TIME Tech

Comcast Turns 50,000 Homes into Wi-Fi Hotspots

Comcast Launches Xfinity Wi-Fi Hotspots
A Comcast worker installs Xfinity into a home. John Greim—© 2012 John Greim

Comcast turned 50,000 home routers in Houston into public Wi-Fi hotspots on Tuesday, the first stage in the company’s plan to launch hotspots across the country.

Customers with newer wireless routers will now host a Wi-Fi network named “xfinitywifi,” which other Comcast subscribers can join at no cost, the Houston Chronicle reported. The cable company will reach 8 million hotspots by the end of 2014, covering more than half of the U.S.’s major cities, according to a press release. The move will allow Comcast to compete with companies like AT&T, which offers WiFi hotspots through Starbucks and McDonald’s.

While customers had the opportunity to opt out of the initiative, more than 99% chose to enable their hotspots, a move that will improve Xfinity Wi-Fi accessibility among Comcast users and help them cut cellular data costs. In the past year, the number of out-of-home Xfinity WiFi sessions has increased by 700%.

According to Cisco, 88% of all U.S. data traffic from mobile devices will travel via Wi-Fi by 2018.

TIME wireless industry

Meet the Man Who Brought T-Mobile Back From the Brink

T-Mobile Holds Announcement Event In New York
Steve Sands—WireImage

If Sprint goes through with its rumored acquisition of wireless carrier T-Mobile, it will acquire about close to 50 million wireless subscribers, a company that generates $24 billion in annual revenue and a loud-mouth CEO that is said to be the leading candidate for steering the new, combined company.

John Legere was once a buttoned-up corporate suit for the international divisions of companies like AT&T and Dell, as well as the CEO of the now-defunct telecommunications company Global Crossing Limited. But he dumped the typical executive attire in favor of a blazer, jeans and a magenta T-shirt when he took over the ailing T-Mobile in the fall of 2012. The unusual attire fits his brash corporate strategy, which is basically to dismantle all the money-making fees the wireless industry has baked into cell phone plans over the years.

Through its “Uncarrier” campaign, T-Mobile has eliminated two-year contracts, gotten rid of international data charges and offered customers huge subsidies to lure them away from competitors. At first, the moves seemed like a desperate ploy from a last-place company. But T-Mobile has steadily added subscribers as it has offered more headline-grabbing deals, racking up 2.8 million additional postpaid subscribers since Legere took charge. The other carriers have tried to stop the company’s rise by lowering prices and offering some bribes of their own, but that hasn’t blunted T-Mobile’s momentum. In the first quarter of the year, T-Mobile added more new subscribers than the other three carriers combined. “T-Mobile’s results since they started this almost two years ago speak for themselves,” says Bill Menezes, principal research analyst at Gartner. “It really has changed the way all the big carriers now offer their service.”

Beyond overseeing strategy, Legere has given T-Mobile’s brand awareness a huge boost. He has almost 250,000 Twitter followers and regularly mocks his competitors by name. At the Consumer Electronics Show in January, he got kicked out of an AT&T party, generating tons of free press for his company. He issued a fake press release earlier this year in which he compared AT&T to Darth Vader. Is the rebel act all for show? Perhaps—Legere has been in the telecommunications industry for more than 30 years and at one point worked for current Sprint CEO Dan Hesse at AT&T. But Legere’s persona, authentic or not, aligns well with T-Mobile’s branding as a disruptor.

“Legere has been very successful in translating his personality style and kind of getting that across to the industry as someone that’s disruptive, someone that’s unorthodox in his presentation and his language,” says Wayne Lam, a wireless communication analyst at IHS technology. “He’s kind of personified that new T-Mobile brand.”

Legere’s marketing skills and business smarts have made him the primary candidate to lead the combined Sprint-T-Mobile, according to Bloomberg. “He’s seen as a dynamic figure who’s been successful at changign things in the cellular industry, and that’s really something that Sprint needs,” Menezes says.

Masayoshi Son, the CEO of Softbank, which owns Sprint, said last week at a tech conference that he admires Legere. Son has also indicated that he is fan of T-Mobile’s deep-discount strategy and believes it could be effective at scale. “I’m not content for Sprint to remain No. 3 because if we could grow bigger, we will offer aggressive discounts and services, just like we did in Japan,” he said earlier this year.

Still, T-Mobile is on a bit of a running clock because its effort to attract new customers is wildly unprofitable. The company posted a $151 million loss in the first quarter and missed analyst estimates for both earnings and revenue. A merger would instantly give the combined Sprint-T-Mobile about double the subscriber base, as well as the financial backing of Softbank, which generated more than $5 billion in profit in the 2013 fiscal year. The combined company would also have a more reliable network that would come closer to approaching the quality of AT&T’s and Verizon’s, Lam says.

Legere wins in a potential Sprint merger no matter the outcome. Either he becomes CEO of a larger telco that could legitimately compete with the top two carriers, or he gets a severance package of up to $42 million if he’s not hired at the merged company. Legere has said that a merger could be good for T-Mobile, but he’d like to stay in control. “I have no desire to turn T-Mobile into the son of something else,” he told Business Insider earlier this year.

Consumers hardly have such clear winning scenarios. There’s no guarantee that a larger, less desperate T-Mobile wouldn’t roll back its disruptive ambitions. The brand itself might eventually be swallowed whole by Sprint, which is what happened to former carriers such as Cingular Wireless and Alltel. And company consolidation is what created the fee-ridden industry that T-Mobile has so effectively disrupted in the first place. This four-horse race has been good for consumers, but there’s no telling how competitive dynamics may shift if the number of competitors dwindles to three.

“You’re eliminating a consumer choice,” Menezes says. “Any time you eliminate choice, I don’t believe that that’s good for consumers.”

TIME mergers

Mega-Mergers Are Killing Innovation

The latest mega-merger in the telecommunications sector, that of AT&T and DirecTV, would be the fourth largest in history, and it comes only months after the nation’s largest cable operator Comcast announced that it was buying Time Warner Cable, the second largest cable operator. Nor is telecommunications the only sector to see such acquisitiveness. Microsoft purchased the devices and services business of Nokia for $7.2 billion late last year, Google snapped up Nest for $3.2 billion in January, and Facebook bought WhatsApp for $19 billion in February.

Such consolidation can be good for consumers as bigger companies have the resources to innovate and provide new products and services which might otherwise never materialize. However, the vertical integration of the telecommunications and technology sectors can also restrict innovation due to decreased competition and the limitation of research to specific technologies that support existing business lines.

Take, for example, the acquisition of WhatsApp. Facebook’s primary reason for acquiring the company is to utilize the chat technology on its social media platform to bolster its existing messaging application, which currently lags WhatsApp in the smartphone market. Beyond that, Facebook will no doubt try to leverage WhatsApp’s own user base, currently more than half a billion, to promote its social media offering. But either way, the integration of Facebook with WhatsApp is the main goal and driver of value instead of some trailblazing technological development in the chat space itself.

Similarly, Comcast’s acquisition of Time Warner Cable enables the company to enter complementary markets without actually having to build new infrastructure in those markets or to innovate in any way. Such plug-and-play growth engenders laziness and deprives the U.S. of necessary infrastructure improvement and development. The U.S. is currently ranked a pitiable 35th in the world in broadband capacity according to the World Economic Forum, with even smaller nations outpacing us in cutting edge telecommunications.

Even when it comes to ‘pure’ or fundamental science that can form the basis of future technology, the relentless drive for commercialization limits its destiny to whatever fuels profits in the short term and can impede future research that does not support that. True, third parties could conduct research for other applications but the ironclad patents that major corporations hold on their technology can make such efforts unprofitable. In other words, the acquisition of promising technologies by major corporations can actually limit them by forcing them along proscribed lines in the future.

Some of the greatest scientific discoveries that have fueled mankind’s advancement were made in the vacuum of human curiosity without the profit motive that has now become the norm. Today, unless the process of discovery is sponsored by some major corporation or has an obvious application to industry at the outset, there is little motive to pursue it. Even research institutions, which have historically been neutral havens for such discoveries, now require corporate money to survive and are bound by corporate rules. This is a loss for the spirit of innovation that drives human achievement.

That is not to say that all acquisitions are bad or that our biggest companies don’t move us forward technologically, but if the pace of consolidation by major players continues, it could shrink the playing field to such a degree that innovation will become the sole domain of a handful of companies who, for the most part, will only finance targeted research that promotes their own bottom line, and use patents to prevent others from advancing that technology in other directions. That may be a win for commerce but not necessarily for the type of unexpected discoveries that could improve our world in the future.

Sanjay Sanghoee is a political and business commentator. He has worked at investment banks Lazard Freres and Dresdner Kleinwort Wasserstein, as well as at hedge fund Ramius. Sanghoee sits on the Board of Davidson Media Group, a mid-market radio station operator. He has an MBA from Columbia Business School and is also the author of two thriller novels. Follow him @sanghoee.

TIME Innovation

Why Your Phone Is Suddenly Making Clearer Calls

VoLTE may be coming to a market near you soon. Here's an explainer to help you make sense of what it means, as well as what it doesn't.

VoLTE: It sounds like “volt,” and it stands for “Voice over LTE.” T-Mobile just announced it was rolling out VoLTE technology out in Seattle, and AT&T’s set to follow with a similar rollout today for areas in Illinois, Indiana, Minnesota and Wisconsin. Verizon’s due to roll the technology out “later this year.” And MetroPCS launched the technology way back in 2012.

But what exactly is VoLTE?

Today’s LTE networks use something called packet-switching, as opposed to the circuit-switching used by older, slower networks. Think of circuit-switching as a highway reserved for a single vehicle from start to endpoint, whereas packet-switching’s more like a giant highway shared by all kinds of vehicles. Without getting into the weeds, LTE networks can’t do voice and data simultaneously: LTE conveys data no problem, but your voice calls actually have to run over the old circuit-switched technology.

VoLTE is thus about bringing voice and data together on the same radio stratum. That’s important for several reasons, one of the most important being the ability, belatedly, for LTE users to do voice and data transactions simultaneously. If you’re an LTE user and you’ve ever tried to talk to someone while sending or receiving emails (technically impossible, unless the data portion’s being sent over Wi-Fi), or you finished a lengthy call only to find dozens of emails simultaneously attacking your mailbox, this probably matters to you.

But VoLTE’s being touted above all else for its ability to enhance the quality of voice calls with what the marketing departments have dubbed “HD Voice.” That’s in part because it’s similar to another acronym you’ve probably heard for years: VoIP, or “voice over IP.” VoIP is what you’re using when you make Skype or FaceTime calls. If you’ve ever made a Skype or FaceTime call and wondered why — when the connection’s solid on both ends, anyway — the audio quality’s so much more nuanced than in a regular voice call, you already have a sense for what’s coming with VoLTE.

The difference between VoLTE and VoIP is that VoLTE employs newer technology designed to guarantee if not infallible voice service, at least better voice service than any we’ve experienced to date.

The hangup — and this is true anytime you’re facing a costly technology overhaul that involves upgrades to your core infrastructure as well as the devices that access it — is that it’s going to take a while before we’re all enjoying VoLTE’s benefits, because older devices aren’t compatible with it. At launch, only T-Mobile users with LG’s G Flex, Samsung’s Galaxy Note 3 or Samsung’s Galaxy Light can access the service (after a software update). On AT&T’s side of the fence, only users with Samsung’s Galaxy S4 mini will enjoy VoLTE for now.

Furthermore, hypothetical VoLTE benefits, like video calls, voicemails and language translation in real-time, are likely a ways down the road. For all the buzz around VoLTE, and I agree wholeheartedly with FierceWireless’ Mike Dano here, it’s more in these initial stages about the carriers playing catchup (while, of course, trying to pass off what they’re doing as more than that) than revolutionizing voice-data tech.

Don’t confuse VoLTE with XLTE, by the way, another term that’s making headlines. XLTE is just the marketing buzz-cronym for a speed upgrade Verizon rolled out a few days ago to several hundred congested markets that lets newer devices hop between spectrums. The new spectrum’s like a brand new highway for those new devices. Devices that can’t use the new highway, meanwhile, enjoy faster speeds by virtue of all those newer devices being redirected to another road.

TIME directv

How the NFL Could Blow Up the AT&T-DirecTV Merger

Direct TV
Reed Saxon—AP

Forget the federal regulators—it’s actually NFL commissioner Roger Goodell who could have final say in whether AT&T’s proposed $48.5 billion acquisition of DirecTV comes to pass.

AT&T is trying to swallow up the satellite television provider to get access to its 20 million U.S. subscribers, large international footprint and healthy cash flow. But those American customers may start jumping ship if DirecTV fails to keep hold of its most valuable exclusive property, the National Football League’s all-you-can-watch Sunday Ticket package. DirecTV’s contract with the NFL for Sunday Ticket, which offers live coverage of every out-of-market game each Sunday, expires at the end of next season. In an SEC filing, AT&T revealed that if the deal is not renewed, it reserves the right to back out of the merger. DirecTV won’t be on the hook to pay AT&T damages for the botched deal as long as the company uses “reasonable best efforts” to woo the NFL.

For now, the merging companies say NFL negotiations are on the right track. On a conference call with investors Monday morning, DirecTV CEO Mike White said both he and AT&T CEO Randall Stephenson had already talked to Goodell and that negotiations for NFL Sunday Ticket should be completed by the end of the year. “I am still highly confident that we are going to get our deal done,” he said.

DirecTV pays about $1 billion per year for Sunday Ticket, which has around 2 million subscribers. The fact that football has been placed at the crux of this mega-merger will give Goodell significant leverage to ask for even more money at the negotiating table. The cost for Sunday Ticket could rise by as much as 40 percent to $1.4 billion, according to the Los Angeles Times.

TIME The Brief

AT&T Dials Up DirecTv

Welcome to #theBrief, the four stories to know about right now—from the editors of TIME

Here are the stories TIME is watching this Monday, May 19:

  • AT&T will buy DirecTV for $48.5 billion in an attempt to keep up with Comcast.
  • The United States formally charged Chinese military officials of economic espionage. This marks the first time the U.S. has charged state actors for explicitly acting at the behest of a foreign government in cyber crimes.
  • Flooding in the Balkans continues with heavy rains threatening to unearth buried land mines.
  • A holographic Michael Jackson came back from beyond the grave to perform at the Billboard Music Awards.

The Brief is published daily on weekdays.

TIME media consolidation

Critics Are Mercilessly Slamming the AT&T-DirecTV Deal

Public interest groups argue that none of the proposed mega-deals will benefit consumers

Prominent public interest groups criticized AT&T’s plan to buy satellite giant DirectTV in a deal worth about $48.5 billion, calling it an example of out-of-control media consolidation that will do little to benefit consumers.

AT&T’s proposed purchase of DirecTV comes as U.S. broadband leader Comcast is trying to convince federal regulators to let it buy Time Warner Cable in a $45 billion deal. That merger would combine the two largest U.S. cable companies.

“AT&T’s takeover of DirecTV is just the latest attempt at consolidation in a marketplace where consumers are already saddled with lousy service and price hikes,” Delara Derakhshani, policy counsel for Consumers Union, the advocacy arm of Consumer Reports, said in an emailed statement. “The rush is on for some of the biggest industry players to get even bigger, with consumers left on the losing end.”

AT&T will add its five million U-verse television subscribers to DirecTV’s 20 million satellite customers, in a deal 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 in a statement.

“The captains of our communications industry have clearly run out of ideas,” Craig Aaron, president and CEO of Free Press said in a statement. “Instead of innovating and investing in their networks, companies like AT&T and Comcast are simply buying up the competition.”

Both mergers will face intense scrutiny from the Justice Department, which is charged with ensuring the deal doesn’t violate antitrust laws, and the Federal Communications Commission, which must ensure that the tie-ups don’t harm the public interest.

DirecTV has the second largest pay-TV subscriber base in the country but lacks a competitive broadband Internet offering. AT&T is forging ahead with its own broadband plans but wants DirecTV’s satellite-TV business. “The industry needs more competition, not more mergers,” John Bergmayer, senior staff sttorney at Public Knowledge, said in a statement “The burden is on AT&T and DirecTV to show otherwise.”

Taking a page out of the Comcast-Time Warner Cable playbook, AT&T said it would abide by the FCC’s now-defunct 2010 Open Internet order for three years, in a concession aimed at winning over federal regulators. But that pledge rang hollow for some open Internet supporters.

“I don’t think the open Internet should come with an expiration date,” says Josh Stearns, a veteran public interest advocate. Interestingly, AT&T said it will use the merger to build and enhance high-speed broadband service to 15 million customer locations, in an effort “to be completed within four years after close.”

A combined AT&T-DirecTV would hold a vast swath of wireless spectrum — the public radio signals that make smartphones and tablets work — and would also be better positioned to compete against Comcast, the industry giant.

“AT&T already has overwhelming spectrum holdings relative to most of the wireless industry,” says Bergemeyer. “AT&T will need to explain how this merger wouldn’t harm wireless competition, and how whatever new services it plans to offer by combining with DirecTV would offset any harms to wireless and video competition.”

TIME mergers

AT&T’s $50 Billion DirecTV Buy Is Risky, Probably Not Great for You

The telecom giant will pay $48.5 billion in stock and cash as it looks to keep up with rival Comcast, but it's a risky deal that may not benefit consumers

I’m as guilty as anyone: Readers of business news hunger for big numbers. The bigger, the better. On that front, the $48.5 billion that AT&T said Sunday it will pay to buy DirecTV did not disappoint. Eat your heart out, Mark Zuckerberg.

In its announcement of the deal, AT&T threw out even more mega numbers. Toss in DirecTV’s net debt and the deal’s value rises to $67.1 billion. The combined company will have 26 million customers in the US and 18 million in the growing market of Latin America. AT&T even said it expects “cost synergies to exceed $1.6 billion on an annual run rate basis by year three”—whatever that means, but it has a ten-digit number in it, so it sounds impressive.

But there’s something about AT&T’s big numbers that grow stale quickly. The problem with big spending is, if you don’t put it toward something worthwhile, it’s just a waste. Time’s Sam Gustin noted on Twitter that the sum AT&T is spending on DirecTV could deploy a hell of a lot of gigabit-fiber service to homes that want it. Instead, it’s going to buy one more aging incumbent in the fast-changing TV market.

So once the transitory buzz of the large numbers ebbs, the strategy behind the deal will start to be scrutinized a bit more. And so far, the strategy seems to be: Well, Comcast has gotten big, so AT&T needs to get bigger too. This isn’t AT&T’s only recent big-ticket bid. In 2011, the company tried to buy T-Mobile USA from Deutsche Telekom for $39 billion, but that deal fell through after the Justice Department intervened.

Why is AT&T so keen to buy its way into growth? Because no matter how much blood the company tries to squeeze from its customers, the stock can’t break out of the flatline it’s been in for a while. As this graph shows, AT&T’s stock has risen less than 10% in the past two years. The S&P 500, during the same period, has risen more than four times as much.

Screen Shot 2014-05-18 at 7.20.45 PM

Some people have taken a look at the strategy behind the DirecTV purchase and not been kind in their conclusions. When rumors surfaced last week of a possible acquisition, analyst Craig Moffett suggested that the acquisition could be a distraction from an inevitable decline in AT&T’s growth. “When DirecTV begins to shrink, then the price paid will no longer matter,” Moffett wrote. “It will merely be another liability that AT&T will need to offset by growth somewhere else.”

Aging companies often make big acquisitions when facing a decline in their own businesses. In the best case scenario, the acquired company is snapped up at a discount and revives overall growth for years to come. More commonly, the big buyouts are merely attempts to buy time. Integrating incompatible operations for a couple of years, and providing excuses for large-scale layoffs. The smoke and mirrors works only for so long. Then another expensive deal is required to keep the ruse going.

The DirecTV deal is looking like it will fall into the latter camp–an expensive gambit that may at best offer growth and cost-savings in the short-term. Pay-TV has an uncertain future in an era where over-the-top offerings like Netflix and video consumption on mobile devices are seeing much stronger growth. DirecTV’s stock has quadrupled in the past five years, but there’s little reason to think growth will continue at anything close to that rate.

Moffett, who was a top-ranked analyst at Sanford C Bernstein & Co. before setting up his own research firm, put it more severely. “Like skid row junkies in the final wretched tremens of downward spiral, telecom/cable/satellite investors now appear to need a deal fix almost daily to stave off the messy crisis of incontinence that comes with the inevitable withdrawal.”

Other analysts speculated about AT&T’s motives for the deal, but few of them shared the sunny interpretations of the acquirer. The timing, coming after Comcast’s plans to buy Time Warner Cable, could be an attempt to piggyback on another telecom deal, one likely to win regulator approval. Or maybe Comcast sparked a merger mania in the telecom industry, with DirecTV the first to be snapped up. Sprint may be prompted to buy T-Mobile. Dish Network could also be in play soon.

In other words, no matter how you slice it, this deal has little to do with helping the consumer. Yet in announcing the deal, AT&T referred to the consumers who are its customers (19 times) nearly twice as often as it did its shareholders (10 times).

So far, the consensus is that DirecTV is unlikely to draw the regulatory criticism that T-Mobile did for AT&T. But AT&T isn’t taking any chances. The company took a $4 billion writedown after the T-Mobile deal fell through, most of it related to breakup fees. AT&T made clear today it wouldn’t pay a fee to DirecTV should regulators foil the deal this time.

That’s good for AT&T, but it adds an air of desperation to DirecTV. Another sign DirecTV wanted to sell quickly: Rumors of the deal last week put the price at $100 a share, but the actual deal is only $95 a share. DirecTV’s stock only rose as high as $86.90 on the $100-per-share rumor, reflecting the Street’s skepticism on the price. Some of that skepticism, it seems, was warranted.

For consumers, the bigger question is, when will these telecom mega-mergers end? Benefits from mergers are usually passed on to shareholders in the form of share repurchases or higher dividends. They rarely benefit customers—in fact, reduced competition in telecom has historically meant higher fees.

That’s why consumers should be wary of these big-ticket mergers. Don’t be too dazzled by the big, flashing numbers of the headlines. The more and the merrier the mergers grow, the more the consumer becomes an afterthought.

TIME Companies

AT&T is Buying DirecTV in $48.5 Billion Deal

The company confirmed that it will pay roughly $95-per-share in a stock-and-cash transaction based on AT&T's Friday closing price and officially acquire DirecTV in a deal worth approximately $48.5 billion

AT&T officially will acquire satellite broadcast provider DirecTV in a deal worth approximately $48.5 billion, the company confirmed Sunday, after weeks of rumors about an impending purchase.

AT&T will pay roughly $95-per-share in a stock-and-cash transaction based on AT&T’s Friday closing price, the company said in a release.

The deal will add DirecTV’s 20 million subscribers to the 5 million already signed up to AT&T’s U-verse television service, setting the buyer up to compete with television giants like Comcast. AT&T could also move its existing U-verse subscribers to DirecTV’s satellite network, freeing up precious spectrum for broadband Internet service.

The AT&T-DirecTV deal is sure to get a close look from regulators at the Federal Communications Commission, which would be concerned by media consolidation issues, and the Department of Justice, for antitrust matters.

This announcement comes as AT&T rival Comcast is trying to convince the very same regulators to allow it to buy Time Warner Cable in a $45 billion deal that critics call a blow to competition and consumer choice.

AT&T, however, reportedly plans to cozy up to regulators by framing its DirecTV buy as a move to expand Internet access in underserved areas, a longtime technology policy goal of the Obama administration.

TIME deals

AT&T Aiming at Comcast With Planned $50-Billion DirecTV Merger

A view shows the AT&T store sign in Broomfield, Colorado
Rick Wilking / REUTERS

AT&T wants DirecTV but the proposed $50 billion telecom deal, which would be the largest in years and reshape the television business at a time of rapid change in the industry, would pose headaches for regulators already mulling a Comcast merger with Time Warner Cable

AT&T, the deep-pocketed national telecom giant watching policymakers gnash teeth about the proposed $42-billion merger between Comcast and Time Warner Cable, is close to sealing the deal on a big corporate marriage of its own. It’s soon-to-be partner, according to multiple reports Monday: satellite giant DirectTV

The proposed $50-billion merger between the two tech titans—which would be the largest telecom deal in years—is not unexpected, but multiple reports indicate a deal is closer than ever, perhaps just weeks away. AT&T and DirecTV are aiming to reshape the TV business at a time of rapid change in the industry. The deal would be another example of the decades-long consolidation of the telecom and cable industries.

The Wall Street Journal, citing unnamed sources familiar with the matter, reports the two companies are discussing a deal that would involve a mix of cash and AT&T stock. Executives hope to hammer out an agreement in the next few weeks. DirecTV shares shot up nearly 6% in early trading Tuesday on the deal talk.

DirecTV has the second largest pay-TV subscriber base in the country but lacks a competitive broadband-Internet offering of its own. AT&T is moving ahead with its own broadband plans, but DirecTV’s satellite-TV business would be a major prize. AT&T, which is currently worth $185 billion, can definitely afford the deal.

A combined AT&T-DirecTV would hold a vast swath of wireless spectrum—the public radio signals that make smartphones and tablets work—and would also be better positioned to compete against Comcast, the industry Goliath.

U.S. broadband leader Comcast is currently trying to persuade regulators to let it buy Time Warner Cable in a $42 billion deal. That review will extend into next year, as would a review of a AT&T-DirecTV merger. Comcast’s proposed merger with Time Warner Cable, its smaller rival, already faces intense scrutiny from the Justice Department over competition concerns, not to mention the Federal Communications Commission (FCC), which must ensure the deal advances the public interest. An AT&T merger with DirecTV would face equally intense scrutiny.

If AT&T and DirecTV join forces, the deal could complicate the review of Comcast’s bid for Time Warner Cable, because antitrust regulators might want to consider both deals simultaneously, the New York Times reports. That might throw a screwball into the notoriously understaffed FCC office.

The Times also suggests the deal might be a strategic move to rattle Dish honcho Charlie Ergen, the legendary media operator who is also on the prowl for acquisitions. Industry watchers have been speculating about a Dish-DirecTV merger for years, but most analysts believe U.S. antitrust regulators would not allow the nation’s two largest satellite-TV firms to become one company.

That’s why AT&T wants to buy DirecTV.

AT&T also appears to be taking advantage of the simmering furor about “Net neutrality“—the principle that all Internet users should have open access to the Internet—as well as the Comcast–Time Warner deal, to float a $50 billion deal of its own.

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