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from Breakingviews:

AT&T puts shareholders on hold for DirecTV

By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

AT&T is putting its shareholders on hold to buy DirecTV. Its $67 billion acquisition of the satellite TV operator announced on Sunday brings with it an unexpectedly robust $1.6 billion of cost savings. Even so, these don’t quite cover the cost of the premium. In any case, AT&T says it will use the money to roll out rural broadband service. Customers and regulators are getting the first call.

A little more than three years after AT&T launched an eventually torpedoed $39 billion bid for T-Mobile US, it has found another acquisition target big enough to match its ambitions. Instead of expanding in domestic cellular, though, the $190 billion company led by Randall Stephenson is aiming to marry video and broadband as the competitive landscape for television and internet service reshapes for the mobile and digital era.

The deal math suggests AT&T is paying over the odds for its quarry. The synergies AT&T expects from the deal, mainly from cheaper TV programming, amount to a present value of roughly $10 billion. The $95-a-share purchase price represents 30 percent more than where DirecTV stock was trading in late March before a news report indicated it might be bought. So the $11.2 billion premium exceeds the value of the savings.

In what looks like a bid to appease regulators, though, AT&T is pledging to use the money saved to provide high-speed internet service to 15 million locations mostly outside urban areas. Much of it will probably be fixed wireless, which is slower than fiber but also much cheaper to install.

Why your cell phone is ripe for spam texts in 2012

In the late 1970s, the cutting edge of communications technologies was the autodialer, a machine capable of calling up scores of people in one shot, with little human involvement. It was innovative, and annoying. By the early ’90s, Congress had had enough. “Computerized calls,” railed South Carolina Democrat Fritz Hollings from the Senate floor, “are the scourge of modern civilization.”

And so, Congress legislated. But the focus was on commercial calls. Mindful of the free flow of speech and – let’s be honest – interested in self-preservation, lawmakers exempted political calls from its Telecommunications Consumer Protection Act. But Congress decided that some phones were too sensitive to get even autodialed political calls: those in hospitals, those designated for emergency purposes – and those in our pockets.

But here we are, some two decades later, and voters across the country are getting political text messages they never asked for.

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