AT&T Inc. (NYSE:T) is starting to face problems with its DirectTV deal. Cognet Communications and Netflix have asked the deal to be blocked by the FCC. Recently, FCC had also blocked a deal between Comcast and Time Warner. The deal between AT&T and DirectTV is valued at around $48 billion. Netflix has argued that the merger would create a new giant, which can easily affect online-video distributions, making it easy to eliminate competition.
AT&T has already blocked the access to Netflix services for its customers and the potential deal means that AT&T might just become the largest internet service provider in the country. This would significantly affect Netflix. Netflix has argued with the FCC that the blocking of Netflix services is a sign of anti-competitive behavior. It further argued that the increase in power, the company might exercise the same behavior with other companies.
Representatives from Netflix state that the company is not outright opposing the deal, rather it is working with the FCC to come up with suitable alternates. AT&T and DirectTV believe that their deal is not aimed at eliminating competition, but is in the interest of the general public. If this turns out to be the case, then the FCC would have no reason to intervene. Currently, FCC is going through white papers and reviews by other companies to assess the viability of the deal.
This is, however, not the only acquisition that AT&T is involved in. The company has also acquired Nextel Mexico, in order to expand its presence. The deal was completed at the cost of $1.88 billion. AT&T announced that it aims to merge the new acquisition, with the already acquired lusacell Mexico. The two companies would work together to improve AT&T’s wireless offerings in Mexico. However, AT&T has been facing a loss of customers, due its pricing plans. This is one area that the company needs to focus on before it moves further with any more acquisitions.
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