You can now read 5 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

Red Sox Live

0

0

▲  1st Inning 0 outs

AT&T-DirecTV deal could level playing field

LOS ANGELES — Antitrust experts say that AT&T’s bid for DirecTV could reap immediate regulatory rewards. Its coming so quickly on the heels of a rival cable company merger — the pairing of Comcast and Time Warner Cable — makes it easier for regulators to approve both transactions, because they would create two counterbalanced giants in pay TV.

The experts say the potential benefits of bigger scale — cost savings and promised reinvestment in networks to create speedier connections — could outweigh the damage done to consumers by having fewer competitors.

Continue reading below

‘‘The antitrust regulators might be thinking about Comcast-Time Warner Cable becoming a Goliath with lots of small Davids,’’ said Amanda Wait, a former antitrust attorney with the Federal Trade Commission.

‘‘What the AT&T deal does — if it gets approved — is it creates another strong competitor that looks more like a Goliath than a David. It levels the playing field a little bit,’’ she said.

Even so, each deal brings a set of potential harms. For a quarter of US households, AT&T Inc.’s combination with DirecTV would reduce the number of pay TV competitors from four to three, which raises the possibility those consumers will face higher prices.

Comcast Corp. and Time Warner Cable Inc. would serve 30 million Internet subscribers, a figure that is growing. That’s roughly double the size of its nearest competitor — AT&T with 16.5 million — and could give it an unprecedented ability to charge content providers for priority access to its subscribers under new Internet rules being considered.

Both entities’ TV services would be roughly the same size — AT&T-DirecTV will have 26 million pay TV subscribers, Comcast-Time Warner Cable, about 30 million.

Although each deal will be examined on its own by the Federal Communications Commission and Department of Justice, regulators look at the current and future marketplace, said Justice’s spokeswoman, Gina Talamona.

‘‘We consider the market as it exists today and where the market may be heading with any pending or proposed deals,’’ she said.

Comcast and Time Warner Cable don’t compete in each other’s service areas, so their merger would not reduce consumer choice. But AT&T and DirecTV compete head-to-head in 22 states for TV customers. Merging would reduce consumer options in many of those markets to three: the local cable company, AT&TDirecTV, and satellite provider Dish Network Corp., which has 14.1 million customers.

Harry Davis, a regulatory issues lawyer in New York, said reducing competition won’t matter to regulators as long as there are three large players.

‘‘Most of the studies . . . suggest that as long as you have three strong competitors, you have less likelihood of any one competitor being able to raise prices,’’ he said. Davis said approving both deals is better than approving just one. ‘‘A combined Comcast-Time Warner Cable is a strong balance, and vice versa.’’

Is a third merger around the corner? Analysts say the next conversation could be between Verizon Communications, which offers FiOS Internet and TV service, and Dish.

‘‘I think that’s more plausible now,’’ said Samina Karim, associate professor at the Boston University School of Management. ‘‘The competition can’t sleep.’’

Loading comments...
Subscriber Log In

You have reached the limit of 5 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com
Already a subscriber?
Your city. Your stories. Your Globe.
Yours FREE for two weeks.
Enjoy free unlimited access to Globe.com for the next two weeks.
Limited time only - No credit card required!
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.
Thanks & Welcome to Globe.com
You now have unlimited access for the next two weeks.
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.