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AT&T buys Time Warner for $85 billion

A major communications and media deal was signed Saturday night. Telecommunications giant AT&T has agreed to an $85.4 billion price to buy media producer Time Warner, according to Reuters.

Reuters reported that the terms are accepted and the final agreement signed. Combining telecommunications with content is the logical step as more the traditional cable television industry sees its business slip away to online services. The agreement is subject to federal approval and AT&T expects it to close by the end of 2017.

TICE (The Internet Changes Everything), the online catchphrase since the late 90s, has taken longer than anticipated to push cable television aside. As fiber optic and other gigabit internet technologies spread at an increasing rate, there’s no rational case for cable boxes. A 5 megabit per second online connection, at only 0.5 percent gigabit speed, suffices for most streaming video content.

Time Warner’s content includes the HBO, CNN, TBS, TNT networks as well as Warner Brothers film studio and 10 percent of the Hulu streaming video service.

AT&T bought DirecTV in 2015, but that was a short-term strategy because satellite dishes will go the way of cable boxes. AT&T is building out its own gigabit internet infrastructure at the same time another big change is coming for the wireless provider, 5G.

Rich Tullo, research director of Albert Fried & Company said, “We think 5G mobile is coming, we think 5G mobile is an epic game-changer.” For wireless content, 5G will enable content download at speeds up to 10 gigabits per second, more than enough to download full HD films in just a few seconds, according to Gizmodo.

So if AT&T continues to build out its gigabit internet network and embrace 5G wireless as rapidly as it can, having a rich media catalog on hand will position the company for greater growth than ever.

This article was originally published on 10-22-2016. It was updated by Bruce Brown on 10-23-2016 to reflect the deal had been agreed to and signed.