The regulatory chief of AT&T has responded to the criticisms raised by the FCC by stating that their sponsored data and zero rating plans are providing the “benefits to consumers and competition”, which the Commission said they wanted a few months ago. Senior executive VP of external and legislative affairs for AT&T, Bob Quinn responded to the letter from FCC by adding, “These initiatives are precisely the kind of pro-consumer challenges to cable that the Commission heralded in approving AT&T’s acquisition of DirecTV.”
Quinn argued that the Data Free TV plan offered by AT&T would allow their subscribers to access and stream the company’s latest streaming service, DirecTV Now, on their mobile devices without disturbing the monthly data allotment of the subscriber. He said that this offering is crucial for the telecom company, as it helps them to remain competitive in the market.
“Cable providers have built-in advantages as a result of which they still supply the majority of pay-TV subscriptions and fully 85% of internet connections that the Commission considers broadband. In fact, during the first three quarters of 2016, Telcos lost 475,000 broadband subscribers while cable added 2.44 million,” Quinn said.
He further added, “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. Indeed, industry observers have observed that the pay-TV business finally looks like it’s about to get seriously disrupted by the internet. They have referred to DirecTV Now as a ‘bombshell’ and AT&T as the video ‘insurgent’.”
Quinn commented that, “Data Free TV is certainly not free to AT&T. As more and more consumers discover the benefits of that service, AT&T will see escalating usage on its mobile network, where video already accounts for a clear majority of traffic. AT&T will need to respond to those new usage demands by making capital-intensive investments, which will add to the billions AT&T has already spent to keep up with skyrocketing mobile video usage.”
He also said that other video distributors can also export this feature to their offerings and added that, “The suggestion that Data Free TV creates ‘significant disadvantages’ for online video distributors who wish to reach AT&T’s wireless subscribers is likewise 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 concluded.