Last month, the FCC agreed to let AT&T finalize their $50 billion purchase of DirecTV. Since 2014, AT&T has going around the country trying to promote the benefits of the DirecTV deal.
We have heard all sorts of reasons to allow AT&T to purchase DirecTV. Things such as:
- AT&T told the federal government Tuesday that its proposed acquisition of DirecTV will give it the leverage it needs to cut spiraling program costs by 20 percent. – FierceWireless
- AT&T reiterated its April outlook for cost savings from the acquisition of at least $2.5 billion by 2018. That’s up from its $1.6 billion forecast at the time the deal was announced in June 2014. – AdAge
- But there is more than just savings from reducing costs in the deal. AT&T says there will be significant “revenue synergies” through bundling, video content to multiple screens, cross selling and advertising. – Multichannel
- These cost savings will help make AT&T more competitive on the TV front by removing many of the cost barriers associated with the set top box and HD/DVR fees that many consumers perceive as nickel and diming.– NPDGroupBlog
We even saw AT&T come out yesterday and admit that wireless costs were decreasing.
So, my question is very simple….when will customers see these savings? When exactly are these savings going to be put onto a customers bill? If AT&T is charging some of the highest amounts in the world for wireless/TV service and is now facing decreasing programming costs….decreasing wireless costs….one less major TV competitor…..doesn’t that mean massive savings for the consumer?
Judging by AT&T’s first move since the DirecTV was approved, AT&T hasn’t lowered prices whatsoever. AT&T simply put together more expensive bundles and slapped several small and temporary discounts onto a TV/Wireless plan.
As TVPredictions noted about AT&T’s first move:
But AT&T’s first move as DIRECTV’s owner is NOT to offer consumers a break. Instead, it’s doubling-down on the expensive bundle concept, demanding as much as $275 for a variety of services. Plus, the bundles require a two-year contract, another unpopular practice that forces the consumer to pay a penalty if he or she wants an early termination of the deal … The company first could have introduced a skinny pay TV plan, or a Net TV service that includes reduced rates such as Sling TV.
Obviously (and as many others have pointed out), AT&T has no plans to cut prices for consumers. AT&T repeatedly passed on the opportunity in front of Congress to put in writing that the merger would see consumers save money on their bills.
Much like I have done with past mergers, I am still left wondering why we continue allowing these record-size mergers without any substantive promises from the companies at issue. It is amazing that even as these mergers get universally mocked and ridiculed around the country, we still have politicians willing to simply sign off on the deal without a single consumer-friendly rule put in place.