AT&T/DirecTV, Comcast/TWC deals impacted by confidentiality review
AT&T’s attempt to acquire DirecTV hit yet another snag as the Federal Communications Commission late last week stopped its review process due to a pending review of confidentially agreements.
The latest delay comes as the FCC said it is waiting for a court decision on merits of a petition for review linked to a decision late last year in regard to parties involved in the proceedings having access to confidential information, including information tied to video programming agreements. A concurrent review of Comcast’s attempt to acquire fellow cable television provider Time Warne Cable was also stopped.
“At this time, we believe it is prudent to pause the informal 180-day transaction clocks because the commission would be advantaged by knowing the resolution of the pending petition for review before the transaction clocks reach the 180-day mark, which both are slated to do by the end of March,” the FCC noted in its move. “In reaching this conclusion, the commission reserves the right to restart the clock as it believes will best serve the public interest and it intends to provide further guidance as it becomes appropriate.”
The review process, which began shortly after AT&T announced plans to acquire DirecTV for $48.5 billion back in May, now sits at day 170 of the FCC’s 180-day review process. The Comcast/Time Warner Cable deal sits at day 165. The FCC reset the clocks last December connected to the previous confidentiality concerns.
The FCC set up a steering committee in August to oversee the deals, thus connecting their path through the regulatory process. The committee is chaired by FCC General Counsel Jonathan Sallet, with bureau chiefs on the steering committee that include Media Bureau Chief Bill Lake, International Bureau Chief Mindel de la Torre, Wireline Competition Bureau Chief Julie Veach and Wireless Telecommunications Bureau Chief Roger Sherman. Both proposed deals are headed by separate review committees.
As part of its offer to acquire DirecTV, AT&T said it would commit to expanding broadband coverage to 15 million rural homes; continue to offer a standalone broadband service providing at least 6 megabits per second speed “where feasible” in current markets at a fixed priced for three years; continue offering a standalone DirecTV service for at least three years; and continue its commitment to net neutrality efforts.
More importantly for the wireless industry, AT&T said it remains committed to spending at least $9 billion in the government’s planned 600 MHz incentive auction scheduled for next year if there is sufficient spectrum made available for a nationwide 20 megahertz footprint. The incentive auction is reliant on a reverse-auction process that will see television broadcasters turn in spectrum holdings in exchange for cash, though the total amount of spectrum made available for the telecommunications industry won’t be known until the reverse-auction process is complete.
AT&T recently stated in a Securities and Exchange Commission filing that it expects the DirecTV deal to close by midyear. The company noted the deal would become accretive in free cash flow and adjusted earnings per share within 12 months of closing, and that it expects to generate more than $1.6 billion in cost savings per year between the two operations within three years of closing.
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