AT&T has just given us the best reason yet to support its merger with DirecTV, and frankly it’s not all that great. Per Re/code, AT&T said in a regulatory filing this week that one reason to support its proposed DirecTV merger would be that AT&T would gain added leverage in negotiations with content providers to lower the prices that they charge for the rights to broadcast their shows.
Does this mean that AT&T is going to lower its pay TV subscription prices and actually try to compete with hated incumbent cable companies such as Comcast and Time Warner Cable? No, don’t be silly — as Re/code points out, AT&T has no intention of passing its savings on to customers and will instead use them to pay for “new broadband offerings it is going to sell to rural residents — a measure that’s supposed to make the merger more palatable to regulators.”
While it’s good that AT&T is going to be spending more money on rural broadband infrastructure as a condition of getting its merger with DirecTV approved, it would also be nice to see some kind of competitive pricing scheme for services whose costs have grown at more than triple the rate of inflation in recent years.