TV Answer Man, I read that President Biden is proposing a massive bill to fund Internet expansion in rural areas. I remember you said DIRECTV and Dish couldn’t merge now because there wasn’t streaming in rural areas so people had to get satellite. Do you think this bill will allow the merger to happen? — Clark, Biloxi, Mississippi.
Clark, you may be on to something. AT&T, which owns DIRECTV, recently sold a 30 percent minority stake to private equity firm, TPG. The deal is expected to close in the second half of this year and some analysts, including yours truly, believe it will ultimately lead to a merger with Dish, DIRECTV’s longtime satellite rival.
One major reason why AT&T didn’t just sell DIRECTV to Dish now is a concern that federal regulators might reject the merger because it would create essentially a TV monopoly in rural areas where high-speed Internet (and streaming) is not readily available. Those rural residents must subscribe to a satellite TV service because it’s basically the only option they have other than the antenna. If DIRECTV and Dish merged, there would be only one satellite TV service which could lead to higher prices for those residents.
The FCC last year estimated that 21 million rural Americans still lack access to high-speed Internet, although some believe the number is higher.
President Biden’s $2 trillion infrastructure proposal includes $100 million for Broadband expansion projects with a target of providing affordable high-speed Internet to all areas by decade’s end. In concept, it would seem to remove the biggest obstacle in the way of a DIRECTV-Dish deal.
However, there are two caveats.
First, the bill has to pass. Republicans, and some Democrats, are strongly objecting to the bill’s price tag, saying it will further expand the deficit. That doesn’t mean it won’t pass, but some of the bill’s loftier goals, such as Internet for all, could be watered down.
Two, if the bill does pass, we need to see the timetable for those Broadband expansion projects. Will work begin soon after passage, or as often happens with government projects, will it be delayed several years while task forces and congressional panels churn out impact studies? Federal regulators who would rule on a DIRECTV-Dish merger might want to wait before approving it until expanded Internet availability in rural areas is a reality, not just a project.
Still, I would guess that AT&T and Dish executives are watching this situation very closely to determine their next move. The TV Answer Man will monitor the situation as well and report back here if anything changes.
Until then, happy viewing, and stay safe!
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— Phillip Swann