A trade group that represents 850 small cable companies across the United States argues that AT&T's purchase of DirecTV and the Comcast/Time Warner Cable merger will contribute to higher programming costs, causing some of these small cable TV and Internet providers to drop programming or simply go out of business.
AT&T, which has 16.5 million broadband subscribers and 5.9 million pay TV customers, says it needs to buy DirecTV because it isn't big enough to negotiate favorable programming rates or compete effectively against large cable operators. Yet AT&T is a giant compared to small ISPs. The American Cable Association's (ACA) smallest members have fewer than 100 subscribers, and its biggest has more than a million, while about 700 of its members have 5,000 subscribers or less each. In total, the 850 independent providers in the group serve "nearly 7 million consumers in all 50 states," the ACA says.
Some of those would be at greater risk because the largest TV and broadband providers are set to get even bigger by merging with each other, ACA Senior VP of Government Affairs Ross Lieberman argued in testimony before the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law today.
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