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Klobuchar, Lee Call for Review of AT&T’s Proposed Acquisition of DirectTV

In letter, Senators urged the Department of Justice and Federal Communications Commission to assess the impact that the proposed merger could have on consumers, including price, choice, and quality of service

May 23 2014

Washington, DC – U.S. Senators Amy Klobuchar (D-MN) and Mike Lee (R-UT) today sent a letter to the Department of Justice (DOJ) and Federal Communications Commission (FCC) regarding AT&T’s proposed acquisition of DirectTV. In the letter, the Senators urged the DOJ and FCC to assess the impact that the proposed merger could have on consumers, including price, choice, and quality of service. Klobuchar, the chair of the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, and Lee, the Ranking Member on the Subcommittee, will hold a hearing to examine the potential acquisition this summer.
 
“This proposed transaction would result in additional consolidation in the market for pay television and may impact consumer welfare in that market and other markets in which the companies operate,” the Senators said in the letter. “As always, the key to analyzing any merger should be the effect it will have on consumers, including price, choice, quality of service, and innovation.”

The full text of the letter is below:
 
Dear Assistant Attorney General Baer and Chairman Wheeler:
 
As Chairman and Ranking Member of the Subcommittee on Antitrust, Competition Policy and Consumer Rights, we write regarding AT&T’s proposed acquisition of DirecTV.  This proposed transaction would result in additional consolidation in the market for pay television and may impact consumer welfare in that market and other markets in which the companies operate.  For example, the companies currently compete with each other in 25 percent of the country, including in 10 of the top 20 markets.  In addition, this merger, taken together with the recently announced merger between Comcast and Time Warner Cable, could potentially affect future innovation and technological advances, including the availability of online video distribution.   
 
AT&T and DirecTV state that their merger will create a “competitive alternative to cable for consumers wanting a better bundle of top-quality broadband, video and mobile services, as well as a better customer experience and enhanced innovation.”  The companies further state that increased scale will allow the merged entity to realize cost synergies.
 
As you review this transaction, we believe it is important to validate and weigh these efficiencies against the potential competitive harms that could result from the transaction.  As always, the key to analyzing any merger should be the effect it will have on consumers, including price, choice, quality of service, and innovation.
 
We plan to hold a Subcommittee hearing this summer to examine the important issues raised by this proposed merger and will follow up with you based on the evidence and testimony reviewed during that process.  Thank you for your attention to this matter.
 
Sincerely,