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FairPoint says its DirecTV deal wouldn’t be affected if AT&T buys satellite service

By Staff | May 20, 2014

Given the news that AT&T is making a bid to buy DirecTV, local FairPoint customers may be wondering what that means for them.

New Hampshire’s biggest telephone company uses the satellite television system DirecTV to complete its service bundle – one bill that covers telephone, Internet and TV service.

FairPoint has been providing this bundle since 2009 to compete with “triple play” bundles from Comcast and other cable providers, including Charter Communications in Hollis and Brookline, which added telephone service last year.

But AT&T announced plans to buy DirecTV for $48.5 billion in stock. Assuming the purchase is approved by federal regulators, AT&T might use DirecTV like FairPoint did – as a quick way to provide television to create a service bundle.

In that case, wouldn’t AT&T want to take away that advantage from FairPoint, which is a tiny phone company in most of the country but a big competitor in Northern New England?

No, says FairPoint.

“We do not anticipate any changes to our relationship with DTV based on this announcement,” FairPoint spokesman Jeff Nevins emailed in response to a Telegraph query.

AT&T owns a cable TV/Internet/voice service called U-Verse in the South and Midwest, and in parts of Connecticut, with about 5 million customers, but has no equivalent business in New England. If it gets DirectTV, AT&T would become the country’s second-biggest pay TV provider, behind only Comcast.

Some analysts have said a major appeal of DirectTV to AT&T is that its 20 million customers gives AT&T more clout with movie and TV production studios when negotiating for video content to stream over its wireless Internet service. If so, then FairPoint’s DirecTV deal would probably not be affected.

“The one missing element to DirecTV’s premium business over the last 4½ years is owning our own two-way broadband pipe into the home and being able to offer a bundle to customers with a single bill,” DirecTV Chairman-CEO Michael White said on a conference call. “Not only will we be able to market DirecTV service into AT&T’s 70 million (wireless) customer locations but also across their nationwide 4G LTE wireless network and their nearly 100 million subscribers.”

TV is vital to FairPoint as a tool in the increasingly complicated telecommunications wars, where boundaries between TV, landline phones, Internet service and wireless phone have become blurred.

For example, roughly half the landline telephones in New Hampshire are provided by Comcast and other cable companies, which added voice to their modem service some years back.

It can get even more complex: FairPoint’s service bundle includes electricity bills – via a separate company that uses the FairPoint name and customer base – while Comcast’s bundle includes home security and tentative forays into remote home automation over the system’s cables.

FairPoint flirted with developing its own TV service for a while. In 2009 it ran a test in Portsmouth for people connected to its fiber-to-the-home broadband Internet service called FAST.

The company provided the free TV service to customers who agreed to fill out surveys – and who also agreed to complete confidentiality, squelching The Telegraph’s plans to provide a running blog about it from a then-Portsmouth-based editor.

FairPoint was considering something along the lines of Verizon’s FiOS TV over its fiber-to-the-home service. (FairPoint’s FAST consists mostly of the portions of FiOS that Verizon sold to FairPoint when it left landline service in Northern new England in 2008.)

The results of FairPoint’s big focus group apparently weren’t great from a business point of view, because the company ditched the plans and stuck with its satellite TV offering.

The AT&T-DirecTV deal comes on the heels of another proposed mega-deal, a merger between Comcast and TimeWarner cable firms, and possible consolidation among wireless telephone services.

David Brooks can be reached at 594-6531 or dbrooks@nashua
telegraph.com. Also, follow Brooks on Twitter (@GraniteGeek).