Ever since AT&T announced that it was launching a $35 TV plan with unlimited mobile streaming for AT&T customers, the FCC has been all over the company’s case.
In a first letter, the FCC laid out its problems with AT&T’s “zero rating” policy and how it violates the principle of net neutrality. In a response, AT&T said (paraphrasing a little here) “nah, we thought about it, but it’s all good.” The FCC’s response? Not so fast.
In a letter seen by Ars Technica, the FCC takes issue with AT&T’s zero-rating of data for DirecTV, saying that AT&T’s “practices inhibit competition, harm consumers, and interfere with the ‘virtuous cycle’ needed to assure the continuing benefits of the Open Internet.”
At stake here is AT&T’s policy of “zero-rating” data used to stream its new DirecTV Now service. AT&T customers streaming DirecTV Now over AT&T’s network won’t use their data cap to do so, something that AT&T has been selling hard in adverts for its new service. But preferring one kind of data over another undermines the key tenent of net neutrality, which is that all data should be treated equally.
T-Mobile already walks a fine line with its “Binge On” policy, which allows users to stream shows from services like Netflix and YouTube without it counting against data. The only saving grace for T-Mobile is that the plan is free for content providers; YouTube and the like just have to work with T-Mobile to make sure their data is optimized for mobile streaming.
In the case of AT&T, there’s no free offer for other providers. AT&T says that DirecTV pays for any mobile data used to stream DirecTV shows, but the FCC strongly disputes that claim. In the letter seen by Ars, the Commission lays out its concerns:
“We estimate for purposes of illustrating our concerns that an unaffiliated mobile video service provider would have to pay AT&T $16 a month to offer zero-rated service to a customer who uses just 10 minutes of LTE video per day, increasing to $47 for a customer using 30 minutes per day,” the FCC wrote. “These costs alone would represent 46 percent to 134 percent of DirecTV Now’s $35 retail price, against which third parties will be competing for AT&T Mobility customers, and would be borne in addition to all other costs of providing service by the unaffiliated provider.”
In other words: no way is DirecTV Now paying the full wholesale price for that data.
This isn’t the final decision from the FCC. The Commission has requested more concrete data from AT&T by December 15th in order to finalize its review.
But whatever the FCC says right now probably won’t matter. President-Elect Trump will have control, at least through appointments, over the FCC, and his telecommunications advisers are strongly anti-net-neutrality and against the very existence of the FCC. This may well be a calculated move by AT&T to run out the clock on the Obama administration until the new regime takes charge.