There was a merger that was proposed between DirecTV and Dish about 20 years ago that was blocked by the U.S. Justice Department and the Federal Communications Commission (FCC). However, there have been significant changes with each company as well as the FCC in recent years.
TPG Capital recently took a minority stake in DirecTV. The company is now looking at the merger with Dish and trying to make that happen. So that more money can be made for all companies that are involved. Dish Network Chairman Charlie Ergen has talked about the merger between the two companies being inevitable for some time. And TPG appears to be taking the prophecy that Ergen has been discussing into reality.
The Government’s Say:
It’s possible that the FCC and the U.S. Justice Department will strike down the merger once again because of antitrust concerns that were present the first time the merger was proposed. There are a few factors that should be taken into consideration now that weren’t noticed 20 years ago or that weren’t in play 20 years ago.
The reason the merger was blocked was because of concerns over the availability of MVPD. When the merger was discussed 20 years ago, consumers didn’t have a lot of options regarding TV as they could use an antenna. You can go with one of the few cable or satellite companies. If the two companies merged, then it could have created a monopoly at the time that allowed the two businesses to take over others that were in the market.
Internet Service:
Consumers have many more options for TV and internet services today. There are also numerous streaming services that are available, such as Sling TV. Consumers don’t have to use a satellite or cable company to watch TV unless they absolutely want more channels or other services that are available.
Since there are more players on the field, the merger with Dish and DirecTV likely won’t be looked at as harshly as there isn’t as much competition as there was two decades ago. The Department of Justice approved a merger between Sirius and XM in 2008. At that time when there were concerns that the combined company would take over the car radio industry. However, after looking at the availability of services. It was decided that the merger wouldn’t impact the competition quite as much because of the different types of services offered.
Technology in Entertainment:
Technology is now shifting how people think in the market of music, the internet, and cable. So that consumers have more options along with more internet services that are provided by those options. There has been more funding set aside by the federal government for broadband to allow for expansion. And to allow for more companies to hop on board. With providing internet services that might not have had a chance a decade ago.
With the mergers of different phone companies over the past few years, it seems as though the FCC. And the Department of Justice is looking into a merger between Dish and DirecTV in a new light. While some people live in areas where broadband hasn’t been upgraded. Or isn’t available might not think that a merger between two powerhouses is good. The financial standpoint is something to consider as it could mean a significant increase in revenue. Which could help with expanding broadband.
