Venezuelan Government Seizes AT&T Assets, Looks to Re-establish DirecTV Cable Service

The Texas-based multinational abandoned the country last week citing legal pressure caused by US sanctions.

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Soldiers guard the entrance to DirecTV’s commercial office in the Paseo Las Mercedes Shopping Centre in Caracas’ wealthy eastern district after the Supreme Court ordered the seizure of the company’s Venezuelan assets. (@FedericoBlackB / Twitter)
Soldiers guard the entrance to DirecTV’s commercial office in the Paseo Las Mercedes Shopping Centre in Caracas’ wealthy eastern district after the Supreme Court ordered the seizure of the company’s Venezuelan assets. (@FedericoBlackB / Twitter)

Mérida, May 25, 2020 (venezuelanalysis.com) – The Venezuelan government has begun seizing AT&T’s assets after the firm decided to abandon the country to reduce exposure to US sanctions.

At least three Caracas installations belonging to the US telecommunications multinational have reportedly been occupied by the state regulator CONATEL and the Bolivarian Armed Forces over the weekend, including its transmissions centre in Los Caobos, main administrative headquarters in El Rosal and principal commercial office in Las Mercedes.

The actions came on the heels of a Friday ruling by the Supreme Court’s Constitutional Chamber in favour of the “Customer Front in Defence of Communications Rights” consumer rights group.

As part of the verdict, CONATEL was authorised to take control of the Texas-based firm’s “property and goods, commercial offices, administrative headquarters, operational and transmission centres, antennas and any other equipment or installations.”

The judgement likewise ordered the body to re-establish the cable TV service immediately, as well as “protect workers’ rights.”

Similarly, a new ad-hoc board is to be named and presided over by CONATEL Director General Jorge Marquez. The Bolivarian National Guard brigadier-general also serves as minister for the presidential dispatch and was sanctioned by Washington in 2017.

In addition, the Supreme Court imposed a travel ban on the former directors of AT&T’s subsidiary in Venezuela, DirecTV, as well as the freezing of all personal assets. Banking regulators SUDEBAN were also instructed to halt all customer payments processed since the service was interrupted.

AT&T announced it was closing its DirecTV cable TV service in the country last Tuesday, citing a legal contradiction generated by the “impossibility to comply” with both Venezuelan law and US sanctions.

Venezuelan law dictates that cable and satellite providers are obligated to dedicate eight percent of their total programming to nationally broadcast channels, including state-run PDVSA TV and privately-held Globovision, both of which have been sanctioned by Washington. AT&T announced it was withdrawing from Venezuela of immediate effect, a decision which was taken without consulting local management, to avoid exposure to US Treasury Department punitive measures.

The closure of DirecTV has reportedly impacted over two million Venezuelan households and 600 employees. The firm, which had been operating in Venezuela for 24 years, held a 45 percent share of the local market and offered 300 channels.

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Estimated market shares for cable TV according to CONATEL. (@puzkas / Twitter)
Estimated market shares for cable TV according to CONATEL. (@puzkas / Twitter)

President Nicolas Maduro was quick to point the finger for the closure at opposition leader Juan Guaido on Sunday, alleging that he had worked with Washington to “pressure” DirecTV into “eliminating people’s right to information and entertainment.” In March, Maduro banned all telecommunications firms, as well as other service providers, from cutting off customers for six months as part of a series of protective measures under the COVID-19 lockdown.

In response to the accusations, Guaido claimed that AT&T’s move was caused by government “censorship” rather than US sanctions.The US firm’s communique made no mention of Venezuelan government pressure. Guaido also went on to suggest that his team was “fighting” to reactivate the cable service by redirecting it from abroad, where the service costs significantly more.

Analysts have received CONATEL’s seizures with mixed reactions, with some calling them “symbolic” and others pointing out the complexities of having an ad-hoc board led by a sanctioned Venezuelan government official reactivate a service which contracts TV channels, satellites and technological infrastructure owned and based in the United States.

However, the issue has dominated headlines as millions spend their eleventh week indoors as part of the COVID-19 lockdown.

On Sunday, 111 new cases were identified, 93 of which were reportedly related to migrants returning from Colombia or Brazil. As a result, the government has unveiled plans to “strengthen” quarantine camps on the country’s borders, where returning Venezuelans are obliged to observe a 14-day quarantine period.

Despite the recent surge in cases, on Sunday Vice President Delcy Rodriguez also informed that the government is “evaluating” an easing of the lockdown, with hardware stores, dentists and some banks highlighted for potential reopening. At the time of writing, Venezuela has 1121 identified coronavirus cases after carrying out a reported 804,000 tests.