AT&T promised lower prices after Time Warner merger—it’s raising them instead

AT&T promised lower prices after Time Warner merger—it’s raising them instead

AT&T is raising the bottom value of its DirecTV Now streaming service by $5 per 30 days, regardless of promising in courtroom that its acquisition of Time Warner Inc. would lower TV prices.

AT&T confirmed the value improve to Ars and stated it started informing customers of the rise this previous weekend. “The $5 increase will go into effect July 26 for new customers and varies for existing customers based on their billing date,” an AT&T spokesperson stated.

The $5 improve will have an effect on all DirecTV Now tiers apart from a Spanish-language TV package deal, AT&T instructed Ars. That means the DirecTV Now packages that presently value $35, $50, $60, and $70 a month will go as much as $40, $55, $65, and $75.

“To continue delivering the best possible streaming experience for both new and existing customers, we’re bringing the cost of this service in line with the market—which starts at a $40 price point,” AT&T stated.

What AT&T instructed a decide

Just two months in the past, AT&T stated in a courtroom submitting that purchasing Time Warner would enable it to lower TV prices. The US Department of Justice tried to cease the merger, arguing that it will raise prices for customers, however a federal decide sided with AT&T. The merger was completed on June 15.

AT&T scoffed on the Justice Department’s argument that the merger would elevate prices. The telecomm big wrote in its post-trial brief that the merger will “enabl[e] AT&T and Time Warner to reduce consumer prices.”

“The proof overwhelmingly confirmed that this merger is more likely to improve competitors considerably, as a result of it can allow the merged firm to scale back prices, provide modern video merchandise, and compete extra successfully in opposition to the more and more highly effective, vertically built-in ‘FAANG’ [Facebook, Apple, Amazon, Netflix, and Google] corporations,” AT&T instructed US District Judge Richard Leon within the temporary.

“There is no sound evidence from which the Court could fairly conclude that retail pay-TV prices are likely to increase,” AT&T stated in that very same submitting.

AT&T’s temporary identified that the Justice Department walked again a few of its value claims through the trial. “The government concedes that Turner will not withhold content [from other pay-TV operators], and it concedes that the merged entity will reduce its own consumer pay-TV prices,” AT&T wrote.

Price advantages ought to movement to customers shortly, AT&T’s submitting stated. “[C]ertain merger efficiencies will begin exerting downward pressure on consumer prices almost immediately [after the merger]” AT&T wrote.

Owning Time Warner offers AT&T extra management over how a lot it pays for the programming it provides to DirecTV prospects, as a result of it now not has to barter with a 3rd social gathering for Time Warner content material.

“Currently, our ability to bring customers more of what they want has been constrained because we own very little of our own programming and cannot unilaterally determine what content we offer and how consumers may access it,” AT&T CEO Randall Stephenson told a Senate committee in December 2016 when he was asking the federal government to approve the merger. “Instead, we have to negotiate those matters with third-party content owners, and in a fast-changing marketplace like video, it is particularly difficult to obtain flexibility to pursue new and untested business models.”

AT&T searching for extra income

When contacted by Ars, AT&T did not clarify why the Time Warner merger did not stop the $5 value improve. But the corporate famous that it is usually providing a brand new $15-per-month streaming service with fewer channels; that service is a free add-on for AT&T cell prospects with limitless plans.

AT&T final month additionally removed HBO from one in all its limitless cell knowledge plans, and the corporate raised the value of that plan by $5 a month. AT&T additionally lately raised the “administrative fee” charged to postpaid wi-fi prospects from $zero.76 to $1.99 per 30 days, according to BTIG Research.

“AT&T attributed its changes to market forces, but the company may be under pressure to find new sources of revenue after its $85.4 billion purchase of Time Warner,” CNBC wrote today. “The timing of AT&T’s price hikes and fee bumps coincides with the closure of the deal.”

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