Netflix calls on FCC to reject AT&T merger unless changes are made

Netflix is urging federal regulators to deny the $48 billion merger of AT&T and DIRECTV unless changes are made to the proposal.

The online video streaming giant made the call during a meeting with the Federal Communications Commission, according to a disclosure filing published Tuesday. 

“We’ve been highlighting these concerns and the need for appropriate remedies since last September,” Netflix spokeswoman Anne Marie Squeo.

{mosads}The meeting on April 30 came days after Comcast pulled out of its proposed merger with Time Warner Cable amid concerns from the FCC and the Justice Department that it could harm video competition. Netflix was among the vocal critics of that merger, and filed a formal petition against it.

The merger with DIRECTV would make AT&T the largest provider of cable and satellite service, and could make it the largest Internet service provider as well, Netflix said. 

“Such market power creates new incentives and abilities to harm entities that AT&T perceives as competitive threats, and will exacerbate the anticompetitive behavior in which AT&T has already engaged,” according to the filing. 

Netflix cited previous interconnection disputes with AT&T. It said the company’s purchase of a legacy video service could make it see online video distributors (OVD) — including Netflix — as a threat.   

“AT&T’s investment in a business model that profits by selling bundled programming packages will result in a powerful incentive to protect that model,” the filing said. 

The Netflix filing made public Tuesday used strong language, calling on the FCC to “reject the merger as currently proposed.”

Back in September, Netflix said the FCC should put a number of conditions on AT&T if the deal goes through.

“This likely harm can be avoided with appropriate, clear, and long-term conditions,” the company said in a September filing. “Those conditions must be designed to endure that combined entity cannot abuse its control over Internet traffic, whether over its mobile or fixed networks, or whether over the last mile or at interconnection points, to harm OVDs.”

More attention has hit the AT&T merger now that the Comcast deal fell apart. Sen. Al Franken (D-Minn.), one of the most vocal critics of the Comcast deal, said last week that he was skeptical of the AT&T merger. But he added that he had not been following it closely because his focus was on halting the Comcast deal. 

AT&T has recently argued that the merger would allow it to bring super-fast Internet speeds to 2 million more customers. It has also touted that the deal could bring broadband service to 13 million more rural and underserved customers. 

In a meeting late last month, the company urged the FCC to “promptly approve the transaction so that customers can begin to enjoy the resulting public interest benefits.”

– This story was updated at 12:56 p.m.