AT&T unfazed by zero-rated data concerns as it intros DirecTV

AT&T made very clear Monday that its upcoming DirecTV Now offering is all about mobile. And the carrier isn't concerned that zero-rating content for its wireless subscribers will draw much attention from federal regulators.

The nation’s second-largest mobile network operator staged a high-profile event to officially take the wraps off its OTT offering, which will launch Wednesday and start at $35 a month for 60 channels. The offering will be viewable on a wide variety of connected devices and digital platforms, but smartphones and tablets are clearly AT&T’s top priority.   

“We developed this with a mindset that it had to be mobile,” said John Stankey, CEO of AT&T Entertainment Group. “This is the first product we’ve ever really done that way, where the whole UI context is done mobile-first, ensuring that every piece of content that we sell to the customer can be used not only in a mobile environment but also used in a living room.”

AT&T also introduced FreeView, which offers exclusive video content from specific providers with no charge to end users, and Fullscreen, a $6-a-month on-demand video service that will be available free to existing and new wireless subscribers with eligible plans.

“We want to bring content to all of our wireless customers,” said Brad Bentley, chief marketing officer at AT&T Entertainment and Internet Services. “This is part of seamlessly bringing wireless connectivity and entertainment together.”

Part of that strategy is enticing wireless users to switch to AT&T and stick with the carrier by zero-rating the content for subscribers. While DirecTV Now is available across networks and platforms, AT&T customers can watch without data coming out of their monthly allotments, as AT&T CEO Randall Stephenson had previously disclosed. The zero-rating strategy does not apply to Cricket customers, however.

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“One of the other things about unleashing television is that consumers don’t know how much data they’re using. They don’t want to hit their caps and they don’t want to think about it,” Bentley said Monday. “The last thing you want to do when you’re binging or enjoying entertainment is trying to calculate how many gigs I’m using and where I am on my data plan.”

Indeed, mobile carriers are increasingly offering zero-rated content in an effort to differentiate themselves from the competition. T-Mobile was the first to do so with Music Freedom and Binge On, which enables users to consume music and video without it counting against their monthly data allotments; every other major wireless operator in the U.S. has also brought zero-rated content to market in one form or another.

Some critics have said zero-rated data may run afoul of net neutrality principles because it can give some content providers an advantage over others. The FCC has yet to intervene in carriers' policies regarding zero-rated data, but has said it continues to monitor the issue.

AT&T didn’t address such concerns during Monday’s prepared presentation, but one top executive said in September that the carrier had “no regulatory concerns about” zero-rating content for its own subscribers. Meanwhile, President-elect Donald Trump named two FCC advisers last week who have both voiced objections to the net neutrality principles that have been a top priority for the commission under the Obama administration. So it’s likely AT&T is even more comfortable offering zero-rated content than it was just a few weeks ago.