AT&DirecTV or AT&T vs. Verizon vs. TWC

[dando]

http://finance.yahoo.com/news/t-agrees-buy-directv-48-214006017.html

http://www.cnet.com/news/at-t-to-buy-directv-in-pay-tv-combination-blockbuster-deal/

Huge. Simply huge. What's amazing is that AT&T is basically following the blueprint C. Michael Armstrong created before he was ousted in 2002. This integration is going to be interesting to watch in many ways.

[WickerBill]

Sad day.

[Insomniac]

Seems more like a vertical merger than horizontal. AT&T has been so slow to deploy fiber that their TV business really isn't competitive vs TWC/Comcast/Charter/Cox et. al. The reality is in most of the country your choice is satellite or 1 cable company. I don't think this matters, maybe some cheaper bundles between DirecTV and AT&T Wireless?

There's very little actual competition on the price front today for most Americans. We're at the mercy of the provider and content owners. We pay whatever they can get us to pay. It's certainly an experiment in finding market equilibrium without competition.

[nrc]

Sad day.

Because you're a DirecTV fan and you're afraid that AT&T will ruin it?

[WickerBill]

Because you're a DirecTV fan and you're afraid that AT&T will ruin it?

Correct. I could go with my standby "At least it isn't Comcast" but I'm not entirely sure what this accomplishes for the customer.


Note: I realize this isn't intended to benefit the customer.

[nrc]

Seems more like a vertical merger than horizontal. AT&T has been so slow to deploy fiber that their TV business really isn't competitive vs TWC/Comcast/Charter/Cox et. al. The reality is in most of the country your choice is satellite or 1 cable company. I don't think this matters, maybe some cheaper bundles between DirecTV and AT&T Wireless?

There's very little actual competition on the price front today for most Americans. We're at the mercy of the provider and content owners. We pay whatever they can get us to pay. It's certainly an experiment in finding market equilibrium without competition.

The problem with competition in the MSO market is that it doesn't make sense to invest the millions that it takes to enter a market only to have to compete with an established monopoly.That's why efforts like Uverse and FIOS have stalled.

I actually see this as good for competition because DirecTV was going to be made less and less competitive by their lack of a viable broadband service. Now AT&T and DirecTV combined can become and remain viable competitor for most of the nation.

[pfc_m_drake]

Correct. I could go with my standby "At least it isn't Comcast" but I'm not entirely sure what this accomplishes for the customer.


Note: I realize this isn't intended to benefit the customer.The only thing that you can hope for (however unlikely) is that it further inspires Google Fiber.

[gjc2]

I realize this isn't intended to benefit the customer.

You’re more cynical than I am.

Don’t you think that they’ll try to provide as much value vs. price as possible to be competitive in the market?

[WickerBill]

You’re more cynical than I am.

Don’t you think that they’ll try to provide as much value vs. price as possible to be competitive in the market?

Nope. I think they will raise prices and stall new value until they start to see their numbers slip for the first time; only after that will they stop the bleeding.

The "value" they will provide will be in the form of bundles and short-term discounts.

[datachicane]

Nope. I think they will raise prices and stall new value until they start to see their numbers slip for the first time; only after that will they stop the bleeding.

The "value" they will provide will be in the form of bundles and short-term discounts.

Yep. Competition in a mature market is largely marketing kabuki providing cover for maximized wealth extraction.



People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

[Andrew Longman]

What WB said.

You can always tell when a market is mature and innovation is dead when it goes 3D

[nrc]

I saw an interesting story the other day that the whole deal may be predicated on DirecTV renewing their NFL Sunday Ticket deal. Interesting because I thought that the scuttlebutt was that the deal had gotten too pricey.

[dando]

I saw an interesting story the other day that the whole deal may be predicated on DirecTV renewing their NFL Sunday Ticket deal. Interesting because I thought that the scuttlebutt was that the deal had gotten too pricey.

http://www.cnet.com/news/nfl-sunday-ticket-the-easiest-way-to-derail-the-at-t-directv-deal/

AT&T could pull the plug if the NFLST isn't renewed.

[Andrew Longman]

Of course. NFLST is a trump competitive advantage for DTV. Especially DTV also sets the bar for customer service. Leaves a race to the bottom for the others to compete on price. That cost control driver is a lot behind the race to consolidate.

[Ankf00]

You’re more cynical than I am.

Don’t you think that they’ll try to provide as much value vs. price as possible to be competitive in the market?

that's not how duopolies in high inertia markets work

[Insomniac]

http://www.cnet.com/news/nfl-sunday-ticket-the-easiest-way-to-derail-the-at-t-directv-deal/

AT&T could pull the plug if the NFLST isn't renewed.

I'm certain they'll renew. They'll be paying, but they're up to $1B/yr now. Supposedly they have 2M subscribers for it (seems low to me). The NFL also wants this because a local cable operator doesn't make sense (unless they do a deal with all for NFLST or PPV).

[Insomniac]

At this point, I feel like the biggest cost driver is the content providers. Until consumers are given a la carte as an option, they'll continue to create and bundle more channels and raise rates.

Also, as nearly every internet provider gets involved in TV and vice versa, cutting the cord becomes more onerous. They will get their money one way or another. My Internet bill has gone from $50/month to $63 in 2 years. With a usage cap of 250GB. HD streaming video is what, 2-2.5 GB/hr?

I'm looking forward to the Aereo decision, but I fear they will lose. I'm hoping they win and ultimately you can get out-of-market choices.

[chop456]

At this point, I feel like the biggest cost driver is the content providers. Until consumers are given a la carte as an option, they'll continue to create and bundle more channels and raise rates.

Also, as nearly every internet provider gets involved in TV and vice versa, cutting the cord becomes more onerous. They will get their money one way or another. My Internet bill has gone from $50/month to $63 in 2 years. With a usage cap of 250GB. HD streaming video is what, 2-2.5 GB/hr?

I'm looking forward to the Aereo decision, but I fear they will lose. I'm hoping they win and ultimately you can get out-of-market choices.

Threaten to switch. I pulled that on TWC and they dropped my bill $20/month. And now I'm switching anyway. :D

[gjc2]

Threaten to switch. I pulled that on TWC and they dropped my bill $20/month. And now I'm switching anyway. :D


About six or seven years ago Verizon Fios came into my market to compete with Cablevision. All you have to do is mention Fios to a Cablevision and they throw something it. Cablevision has continued to give me the introductory first year rate for several years and recently up graded me to 50MB download and 25 upload broadband for free.

[dando]

Can Google Fiber save the day?

http://www.cnet.com/news/google-offers-best-argument-for-broadband-competition/

[pfc_m_drake]

Like I said, it's unlikely - but that (and FIOS) seem to be the consumer's best hope.

[Insomniac]

Threaten to switch. I pulled that on TWC and they dropped my bill $20/month. And now I'm switching anyway. :D

Yeah, I call in annually to get a discount on NFLST and some bill credits. I don't even need to threaten to switch. But while the credits stay the same, the bill goes up ~$5 annually. I could save $20+/mo if I didn't watch F1.

[Insomniac]

Can Google Fiber save the day?

http://www.cnet.com/news/google-offers-best-argument-for-broadband-competition/

First they have to lay the fiber. Problem is, the best place to start is a big city, and those are the places most likely to have competition. It's not all that valuable to put down fiber where the population density is low.

Of course, they're also into the TV business.

Some municipalities are trying to put down the infrastructure themselves to bring competition, but cable companies are not fans. (http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/03/cable-companies-want-to-block-cities-from-building-fiber-networks-heres-how-the-fcc-could-intervene/). If you want a free market competition on providing data services, that's the best way I can think at least. The owners of the fiber let anyone provide data services on the network. The owners provide a level playing field.

But if you want to take on content owners, you need a lot of subscribers to get the leverage.

The other complaint is that data providers are double dipping on the bandwidth by charging their customers and Internet content providers for access to bandwidth.

[dando]

First they have to lay the fiber. Problem is, the best place to start is a big city, and those are the places most likely to have competition. It's not all that valuable to put down fiber where the population density is low.

Of course, they're also into the TV business.

Some municipalities are trying to put down the infrastructure themselves to bring competition, but cable companies are not fans. (http://www.washingtonpost.com/blogs/the-switch/wp/2014/02/03/cable-companies-want-to-block-cities-from-building-fiber-networks-heres-how-the-fcc-could-intervene/). If you want a free market competition on providing data services, that's the best way I can think at least. The owners of the fiber let anyone provide data services on the network. The owners provide a level playing field.

But if you want to take on content owners, you need a lot of subscribers to get the leverage.

The other complaint is that data providers are double dipping on the bandwidth by charging their customers and Internet content providers for access to bandwidth.

Years ago GOOG bought up a bunch of dark fiber from the late-90s bubble. They are supposedly sitting on a pile of it, and it's a matter of hooking it all up.

http://news.cnet.com/2100-1034_3-5537392.html

[Insomniac]

Years ago GOOG bought up a bunch of dark fiber from the late-90s bubble. They are supposedly sitting on a pile of it, and it's a matter of hooking it all up.

http://news.cnet.com/2100-1034_3-5537392.html

I guess the key is, where is it? I doubt there's much of it outside of urban areas and backbones.

[Insomniac]

Update on Aeroe: They lost, their service is illegal.

http://www.usatoday.com/story/money/business/2014/06/25/aereo-ruling-qa/11352989/