The boards of AT&T and DirecTV on Sunday approved a deal to merge the two companies.
{mosads}Under the deal approved unanimously by both boards, Internet provider AT&T will buy the satellite television company DirecTV for $95 per share.
In a statement announcing the deal, the companies said the merged company will offer content across mobile, traditional video and Internet platforms “to better meet consumers’ future viewing and programming preferences.”
“This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens,” AT&T CEO Randall Stephenson said in a statement.
In the United States, the combined companies will be able to expand AT&T’s broadband service to 15 million customer locations, “mostly in rural areas where AT&T does not provide high-speed broadband service today,” within four years of the deal being approved by regulators, the companies said.
For at least three years after they merge, AT&T and DirecTV will continue to offer their broadband and television services, respectively, as stand-alone products.
AT&T also committed to following the Federal Communications Commission’s net neutrality rules, which kept Internet providers from blocking or slowing access to certain websites until they were struck down by a federal court earlier this year.
For three years after the deal closes, AT&T will continue to follow those rules, regardless of what happens to the agency’s recently launched attempt to rewrite the rules.
The Wall Street Journal first reported that the companies were in talks earlier this month, and BuzzFeed reported Saturday that the talks could culminate at the boards’ meetings Sunday.
The merger comes as regulators consider the announced merger of Comcast and Time Warner Cable, two of the country’s biggest Internet and television providers, and the rumored merger of Sprint and T-Mobile — the country’s third- and fourth-largest wireless companies.
The companies are optimistic that they can convince regulators to approve the merger, according to an internal presentation obtained by CNN Money.
According to CNN Money, the presentation sells the merger as a way to combine two companies that will face “competitive disadvantages over time.”
The presentation also touts the merged company’s ability to provide Internet access in places where it currently does not serve the market.
But public interest groups were already voicing concerns based on the reports that a deal was imminent.
“Instead of innovating and investing in their networks, companies like AT&T and Comcast are simply buying up the competition,” Free Pree CEO Craig Aaron said in a statement on Sunday.
“These takeovers are expensive, and consumers end up footing the bill for merger mania.”
The TV industry is currently “stagnating” while the Internet access industry is “growing,” making the almost $50 billion that Internet provider AT&T is paying for satellite television company “a fortune,” Aaron said.
Instead of spending that money on mergers, AT&T should spend it on upgrading its infrastructure to provider better Internet speeds to consumers, he continued.
“But these companies don’t care about providing better services or even connecting more Americans,” he said.
“It’s about eliminating the last shred of competition in a communications sector that’s already dominated by too few players.”
Public Knowledge Senior Staff Attorney John Bergmayer pledged to “analyze this carefully for potential harms both to the video programming and the wireless markets.”
Bergmayer said the “most obvious” concern is that AT&T will no longer compete with DirecTV in markets where they both offer television services.
“Policymakers will have to ask a lot of tough questions when looking at this deal,” Bergmayer said, calling for more information about the deal.
–This report was first published at 4:54 p.m. and last updated at 5:41 p.m.