Netflix wants AT&T/DirecTV merger ended in current form

Streaming service Netflix has urged American regulators to stop the merger of satellite broadcaster DirecTV and US telco AT&T in its current proposed form.

In a filing made to the Federal Communications Commission this week, Netflix claimed the new company’s “ability and incentive to harm OVDs [online video distributors]” would increase if the two firms came together.

This was because, after the end of planned merger between Comcast and Time Warner Cable, the US$48 billion DirecTV/AT&T tie-up would result in the creation of the largest multichannel video programming distributor and potentially the largest internet service provider in the US.

“These two dynamics create a powerful incentive for AT&T to protect its investment in DirecTV’s bundled programming by using its ability to harm OVDs to prevent or delay cord-cutting and cord-shaving,” Markham C. Erickson of Steptoe & Johnson LLP wrote on behalf of Netflix.

AT&T had “previously demonstrated ability to harm OVDs by leveraging its control over interconnection to degrade its own customers’ access to Netflix’s service”, added Netflix.

Added together, these conditions would give the new company unfair market advantages, Erickson alleged.

AT&T has previously forced Netflix pay to use its faster-speed network. Netflix and other SVOD services such as Amazon Prime Instant Video and Hulu often command huge broadband width as online video consumption grows.

Comcast’s deal with TWC was dropped after significant regulatory scrutiny over the potential for market monopoly in the ISP and OVD spaces.