• by Wendy Davis , Staff Writer @wendyndavis, September 17, 2014

Advocacy group Public Knowledge is warning the Federal Communications Commission that AT&T's proposed $49 billion merger with DirecTV would give the company a big incentive to block competition from online video providers.

The organization is calling on the FCC to block the merger. The group adds that if the deal isn't nixed, the FCC should at least impose a host of conditions on AT&T -- including that it follow open Internet principles.

“AT&T’s proposed purchase of DirecTV would create direct consumer harm in the pay TV and online video marketplaces,” Public Knowledge argues in a filing with the Federal Communications Commission. “If AT&T, a national wireless and regional wireline broadband provider becomes a larger player in the pay TV market, its incentive to discriminate against online video services would increase.”

The organization suggests that one way of dealing with that concern is by prohibiting AT&T from discriminating in how it delivers Web traffic. Public Knowledge also wants the FCC to prohibit AT&T from prioritizing its own video services over those of competitors, and to prohibit AT&T from exempting its own services from data caps.

If the FCC reclassifies broadband as a utility -- as numerous net neutrality advocates are urging -- those conditions might apply regardless. But even if the FCC doesn't recategorize broadband service, the agency could require AT&T to follow the conditions, at least in the short-term.

Public Knowledge isn't the only group to express concerns about the deal. Advocacy organization Free Press also weighed in against the merger.

Among other criticisms of the deal, the group takes aim at AT&T's statements that the deal would spur greater investment in broadband, allowing it to roll out wireline and wireless service to 15 million more people.

"Actual network investment would be a much better use of the billions that AT&T proposes to spend on this merger,” Free Press says.

The group adds that AT&T previously said a proposed merger with T-Mobile would enable it to expand its LTE network. But after the merger was blocked, AT&T still rolled out LTE service to 300 million people.

"The Commission should greet with deep skepticism anything AT&T says about what a merger approval will 'enable' or 'allow' the company to do,” Free Press says. “When AT&T dangles the promise of broadband deployment to 15 million customer locations, the Commission should do everything within its power to first determine what AT&T’s existing plans were prior to striking a deal with DirecTV, and then it should conduct an analysis of what AT&T would do if this new transaction fails to close too.”