AT&T has defended its offer of zero-rated data for wireless customers who stream DirecTV on their mobile devices against a regulatory inquiry, saying the model benefits consumers and is well within the framework of the FCC’s 2015 Open Internet Order.
According to a letter submitted to Wireless Telecommunications Bureau Chief Jon Wilkins on Monday in response to the FCC’s recent concerns around its mobile video and zero-rated data models, AT&T countered the offers were “precisely the kind of pro-consumer challenges to cable that the Commission heralded in approving AT&T’s acquisition of DirecTV.”
“Cable providers have built-in advantages as a result of which they still supply the majority of pay TV subscriptions and fully 85 percent of Internet connections that the Commission considers broadband,” AT&T Senior Executive Vice President of External and Legislative Affairs Robert Quinn wrote. “In fact, during the first three quarters of 2016, telcos lost 475,000 broadband subscribers while cable added 2.44 million. DirecTV’s sponsorship of that content through Data Free TV allows DirecTV to better compete against the cable incumbents by ensuring that its subscribers receive the mobile video experience they increasingly demand in the most consumer-friendly manner possible.”
Quinn said nearly three million consumers have already embraced AT&T’s Data Free TV program and noted the number of DTV Everywhere streams per month has tripled year over year. The carrier said it is planning to expand the availability of mobile TV steaming even further with the launch of its DirecTV Now app next week, which will include zero-rated data for AT&T customers.
In the letter Quinn stressed that offerings like DirecTV Now and zero-rating are disruptive forces in the marketplace that benefit consumers and, allegedly unlike the programs offered by “others,” adhere to the guidelines laid out in the Commission’s net neutrality order. AT&T said the FCC’s questions about its own offerings felt targeted given the variety of other sponsored and zero-rated data programs out in the open.
“It thus is perplexing that the Wireless Bureau would raise ‘serious concerns’ about AT&T’s – and only AT&T’s – sponsored data program,” Quinn wrote.
Contrary to misguided beliefs, Quinn said, Data Free TV, while free to consumers, is not free to AT&T – the carrier expects it will have to make “capital-intensive” investments to meet the boost in data usage on the network as adoption of video streaming from those programs grows. Quinn also said suggestions that AT&T’s zero-rated offer disadvantages online video players aiming for AT&T customers is “off-base.”
“Any unaffiliated content provider can participate in AT&T’s Sponsored Data program on the same terms and at the same rate as DirecTV, and the sponsored data rate is as low as the market based rates AT&T currently offers even to wireless resellers who commit to significant purchase volumes,” Quinn argued.
Quinn said he hoped his response would lay the issue to rest, but invited the FCC to contact him with further questions.
The back-and-forth comes just ahead of AT&T’s anticipated launch of its new DirecTV Now mobile video streaming app on Monday, Nov. 28.
The app – which will be available to customers of all wireless carriers with zero-rated data for AT&T subs – will include more than 100 channels for $35 per month, AT&T CEO Randall Stephenson has said.
Though further details about which channels will be included have been scant, AT&T this week said it signed an agreement with Fox Networks Group to extend the Fox portfolio across DirecTV products – including DirecTV Now. Programming included in the agreement will extend to Fox News Channel, Fox Business Network, FX, FXX, FXM, FS 1, FS 2, Big Ten Network, 18 Fox regional sports networks, National Geographic, and Nat Geo Wild.