DirecTV for $50B?

by Colin Berkshire

AT&T is spending $50 Billion to purchase Direct TV so that they can re-enter the TV business. You may recall that in 1998 they also entered the TV business when they purchased were in the TV business when they purchased TCI so that they could provide voice, data and TV services. AT&T then later sold off this business at a loss.

What torques me is not that AT&T is entering TV for the second time but that they are spending $50 Billion to do it.

The AT&T cell phone network is pretty bad in many of the cities that they show on their map as having “excellent” coverage. Their coverage is non-existent when you get a few miles out of some of those cities. I’m not saying that their coverage maps are outright lies, but most people’s phones don’t have coverage where they show there should be service.

For $50 Billion AT&T could build 500,000 cell phone towers. America only has 200,000 cell phone towers. You see, if AT&T really wanted to provide decent cell phone service they could, and they have the money. But they don’t seem to care about quality of service nor coverage of areas outlying the interstate highway network.

If that isn’t enough to boil your blood, look at your phone bill. It has a big line item for Universal Service–16.4% of your bill–that goes into a giant FCC slush fund that AT&T draws against to provide coverage in the same areas that it doesn’t cover.

So here AT&T is taking billions of dollars to serve rural areas and it is essentially using that money to get back into the TV business…for a second time. Perhaps they should think more about providing reliable cell phone service, first.