AT&T, DirecTV Deliver 'Merger Synergies' By Raising Rates In Perfect Unison

You'll recall that when AT&T was trying to justify its $69 billion acquisition of DirecTV, it rolled out all the usual claims about how the deal would have immeasurable benefits for consumers. Sure, the deal would technically eliminate jobs and a pay TV competitor from an already competitively-stunted market, but just think of the potential synergies! And as the two companies begin to fuse operationally, these amazing synergies have started to materialize -- in the form of new rate hikes imposed by both companies on exactly the same day. Claiming the hikes are due to an "improved experience" for consumers, AT&T has notified its U-Verse TV subscribers that they can expect $2-$4 price hikes on all the company's TV packages, $2 price hikes on the company's voice services, as well as a notable bump in most of the company's sneaky, below-the-line fees -- used to jack up the advertised cost of service post-sale. That includes a bump in AT&T's "Regulatory Video Cost Recovery Charge" (which isn't government mandated and is entirely misleading) and its "Broadcast TV Surcharge" (which is just part of the overall cost of programming buried below the line). DirecTV is simultaneously informing all customers of their own rate hikes on January 28, including a $2 to $8 bump in most TV packages. Users also get to enjoy a bump in DirecTV's monthly "TV fee," amusingly explained as such on the AT&T website:

"As technology becomes more advanced, monthly fees for receivers and Genie Minis allow us to provide the latest equipment with minimal upfront cost to the customer. The upgrade fees allow us to keep our monthly fees low. Many leased items require an upfront payment as well as monthly fees. Similar to leasing a car, a customer pays an amount upfront, and that amount allows the customer and the company to keep the monthly fee low."

Yeah, that's a company increasing a fee it claims exists to protect consumers from higher fees. Note, of course, that AT&T repeatedly stated pre-merger how the merger with DirecTV would give them greater leverage with broadcasters than ever before, allowing them to negotiate lower rates for programming. Unmentioned, of course, was that those dramatic price reductions would be pocketed and not passed on to consumers. Amusingly, the only place the two companies are lowering rates is the cost of HBO, which they've had to drop from $19 to $15 thanks entirely to competition from HBO's standalone streaming video service, HBO Now. Hopefully there's more price disruption from where that came from. AT&T was fortunate in that consumer ire toward Comcast's own bad deal allowed the AT&T DirecTV deal to fly under the radar. And since the FCC saw fit to approve the deal with largely meaningless conditions, the mega-merger (which the FCC claims somehow served the public interest) doesn't appear to provide any real benefits to consumers at all. And to think, we haven't even gotten to the point where AT&T begins to fire tens of thousands of employees to synergistically improve operational efficiencies! Permalink | Comments | Email This Story