AT&T's acquisition of DirecTV appears headed for approval with conditions

FCC chairman Tom Wheeler has circulated his recommendation for approval of the deal

AT&T's acquisition of DirecTV appears headed for approval, with Tom Wheeler, chairman of the Federal Communications Commission circulating to commissioners an order recommending approval, although with some conditions.

The Department of Justice's Antitrust Division also announced Tuesday that it will close its investigation into the around US$48 billion deal.

Assistant Attorney General Bill Baer of the Antitrust Division said in a statement that the division had concluded that the combination of AT&T's land-based Internet and video business with DirecTV's satellite-based video business does not pose a significant risk to competition.

The deal still requires the approval of four other commissioners of the FCC, besides Wheeler. If the conditions are approved by his colleagues, 12.5 million customer locations will have access to a competitive high-speed fiber connection, Wheeler said. "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," he said in a statement.

AT&T also has to meet conditions aimed to ensure net neutrality, building on the FCC's Open Internet Order. To prevent discrimination against online video competition, AT&T will not be allowed to exclude affiliated video services and content from data caps on its fixed broadband connections. The company will be also be required to submit all completed interconnection agreements to the FCC, along with regular reports on network performance. The FCC will also require an independent officer to help ensure compliance with these and other proposed conditions.

AT&T said in a statement that it hoped the order will be approved by the commission quickly, and it expects to close the deal shortly thereafter.

The proposed acquisition was announced in May last year, and AT&T had at the time promised to abide by the FCC's net neutrality rules that had been struck down by a federal court. The commission introduced new rules this year.

The deal reflects a wave of consolidation in the media and communications industry. Verizon Communications bought AOL in June. But some deals haven't gone through. Comcast walked away in April from a merger deal with Time Warner Cable after regulators had concerns about the plans.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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John Ribeiro

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