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Cord cutters might be the biggest losers in the AT&T-DirecTV merger

June 13th, 2014 at 9:05 AM
AT&T DirecTV Merger Cord Cutters

AT&T hasn’t exactly been overwhelming us with good reasons to support its merger with DirecTV so far. Unsurprisingly, its latest regulatory filing hasn’t really changed any of that — the company is still saying that merging with DirecTV will save it money by giving it more leverage in its negotiations with content but it’s not pledging that customers will reap the benefits of those savings in the form of lower prices. However, Re/code has spotted a detail in the filing in which AT&T hints that the DirecTV might be a good deal for people who want to buy bundled services and a bad deal for cord cutters who want to get their TV fix over the Internet.

Essentially, AT&T says in its filing that there might be some “upward pressure” on unbundled services such as standalone Internet or video services after its acquisition of DirecTV is complete. However, the company insists that this “upward pressure” will be more than offset by “downward pressure on the prices of bundles of AT&T broadband and DIRECTV video that will now be available at improved quality and attractive prices.” So from the sound of things, it seems like AT&T is dangling the prospect of lower bundle prices at the expense of higher standalone prices.

Re/code says that there is a possible alternative interpretation to this, which is that “[AT&T] will have incentive to sell standalone broadband at competitive prices, so that it could eventually upsell those customers into bundles that include video.” Of course, AT&T doesn’t explicitly say this anywhere in its filing and given what we know about how pay TV providers feel about cord cutters, it’s tough to imagine AT&T or any similar company doing something that would benefit people who prefer standalone Internet to bundles.




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