AT&T tells lawmakers DirecTV deal won't guarantee lower prices

Tue Jun 24, 2014 6:55pm EDT
 
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By Marina Lopes and Alina Selyukh

WASHINGTON (Reuters) - U.S. lawmakers grilled AT&T Inc and DirecTV on Tuesday over a proposed merger that some Democrats and public interest groups fear will result in higher costs and less competition.

The chief executives of the No. 2 wireless carrier and the largest U.S. satellite TV service provider testified about their proposed $48.5 billion deal at hearings in the House of Representatives and the Senate, and said the scale the merger would allow them to save on the high costs of negotiating rights to video content.

But there were some tough reactions in Washington.

"I am very, very skeptical as a senator, not just as a consumer," senator Richard Blumenthal, a Democrat from Connecticut, said at a hearing by the Senate Judiciary Committee's antitrust panel.

Blumenthal asked AT&T CEO Randall Stephenson whether he could commit to pass on the savings from lower content fees to consumers dollar-for-dollar.

"No sir, I can't," Stephenson said, but added he hoped the merger would result in slower price increases for consumers.

"One would have to believe in the market and the market pressures, and that market pressures will compete margins away and cost savings will find their way into prices."

Michael White, DirecTV's Chief Executive added that he expected customers to see better value bundles.   Continued...

 
Michael White, CEO of DirecTV, speaks during the Reuters Media and Technology Summit in New York, June 11, 2012. REUTERS/Keith Bedford