AT&T this week filed a "public interest" statement with US regulators describing the benefits of its proposed $48.5 billion acquisition of DirecTV.

Better prices are in the offing, the company claims, saying, "There will be significant downward pressure on the prices of the new integrated bundles of AT&T broadband and DirecTV video." AT&T argues that its ability to offer cheap bundles will force cable companies to lower prices.

As a downside, there could be "upward pressure on the prices of standalone video or broadband offered by the merged firm," but AT&T claimed it "will be significantly outweighed by the downward pressure on the prices of bundles of AT&T broadband and DirecTV video that will now be available at improved quality and attractive prices."

AT&T also promises to offer a standalone 6Mbps broadband offering in its wireline territory for $34.95 a month in the three years following the transaction, with price increases limited by inflation as measured by the Consumer Price Index.

By contrast, Comcast bluntly said prices wouldn't go down after it announced a deal to purchase Time Warner Cable. "We're certainly not promising that customer bills are going to go down or even increase less rapidly," Comcast Executive VP David Cohen said at the time.

But of course, the biggest benefits of the merger will go to AT&T itself. In particular, AT&T's new filings with the Securities and Exchange Commission say that AT&T's U-verse video offering has been a failure and can't compete against Comcast and Time Warner Cable. Here is an executive summary, key talking points, a much longer filing, and attachments (the last two are not for the faint of heart).

"AT&T has world-class wireline and wireless broadband facilities, but its video service, which is available in only a minority of customer locations within AT&T’s 22-state incumbent local exchange carrier ('ILEC') region, is uneconomic and not fully competitive with cable providers," the company said.

AT&T only provides U-verse video where it has fiber-to-the-node or fiber-to-the-premises, the company said. "As a result of its relatively limited video footprint, AT&T is far smaller than Comcast and Time Warner Cable, its principal competitors," it said. "Lack of scale particularly hinders AT&T with respect to content acquisition, which is by far the largest variable cost of MVPD [multichannel video programming distributor] service. AT&T therefore faces challenges selling competitive broadband/video bundles even inside its U-verse video footprint."

Although AT&T lags behind Comcast in Internet and video subscribers, it has double Comcast's overall revenue. AT&T made $128.8 billion in revenue last year compared to Comcast's $64.7 billion. Left unsaid is that AT&T bears responsibility for making U-verse available only in "a minority of customer locations," by choosing to slow down and limit its fiber deployment, until AT&T announced a recent expansion.

AT&T harmed by lack of programming competition

The lower prices AT&T says it will be able to offer are largely because of improved negotiating power that will lower its per-subscriber cost of programming by at least 20 percent. AT&T said it is suffering from a lack of competition in the programming market, and it pointed out that some of the biggest content suppliers are affiliated with some of the biggest pay-TV providers. Comcast's ownership of NBCUniversal is probably one of the main affiliations AT&T is referring to here.

AT&T wrote:

Content is the most critical—and largest—variable cost for MVPDs. Per-subscriber content costs continue their long upward climb. In recent years, they have regularly outpaced inflation. With the most popular content increasingly concentrated in the hands of a few companies (including those affiliated with some of the largest MVPDs), those suppliers have the leverage to demand higher and higher fees with each passing year. Distributors must accede to these demands or risk losing customers, credibility, and competitive position. These rapidly increasing content costs have a disproportionate effect on providers with smaller subscriber bases, including AT&T. This transaction will create a combined entity with a much larger subscriber base than AT&T currently has and thus offer much more value to programmers. That, in turn, should result in lower content costs.

U-verse had 5.7 million subscribers at the end of Q1 2014 compared to Comcast's 22.6 million and Time Warner Cable's 11.4 million. DirecTV has 20.3 million video subscribers, but it also has limitations that will be solved by the merger, AT&T argued.

"DirecTV is a premier standalone multichannel video programming distributor with a national footprint, outstanding content, and a long tradition of innovation and expertise in video. DirecTV, however, has no broadband capabilities," AT&T wrote.

The merger will let the combined company sell "an integrated and efficient bundle of high-speed broadband and high-quality video from a single provider." AT&T has 16.4 million Internet customers.

In addition to wired Internet, AT&T offers LTE-based home broadband ("fixed wireless"). Although AT&T has a nationwide cellular network for mobile devices, the company's fixed wireless doesn't extend nationwide. In November 2012, AT&T promised "high-speed" wired or fixed wireless Internet to "99 percent of customer locations" in its 22-state wireline service area.

AT&T now promises that the DirecTV merger will result in fixed wireless broadband for "13 million largely rural customer locations... These locations will be spread across 48 states both in and out of AT&T's wireline region." Including these wireless locations, AT&T says it will eventually offer "high-speed fixed broadband" that covers 70 million customer locations. With DirecTV in tow, AT&T will be able to sell more bundles of Internet, VoIP service, and video.

AT&T has also claimed the merger will let it bring fiber-to-the-home to an additional 2 million customers, but it's still not clear exactly how many locations would get AT&T's fiber in the absence of the merger.

In making the case for the merger, AT&T pointed to a statement by Netflix Chief Financial Officer David Wells. The CFO said AT&T offering broadband in additional locations "would be a plus for Netflix, I think."

To further sweeten the pot, AT&T promised to adhere to the FCC's network neutrality rules from 2010 for three years, even though those rules were vacated by a court ruling.

The AT&T/DirecTV merger will face review by the Federal Communications Commission and Department of Justice. AT&T expects to complete the deal by May 2015.