Alcatel-Lucent SA, which will make Nokia the largest vendor of mobile phone networks. Nokia's competitors in the mobile equipment market include Ericsson AB, Huawei Technologies Co., Samsung Electronics Co. and ZTE Corp., Bloomberg Business reported.
According to Bloomberg, the European Union's Commission, which looks at proposed mergers, predicted a growing rivalry between Nokia and Samsung, saying it expects Samsung to play a future role in both 4G wireless equipment and 5G.
According to Bloomberg, the combined company will take on contracts with Verizon and AT&T, the two largest U.S. carriers.
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