AT&T's (NYSE: T) $49 billion acquisition of DirecTV (NASDAQ: DTV) may have gotten the green light from FCC Chairman Tom Wheeler, but in giving his support he has asked the telco to stick to its word on its FTTH expansion and not discriminate against online video competitors like Netflix (NASDAQ: NFLX) whose applications run over its broadband network.
All that is needed to complete the deal now is the other FCC commissioners need to provide their approval. Meanwhile, the Department of Justice has also approved the acquisition.
In an effort to gain the FCC's approval for the deal, AT&T recently wrote in an FCC filing it would propose to bring its 1 Gbps FTTH service to 11.7 million additional customer locations. The service provider said in its filing that the "Build Plan will be completed within four years after the merger's closing."
The FTTH buildout goal is more than the initial plan it revealed last June to upgrade 2 million homes to the fiber-based Gigapower broadband service, while expanding overall broadband coverage overall to 13 million locations.
Wheeler said that the condition to expand its build out of its FTTH network will provide benefits to consumers by "bringing more competition to the broadband marketplace."
"If the conditions are approved by my colleagues, 12.5 million customer locations will have access to a competitive high-speed fiber connection," Wheeler said in a statement. "This additional build-out is about 10 times the size of AT&T's current fiber-to-the-premise deployment, increases the entire nation's residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve."
FTTH is only one of the conditions that the FCC has placed on the merger, however.
The FCC says that AT&T will also have to abide by rules to inhibit online video competitors from delivering services to their customers, while having the regulator review interconnection agreements.
"First, in order to prevent discrimination against online video competition, AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections," Wheeler said. "Second, in order to bring greater transparency to interconnection practices, the company will be required to submit all completed interconnection agreements to the Commission, along with regular reports on network performance."
COMPTEL, an industry advocacy group representing competitive service providers, applauded the FCC's move to place greater review around AT&T's interconnection processes.
"We're pleased to see interconnection taking center stage in the Commission's Order on AT&T/DirectTV," said Chip Pickering, president of COMPTEL in a statement. "The transparency condition gained in this merger will give the Commission the tool it needs to review AT&T's interconnection practices to determine whether it is living up to the industry's standard of no access fees."
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