AT&T Plans to Expand Fiber Infrastructure if DirecTV Merger Approved

AT&T says that it would be happy to expand its broadband fiber infrastructure throughout the country… if the government agencies like the FCC and the Justice Department approve its proposed merger with satellite TV provider DirecTV. AT&T recently name checked 100 municipalities in 21 metropolitan areas where it "might" bring its fiber-to-the-home network, GigaPower service. The company did not say just how many customers might be served under this attentive plan to expand its network. The service offers up to 1Gbps download speeds. AT&T also said the expansion "is not expected to impact AT&T’s capital investment plans for 2014."

That fiber expansion plan was revealed a few weeks before AT&T announced a deal to buy satellite provider DirecTV for $48.5 billion, but it seems to be tied to it; AT&T told the Securities and Exchange Commission yesterday that it needs approval of the DirecTV merger in order to bring fiber to 2 million locations.

"The economics of this transaction will allow the combined company to upgrade 2 million additional locations to high speed broadband with GigaPower FTTP (fiber to the premise) and expand our high speed broadband footprint to an additional 13 million locations where AT&T will be able to offer a pay TV and high speed broadband bundle," AT&T said in an SEC filing.

Ars Technica has more on the merger deal and the company's murky plans to build out its fiber infrastructure here.

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  1. 0
    Sleaker says:

    Sounds about right, when I read the other article in depth it mentioned that they would expand due to 'Programming cost cuts'  Which from an economic standpoint makes it sound like they don't want to finance new project development in the TV sector until they can get a better cost/benefit from the new installs.  Whether or not the margins validate that is another thing entirely though, but maybe it's not profitable enough to expand the service out there (or they don't think they'll be able to get the attachments) until they have solidified a cost reduction in how they do business.

    I have a feeling they are bluffing that they wont expand if the merger isn't allowed. If it will bring in more NET of course they'll spend on infrastructure to get more people hooked up.  They may not be able to offer the same level of service so they may not be AS profitable, but if they've done the math well they can expect to get a ROI from the expansion.  It's all about profit margins right?

  2. 0
    Wymorence says:

    The problem is DirecTV is a satellite-based TV company, which (from what I found) has very little physical infrastructure laid out since it's all done via satellite signals. Fiber Optics require actual underground cables to be laid out in order to reach the end users. Even if they're thinking about the buildings themselves, AT&T is a gigantic presence in this country already. So it's extremely unlikely they need anything DirecTV has in order to expand their fib-op setup.

  3. 0
    Sleaker says:

    Did no one ask if the reason why AT&T needs the merger to expand was because of net infrastructure that DirectTV already has in place?  I'm just wondering cause everyone else seems to be ready to jump down AT&T for 'holding back' without questioning why it's necessary for the merger.

  4. 0
    Keegs79 says:

    Its laughable they use merging with DirecTV as their excuse. If they have billions to spend on buying DirecTV, they "had" billions the whole time to improve the infrastructure but nope, they want to nickel and dime us.

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