CNN – Government regulators officially cleared the way for AT&T to acquire DirecTV on Friday, making the combined company the country’s biggest provider of TV subscriptions.
AT&T is expected to make a statement later on Friday.
The five-member Federal Communications Commission has voted to approve the $49 billion transaction, according to a source with direct knowledge of the vote. All five members approved of the deal at least in part.
There are significant conditions attached, some of them meant to ensure that AT&T won’t give its own video services a leg-up over the competition, and AT&T has agreed.
Together, AT&T and DirecTV will provide TV to about 26 million households in the United States — more than a quarter of all the homes that pay for some form of a TV bundle.
Comcast, formerly the biggest seller of TV subscriptions, will be No. 2, with slightly more than 22 million households served.
While Netflix and other streaming companies are making inroads, the vast majority of American households rely on monthly packages of broadcast and cable channels sold by companies like AT&T.
DirecTV provides satellite TV service. AT&T’s newer, smaller U-verse is a cablelike fiber-optics service.
The two companies agreed to merge in May 2014. The government approval process took more than a year.
“This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens — mobile devices, TVs, laptops, cars and even airplanes,” AT&T CEO Randall Stephenson said at the time of the announcement.
Earlier this week the Justice Department signed off on the corporate combination and FCC Chairman Tom Wheeler also signaled his support.
That’s what spurred Friday’s vote by the five commissioners.
Wheeler said in a statement that the conditions will “directly benefit consumers by bringing more competition to the broadband marketplace.” AT&T is committing to an expansion of broadband availability.
Wheeler also said the conditions imposed on the deal are intended to “prevent discrimination against online video competition.”
The company will have to submit regular reports on “network performance” to the FCC. And the FCC will require an “independent officer to help ensure compliance with these and other proposed conditions.”