AT&T TO BUY DIRECTV
FOR $48.5 BILLION IN
MOVE TO EXPAND CLOUT
WASHINGTON, DC – On Sunday May 18th AT&T
agreed to buy satellite television operator
DirecTV for $48.5 billion. With the acquisition,
AT&T becomes the latest telecommunications
giant seeking to establish an even greater
reach.
The acquisition is just the latest in a
quickly consolidating telecommunications
industry. Comcast agreed in February to buy
Time Warner Cable for $45 billion, a bid to
become the country’s dominant provider of
cable TV and high-speed Internet access. That
merger is still facing regulatory review. And
Sprint, which is controlled by the Japanese
telecom company SoftBank, plans to merge
with T-Mobile USA, creating a serious rival to
Verizon and AT&T.
AT&T is hoping to make pay-television
another pillar in its sprawling business,
which already includes telephone, mobile and
broadband service. By acquiring the country’s
biggest satellite television operator, AT&T
would gain more clout in negotiating licensing
deals with television programmers. It would
also get an instant lift to its international
business with the addition of 18 million
DirectTV subscribers in Latin America.
The acquisition would also bring to
AT&T DirecTV’s existing content at a time
when AT&T has made video services a priority.
DirecTV’s offerings include the National
Football League’s “Sunday Ticket,” and
minority stakes in the Game Show Network
and MLB Network. It would also help get AT&T
into new markets like video and data services
inside airplanes, home security offerings and
mobile data for cars.
In addition to the financial benefits,
AT&T tried to cast the deal as a benefit to rural
consumers who are currently have no access
to AT&T’s broadband service. Along with
television, DirectTV sells satellite broadband
connections, although the service can be a bit
slow.
Additionally, AT&T tried to make the
deal more palatable by promising to honor
net neutrality for three years. AT&T said that
it planned to bundle its new acquisition’s
services with existing offerings like broadband
Internet and cell phone service.
BUSINESS
EVERYTHING YOU NEED TO KNOW ABOUT THE END OF (INTER)NET NEUTRALITY
WASHINGTON, DC - It may be the end of the Internet as we know
it.
That was the reaction from consumer advocates and
some websites after the Federal Communications Commission
announced new rules governing
Internet service on Thursday May
15th. The rules effectively put an
end to net neutrality, or the idea
that all web traffic should be
treated equally.
The FCC insists, however,
that the new rules would not
harm Internet users. In a blog
post that same day, FCC Chairman
Tom Wheeler said there had been
“a great deal of misinformation”
about the proposal, which he
said would not permit “behavior
harmful to consumers or
competition by limiting the
openness of the Internet.”
Here are some key points
to understand regarding the
changes:
What is net neutrality and
why is this happening?
Net neutrality is the idea that
your Internet provider must
treat all Web traffic equally. A
court decision in January struck
down FCC rules meant to ensure
that Internet providers do not
discriminate by blocking or
slowing certain content. That
decision opened the door for
Internet providers like Comcast
and Verizon to cut deals with
content providers, which would
pay to stream their content in
an Internet “fast lane.” After
the ruling, the FCC said it would
revise its rules. That’s what
happened on May 15th.
Internet content they want, when they want and how they want,” the company
said in a statement.
The FCC said these deals would still be fair because Internet providers
would be required to reveal how they handle traffic, how much they charge
companies for access to fast lanes,
and whether they’ve given preferential
treatment to their own content.
That last part could become especially
important as Internet providers are
increasingly becoming entertainment
companies. AT&T said this week it plans to
launch a new online video service. Comcast
owns NBC Universal, which includes 30
cable networks, 26 local TV stations and
part of the streaming service Hulu.
Internet providers would be required to act
in a “commercially reasonable manner,”
according to the FCC, which will vote on
the proposed rules later this year.
What could that mean for me, in
English, please?
First off, the web could get more expensive.
The impact on the average Internet user
will likely not be felt right away. But over
time, websites would probably pass on to
consumers the costs of paying for highspeed access. In addition, it could become
difficult to view certain websites owned
by companies that can’t afford to pay for
access to an Internet fast lane.
On top of Internet users potentially
paying more, they would also be more
confused. Under the proposed rules,
people would need to make sense of