How AT&T and DirecTV Defend a $48B Merger

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June 24 (Bloomberg) -- AT&T is making its case before Congress today that its $48.5 billion takeover of satellite-TV provider DirecTV will lower prices. Bloomberg's Alex Sherman has more on “Taking Stock.” (Source: Bloomberg)

Approved, what does this really mean for consumers?

X it is good and bad and i will explain why.

If you are a wireless subscriber and you want direct tv.

Then you are going to pay less money for the bundle of services.

If that fits you then you will win out.

Over the long-term something will need to be done for the markets where at&t uverse and directv both exist.

At&t would own two forms of atv.

The company has not said how they will address this.

They will either to best the sub scrubbers or stop offering paid tv through uverse.

Long term, i doubt that pay tv costs are going to be drawn back here.

Even though this company is gaining scale.

In the end the sports programmers out there, the regional sports networks, they will still have all the leverage.

This is not a game changer in the sense you could expect your cable bill to go down if he barks.

You still need espn and you will still need to pay for espn.

Let's point out that the idea for this combination on the part of at&t is it will make them a better, stronger, more profitable company.

Do you get to be a stronger, bigger, more comfortable -- profitable company by charging less?

How does that square with what they do in the board room?

Rex this is a harder sell for at&t to its shareholders.

For her at tb this makes -- direct tv it make sense.

It is a huge problem so you come together with at&t and you can lower the subscriber acquisition costs.

It all makes sense for directv.

For at&t, i agree.

They will make a case where if they're not going to push costs onto consumers they need to make a strong case that people want the bundle.

What if they actually made the case that says things are going to get more expensive to my we are going to have more control over how that hype gets into your house, but we need to do it because you did not let us do the deal with t-mobile, deutsche telekom so please let us do the direct tv deal.

Regulators may look at this as megan said not on a standalone basis but in the world of other deals that are happening.

Like the potential t-mobile sprint deal.

Those are the three telecom deals.

Of the three this is the easiest regulatory cell.

You have got satellite and wireless.


If you were to look at it and say is this going to lead to more consolidation, are all these deals going to lead to more consolidation in the industry, will the content companies start to come together, so will we see mergers.

You have fewer companies controlling media access.

The cell that this is better for consumers might be difficult.

One of the big things for cable providers has always been we have invested a lot and we are waiting for this return.

This investment return.

They by nbc -- buy nbc.

If that is the case, have you heard shareholders say you might just give us the money.

Part of the problem is that, the starts to get into an issue.

That is a viable, logical thing.

At&t investors rely on the dividends which is getting their money back.

Buying direct tv in part goes a long way toward shoring up that dividend long-term.

It is the onions of dollars of free cash flow.

More than $2 billion a year.

Why not just buy back your own shares?

It is doing the same thing and you do not have to shell out $40.5 billion.

It is a valid argument and not one that i can defend.

You have to ask randall stephenson.

He believes in the long-term business of video.

Mobile video to consumers over

This text has been automatically generated. It may not be 100% accurate.


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