AT&T Already Backing Off Its Biggest Time Warner Merger Promise: Cheaper TV

from the wink-wink-nudge-nudge dept

AT&T has spent the last few months fending off critics of its planned $100 million acquisition of Time Warner. Most critics say the company’s ownership of Time Warner will make it harder for streaming competitors to license the content they need to compete. Others warn that AT&T’s decision to zero rate (cap exempt) its own content gives the company’s new DirecTV Now streaming TV service an unfair advantage in the market. That’s before you get to the fundamental fact that letting a company with the endless ethical issues AT&T enjoys get significantly larger likely only benefits AT&T.

Responding to these criticisms, AT&T CEO Randall Stephenson spent the last few months repeatedly insisting that critics have it wrong, because the merger was allowing the company to introduce a new streaming video service that provides 100 channels of TV for just $35 per month:

“I’m not surprised [by the criticism]. They’re uninformed comments,” Stephenson said in response to a question from Wall Street Journal editor Rebecca Blumenstein at the newspaper’s WSJDLive Conference. “Anybody who characterizes this as a means to raise prices is ignoring the basic premise of what we’re trying to do here, again a $35 product we bring into the market.”

That $35 price point was used again and again by AT&T lobbyists and executives in selling the deal before Congress, the company insisting that only this new mega-merger could possibly make this kind of offer possible. Stephenson at several points proclaimed that the lower-cost option was “a way to drive pricing down in the marketplace,” — a surefire example of AT&T’s dedication to intense video competition.

It’s ironic then that the company is already backtracking and raising rates on its new streaming TV service.

As it turns out, that $35 for 100 channel offer was only a limited-time promotion. AT&T has already jacked the price of the service up to $60 per month as of January 9, and the company is already indicating that pricing for all of its streaming TV service tiers (despite now owning Time Warner content) will be going up sometime in the near future:

“After Jan. 9, new subscribers who sign up for DirecTV Now?s Go Big tier with after Jan. 9 will pay $60 per month. Existing subs will continue to pay the $35-per-month rate for now, but the company also said the fees may increase at some future date. In addition, ?channels, features, and terms (are) subject to change & may be discontinued without notice,? AT&T said in a notice on the DirecTV Now website.”

And this comes as the outgoing FCC is clearly warning that AT&T is using usage caps to give this new content an unfair advantage over streaming alternatives. So while AT&T is busy claiming the Time Warner Merger will help it disrupt and compete with traditional cable, it’s clear AT&T executives are more interested in building cable 2.0: the same old anti-competitive shenanigans and TV price hikes we all know and love, just with a shiny new layer of public relations paint. AT&T has a long history of bogus promises to get big deals approved, but it’s rare to see the company already falling short on its promises before the ink is even dry.

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Companies: at&t, directv, time warner

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Comments on “AT&T Already Backing Off Its Biggest Time Warner Merger Promise: Cheaper TV”

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47 Comments
Anonymous Coward says:

Re: Re: Re: talk is cheap

get some spine and boycott ATT?

I know its tough, I boycott myself, but it makes for little progress if everyone else accept defeat.

ATT will not last long if there is big enough boycott or large enough campaign by the citizens to end the government blessed monopolies.

I.T. Guy says:

Re: Re: Re:2 talk is cheap

“I boycott myself” LOL’d at y00. Even y00 hate y00.

“I know its tough, I boycott myself, but it makes for little progress if everyone else accept defeat.”
That makes it sound as if YOU DO have AT&T.
“if everyone else accept defeat” One win at a time right Brah? Start a movement, be the first. DO SOMETHING. My guess is that you will DO NOTHING. Other than come here to hypocritically berate users. But do go on because it’s mildly entertaining.

That One Guy (profile) says:

Re: Re: Re:2 Talk is indeed cheap, almost as cheap as calling for the impossible

So I’m curious, what bit of magical shenanigans are you using to connect to the internet without going through a company like AT&T?

Boycotting an ISP sounds great on paper, but as several articles have demonstrated with the ‘highly competitive’ internet service available in america(which is bound to get even more competitive in the next few years) it’s simply not feasible for vast numbers of people to do so, who are presented with the options of ‘Pay scummy ISP for internet service’ or ‘Don’t have an internet connection, at all.’

Now, it’s nice that you can boycott internet service entirely(which again brings up the question of how exactly you’re posting here), but for many that’s simply not a reasonable or acceptable action, and with no alternative available to go to a boycott is simply not feasible, as effective as it might be.

Anonymous Coward says:

Re: Re: Re:3 Talk is indeed cheap, almost as cheap as calling for the impossible

your argument is familiar.

Every time I propose “boycott or bend over” I hear the same arguments: Who do you think you are, using the internet to tell me to boycott the internet.

Look, a successful boycott requires at least 3 things: significant numbers, organization and (gasp) SACRIFICE.
No one wants to sacrifice. Look at a historical successful boycott–> the Montgomery Alabama Bus Boycott. The boycotters had an ORGANIZED/UNIFIED GOAL: end the Jim Crow laws in Alabama. Those willing to boycott our local ISPs need an ORGANIZED/UNIFIED GOAL: end local ISP monopolies. If we can have competing gas stations, with their required-in the ground infrastructure, then we can also have competing ISPs with their in the ground, on the poles, and on the towers infrastructure.
Next, we the boycotting consumers need to SACRIFICE. Again, the Montgomery bus boycotters still had to work and eat during the boycott. Some of them walked to work (SACRIFICE), some carpooled (SACRIFICE), and unfortunately some even lost their jobs (SACRIFICE). That sucked, but in the end they achieved their goal of ending the stupid Jim Crow laws on the public buses in Montgomery Alabama. I find it hard to believe that some/most of us can’t SACRIFICE broadband internet access through our local ISP monopolies for slower/less reliable wireless broadband through a local wireless carrier during this boycott.

In the end, if we are unwilling to stop paying our local ISP monopolies to take advantage of us, then we’re going to continue in the downward cycle of higher rates and lower service. Instead of just throwing our hands up in frustration on this forum, we could get together (strength in numbers), write out a simple goal (local ISP competition among all national ISPs in all major US cities), and sacrifice by using inconsistent wireless phone companies for internet access during our boycott of these local ISP monopolies.

I don’t know everything, and I’m sure I’m missing some points, but at least I’m proposing something positive. What about you?

That One Guy (profile) says:

Re: Re: Re:4 Talk is indeed cheap, almost as cheap as calling for the impossible

No one wants to sacrifice. Look at a historical successful boycott–> the Montgomery Alabama Bus Boycott. The boycotters had an ORGANIZED/UNIFIED GOAL: end the Jim Crow laws in Alabama.

A problem which could be fixed literally overnight simply by removing the law from the books, which is very much not the case when it comes to ISP monopolies, effective or actual.

Take the cases where you’ve literally got the ISP’s writing state laws to keep out competition for example. Say you successfully boycott that long enough to get the law removed, you’re not going to get a competing service to show up overnight, which means you’re right back to paying the scummy company until that happens, something you can be sure they’d know full well.

I find it hard to believe that some/most of us can’t SACRIFICE broadband internet access through our local ISP monopolies for slower/less reliable wireless broadband through a local wireless carrier during this boycott.

And if that alternative does not exist, or is from the same company you’re trying to boycott, what then? Just do without the internet entirely for several months(at least)?

Boycotting a form of transportation still leaves you with alternatives as you yourself noted, but when it comes to the internet that’s really not the case, especially given the problem is the current monopoly/duopoly in the market. You either get service from the scummy companies or you don’t get it, period, in far too many areas.

Should there be competition? Absolutely. Should the laws prohibiting that competition written by the companies be removed? Very much so. Would competition be the ‘best’ way to keep companies honest and offering actual service for decent prices? Almost certainly. Is the above as simple as removing a bad law(or several as the case may be)? No, though that would certainly be a good start.

My point is that it’s complex and not something that’s going to be easily changed, and given the problem is about the lack of choices completely doing without internet for months is simply not a viable option for many, making the calls for a boycott unreasonable, even if I can understand and support the sentiment behind it.

Anonymous Coward says:

Re: Re: Re: talk is cheap

It’s amazing how much you think you know.

People vote in Government.
Government created FCC.
FCC blessed these Monopolies.
Citizens do nothing to their representatives in Government over it.

Ergo… the citizens BLESS the FCC, a regulatory agency created by the government they voted in to screw everyone over. And you don’t get it!

ATT makes money because many people do not have reasonable choices for alternatives because the government helped ATT to step on the little people.

But no worries, just keep going down that path of ignorance… things aren’t getting worse are they? they are getting better! all the time!

The definition of stupidity is to keep doing the same thing you have been doing while expecting different results!

Anonymous Coward says:

Re: Re: Re:3 talk is cheap

Sadly, you are correct. People have been letting other issues push these aside. But the other issues are admittedly more important because it is pretty easy to sit back and not do anything about that dishonest bill because I still got to watch netflix and play my online games.

But it can change, however that requires support by the People which is very non existent at the moment. So for now, they have near carte blanche over the entire telecom estate.

I.T. Guy says:

Re: Re: Re:2 talk is cheap

You… are either part of the problem or part of he solution. You continually choose the latter by coming here throwing tantrums like a crossed school girl without ever once offering a solution. What are YOU… doing to change things… wiLLie?

If every nation gets the blah blah blah, whine whine whine… what are you doing there little fellah… to help out… to change the government we have?

If your answer is nothing, then this:
But no worries, just keep going down that path of ignorance… things aren’t getting worse are they? they are getting better! all the time!

The definition of stupidity is to keep doing the same thing you have been doing while expecting different results!

Applies to y00 as well, no?

Anonymous Coward says:

Re: Re: Re:3 talk is cheap

Yes, what I say does apply to me as well.

I actively boycott ATT, I use none of their services. Thankfully I not not STUCK with them like many others are.

Two I do not vote in the R’s and the D’s because I am not suckered by their rhetoric like the great majority. George Washington was entirely correct about this nation tearing itself apart with them.

I actively try to help by writing my congress critters and in vain attempts to inform the vastly ignorant and more IMPORTANTLY apathetic citizens. But I am just one person.

You don’t care, you act like you do… and run your mouth a lot to people like me… but you don’t really care. You marching through your little lives and do nothing but run mouth. The declaration of independence said it best!

“…and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed…”

Read it again, and again, and again until you clueless losers figure this out.

“Every Nation gets the Government it Deserves.”

~Joseph De Maistre

it is just EASIER for you all to sit around and run your mouths rather than to actually DO anything. And yes, I know this by experience… I am guilty of it as well, I am just saying lets stop.

We can’t even get enough people together to stop the police from murdering and the courts from incarcerating innocents. There is no way we are getting a bunch of gamers and know-it-alls to do shit. But here I still sit and try and whine like a little school girl over it.

But at least, someone is saying something instead of rolling the fuck over! AND at least I am not part of the crowd working AGAINST a change while running my mouth in favor for one! You guys are you own worst enemies! Get a clue!

Wendy Cockcroft (user link) says:

Re: Re: Re:5 talk is cheap

I agree in full with your approach. Now you need to find allies to work with. As an activist myself I tend to caucus with Progressives and Leftists (they’re actually quite different from each other over here: some leftists are actually socially conservative) because we all agree on key aspects of our particular causes, just for different reasons.

E.g. when we were protesting ACTA the left were all over it because they believe that copyright enables artists and creatives to make a living (…something something hand or brain…). I spent a lot of time trying to reason with them about that. Progressives were more willing to help out but many lefties finally came over because of the threat to the NHS. Many liberals supported ACTA because trade. Literally, that is what they said to me when I asked Liberal MEPs for support. That’s because free market ideology is embedded in their DNA and it’s why they’re supportive of ISDS. Most conservatives (Tories) were in favour of ACTA because trade, private property (they’re very big on that), and “we must enforce the rule of law.” UKIP — Nigel Farage’s party — were the most helpful because they wanted to stick it to the EU.

I disagree with all of them for many reasons but I took what I could get from wherever I could get it and am proud to say that ultimately we won. We killed ACTA on 04/07/2012: Internet Independence Day. Cristofer Fjellner’s tears were delicious!

So what I’m saying is, there are plenty of people to work with if you’re willing to put ideological differences aside for the sake of getting stuff done. It’s just a matter of knowing where to find them. I’d start with local pressure groups and take it from there. Pressure works, my friends, it really does. The trick is to keep the pressure on.

Brian (profile) says:

Not ready for Prime Time

I jumped on the boat but while the content is nice, it isnt living up to their claims. Currently there is no in demand/dvr (supposedly in the future). The quality is great and I have no issue with it until about 6pm – 9pm (prime time). It then seems to do nothing but have a spinning curser. If I can actually get it to play during those times, it will play for a few minutes, then get the spinning curser and say error, please exit and restart to play the content. Rinse and repeat.
It is not a bandwidth issue either. I have comcast 100mb internet.

It may be good in the future, but I cant keep paying $35 for a broken product and unfortunately it isn’t worth $60 a month if they get the bugs fixed.

Michael (profile) says:

Re: Not ready for Prime Time

It is a bandwidth problem. You are highly unlikely to actually be getting a 100mb connection ever, but during that time of day, streaming services (primarily Netflix) see a huge increase in usage. Your 100mb connection along with 100 other people with 100mb connections in your neighborhood are all flowing through a 1gb (if you are REALLY lucky) pipe and when all of you are using what you paid for at the same time, there is not enough to go around.

It’s a cab company selling all access passes for as many rides as you want to hundreds of people but only supplying 5 cabs.

Brian (profile) says:

Re: Re: Not ready for Prime Time

Not bandwidth. I am an IT Tech. I have monitored the connection when it starts buffering. I know it is a 100mb shared connection and it varies from about 80-115mb. Unless there is a network issue, I really havent seen it drop much below that. I do not live in an area with a lot of neighbors (I live year round in a summer town) so in the winter, I normally have really good internet.

Anyway, I have monitored it and it is about 1gb an hour of bandwidth. If a 100mb connection can not handle 1gb an hour then I call BS on your assumption.

TripMN says:

Re: Re: Re: Not ready for Prime Time

It’s probably an upstream problem, but still a problem with bandwidth. Whether the content is coming from a server several hops away or what, there is something that is constricting the flow of data during high congestion times between you and the streaming data.

Of course the blame-game question is who’s fault is it. You have put the blame on AT&T (probably rightly) and not your ISP because you can tell that you still have more than enough bandwidth for other things. There is a reason why Netflix went thru such trouble to get their own CDN servers setup in ISPs and junctions as close to the users as possible. AT&T doesn’t seem to have learned this lesson.

Michael (profile) says:

They didn't change anything

“again a $35 product we bring into the market”

They did not say they were going to CHARGE $35 for it, they just said it is a $35 product.

Truthfully, they have done much better and are really producing about a $6 product (it seems about 40% less reliable than other streaming services).

It’s time we applaud their efforts to bring more and more shoddy products to market each year.

Anonymous Coward says:

Re: They didn't change anything

Actually they said it was a Special Deal, Sale price of $35 which was in fact always going to go up to $60 as that was the normal price always listed. So it’s a zero surprise.

I signed up for the $35 deal, paying the 3 months to get the free AppleTV 4. Because that works out for $105. So I looked at is as getting a AppleTV 4 for $105 instead of the normal $149 and getting 3 months of all these channels I’ll never watch anyway. So far I’ve watched very little of it. I hate commercials, and being forced to watch when the shows are on. There’s no DVR function, which I know will be even more money whenever that comes. Come March, I’ll drop it. I have to much to watch already. With a Antenna and TIVO, I get most of my TV I watch that way. Netflix fills in most everything else. Much more then that and maybe you’re watching to much TV. Go outside, visit friends. Get a hobby.

DannyB (profile) says:

Re: Re:

I don’t use ANY tv or cable providers. That makes it easy. All I want is internet access. I can get either / both cable internet or at&t internet. AT&T can offer me fiber.

The problem I see down the road is that both the Cable provider and AT&T have their own “content”. If I wanted crap content I would still have cable TV and a TiVo.

Content and internet access need to be completely separate. The same company should not be allowed to provide both. Or alternately, (network neutrality) the internet provider should not be allowed to favor its own content over other content providers, like Netflix / Hulu / HBO / Starz / etc, etc.

Anonymous Coward says:

They will eventually collapse under their own weight. Cable TV as we know it is dying. More and more people are using you tube and social media instead of streaming tv and movies. I haven’t had cable in 5 years, and what little tv I watch I get from Amazon Prime. The ONLY reason I even have that is because I get the cheap shipping and the TV comes with it. I’m thinking the population of people that are like me is growing not shrinking. As soon as a over-air ISP is born that can reach into every crack and crevice of this country without any wires at all, legacy cable will collapse. I’m looking forward to it.

DannyB (profile) says:

Re: Re:

Iridium launch of the first ten of its next generation satellite network aboard SpaceX Falcon 9 next Monday.
http://spaceflightnow.com/launch-schedule/

According to this, Iridium is replacing its entire constellation of satellites.

http://www.wusa9.com/news/local/ashburn/va-company-replacing-satellite-constellation-/382182854

So 21st century sat phone / internet. Reachable anywhere on the planet — like in a deep desert, or antarctic, or middle of the ocean.

Also others, like Elon Musk talk about building similar LEO satellite networks to provide internet access.

I am convinced that it will inevitably happen. Now if we can just keep them from offering their own content and favoring it over competitors.

What will China do if someone can have a sat phone / sat modem in their basement that doesn’t go through the great firewall?

Anonymous Coward says:

Re: Re: Re:

You might be too optimistic, but I hope you are right.

This is why they need those nasty trade deals… so they can force equipment manufacturers to not help those they seek to control. Or to force governments into criminalizing certain avenues of content.

Imagine a business suing a country in ISDS court because all of its citizens have now just went rogue and are using “unauthorized” services causing them a profit loss?

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