AT&T Will Zero Rate its Upcoming Streaming TV Service, Doesn't Think FCC Will Act

from the one-for-you,-three-for-me dept

We've long noted how the FCC's decision to avoid prohibiting zero rating (exempting your own or a paid partner's content from usage caps) opened the door to letting incumbent ISPs trample net neutrality -- if they're just creative enough about it. And that's precisely what has happened, with Comcast and Verizon now exempting their own content from usage caps, while T-Mobile and Sprint explore throttling all video, games and music unless users pay a $20 to $25 leave me the hell alone fee.

The FCC's total inaction on this front has also emboldened AT&T, which recently began exempting its own DirecTV streaming video app from the company's usage caps while still penalizing customers that use competitors like Netflix, Hulu or Amazon. But as we warned then -- AT&T isn't done. This week it confirmed that it will also zero rate its upcoming DirecTV Now streaming video service, which is AT&T's massive new entry into the streaming video market:
“We’ll be rolling it out in a couple of months,” Stephenson told attendees at an investors conference. “We’re talking 100-plus channels at a very, very aggressive price point. And when you buy this content, the data required to stream it onto your mobile device is incorporated into the price of the content…. If you choose to use that in a mobile environment on AT&T, your data cost is incorporated into your content cost."
That's a pretty clever logical tap dance. AT&T isn't unfairly giving its own content a leg up in the streaming video market, you see, it's just "incorporating" the cost of wireless data into your content costs. Either way you slice it, AT&T is using its stranglehold over the fixed and wireless markets to give its own content an unfair advantage, and you'd be pretty hard pressed to find too many tech beat writers, customers, or regulators that seem to give much of a damn. Why? Because under superficial inspection it looks like customers are getting something for free, even if usage caps are artificial and arbitrary constructs to begin with.

That said, AT&T is making it pretty clear it doesn't think regulators will do much about its latest anti-competitive gambit. Speaking at the recent CTIA wireless trade show in Las Vegas, AT&T Mobility President Glenn Lurie proclaimed that the company isn't worried about a regulatory crackdown:
“We have no regulatory concerns about it. We feel very good about it from that aspect. We’re not prioritizing [data], we’re treating it all the same,” Lurie told FierceWireless here on the sidelines of the CTIA Super Mobility trade show. Lurie is president and CEO of AT&T’s mobility and consumer operations. “So we’re not worried about that.”
Even though AT&T's tactic here is to basically lie and say it's treating "all data the same," it doesn't think the FCC will act. That means it's either emboldened by the FCC's apathy on this front, or it has received private indications from the agency that it doesn't intend to tread into the zero rating waters. But with large, incumbent broadband providers now using their monopoly over the last mile (and spectrum) to give their own content a leg up, you'll soon find many consumers wondering why the hell we have net neutrality rules in the first place.

Filed Under: fcc, net neutrality, streaming tv, zero rating
Companies: at&t


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Anonymous Coward, 22 Sep 2016 @ 6:45am

    Regulation! Yay yay, he's our man if he can't do it, more Regulation Man!

    The FCC's total inaction on this front has also emboldened AT&T,

    You don't say...

    Why would the FCC actually resolve a problem it created in the first place? If the FCC resolved the issues they would be out of a job. What person in their right mind would want to put themselves out of business?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Sep 2016 @ 6:56am

      Re:

      1) How did the FCC create the problem of ISP's violating net neutrality via zero-rating?
      2) Why do you think this is the last problem the FCC would ever have to resolve?
      3) What makes you think the entire organization would be dissolved if they somehow managed to resolve all current problems?

      reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 22 Sep 2016 @ 7:03am

        Re: Re:

        I believe this is the same AC who pops up in every thread the FCC is mentioned. The mere positive mention of regulation will summon him.

        He seems to think that the free market will magically fix everything and the naughty FCC is stopping this merely by existing. The collusion, anti-competitive and other negative behaviour in question that are also evident in every other industry in every other country (especially those that are unregulated) won't deter him from this ideal. Nor will he explain how not regulating an industry will stop these players from exploiting it.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 Sep 2016 @ 9:19am

        Re: Re:

        How did the FCC create the problem of ISP's violating net neutrality via zero-rating?

        Elementary sir. Have you heard of the concept of loop holes? They are built into legislation or regulation on purpose. Regardless of who invented the concept of Zero Rating it was made in such a way to allow its abuse.

        Just like DMCA, it was entirely created to allow for abuse, and ridiculous amounts of it as well.

        Why do you think this is the last problem the FCC would ever have to resolve?

        Surely you jest sir! The FCC created these problems... they will create more, of course this would not be the last one they would have to "resolve" as you say it.

        What makes you think the entire organization would be dissolved if they somehow managed to resolve all current problems?

        Okay, you do have a point on that one. I should have ALSO said that they would not do anything that would potentially reduce their funding, but the basic premise would be the same.

        There is literally no impetus for the FCC to truly resolve issues. They like all other agencies have been created to decide winners and losers in the market. This generated insiders with special access to government you NEVER get to have.

        The FCC was created to prevent telco market corruption.
        1. Instead it has only increased and Legitimized it.
        2. The industry they are intended to "regulate" has more access to them than the people they are supposed to be "working for"

        It amazes me that this very obvious truth is lose on so many people.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 22 Sep 2016 @ 10:29am

          Re: Re: Re:

          If they are merely doing the bidding of big businesses to create loopholes, then why are all of their efforts fought against tooth and nail by the big businesses you claim are in benefit?

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 22 Sep 2016 @ 11:23am

            Re: Re: Re: Re:

            Never heard of a dog and pony show before?

            Same principal as "ask for more than you need so when you back down a little bit" you wind up getting what you wanted to begin with.

            If they just roll straight over then there is a higher likely hood of being revealed for the corruption they are. Otherwise, if you at least put forth the impression that you are trying to do something you can convince many people that you are making an effort.

            Of course there are genuine people in these organizations that do like to help from time to time, but they are pretty much rolled or stepped over.

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 22 Sep 2016 @ 12:01pm

              Re: Re: Re: Re: Re:

              So, in your mind, it doesn't matter what the FCC does. If it doesn't try to do it's job, it's part of the conspiracy through inaction. And if it tries to do its job, then it's only proof of feigned attempt in collusion with the likes of the MPAA and ISP's to put on a good show.

              So, what evidence could possibly convince you that the FCC's efforts in recent months were genuine?

              Why are you so certain that the FCC is complicit? It's a certainty that congresspersons who have opposed the FCC's actions are pretty much bought through campaign contributions, but the people in the FCC?

              Were the moon landings faked just so the government would have a good excuse for their rocket programs?

              Was Kennedy shot because he was gonna expose some great corruption?

              Am I a paid government shill?

              reply to this | link to this | view in chronology ]

              • identicon
                Anonymous Coward, 22 Sep 2016 @ 2:11pm

                Re: Re: Re: Re: Re: Re:

                No, you missed the point completely.

                Judge all things by the fruits of the labor, never by their words. The FCC has cause more trouble than it has resolved. I am not prepared to praise someone who saved 10 babies when they still murdered one of them. And for the FCC, its more like they murdered 10 and saved only 1.

                Additionally the FCC is not supposed to be creating any laws or rules. According to the Constitution, ONLY Congress has that power. Congress cannot divest or transfer that power either, because the Constitution does not grant it. The Constitution only allows congress to created agencies to enforce the laws Congress VOTES into law.

                I do not think you are a shill of any kind, I just think you along with most other American's are grossly misguided and seriously lacking in knowledge of how the American government and economy were intended to operate according to the US Constitution and historical track record of regulation across the entire fucking history of humanity.

                reply to this | link to this | view in chronology ]

        • icon
          nasch (profile), 22 Sep 2016 @ 11:17am

          Re: Re: Re:

          Have you heard of the concept of loop holes? They are built into legislation or regulation on purpose.

          The question is how the FCC created this problem. To answer that question you would need to indicate how FCC regulations caused these companies to institute zero rating - that is, they wouldn't have done it if not for the regulations. All you have done so far is demonstrate that the FCC allows zero rating, and we all knew that already.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 22 Sep 2016 @ 11:34am

            Re: Re: Re: Re:

            All you have done so far is demonstrate that the FCC allows zero rating, and we all knew that already.

            Let me get this straight. That is NOT enough for you? I mean, if the government just allows police to shoot people IF they feel threatened that is fine right? Cause that is fucking happening right fucking now!

            You see, that is all the fucking loop hole they need. Regarding the rest of the trouble the FCC has caused... surely you can read history right?

            Here is a small snippet.
            https://en.wikipedia.org/wiki/Federal_Communications_Commission
            "For many years, the FCC and state officials agreed to regulate the telephone systems as a natural monopoly."

            Instead of the utility lines becoming PUBLIC property they were allowed to control the last mile and that is a HUGE FUCKING DEAL. The FCC did nothing to prevent them because they agreed with them. Sure they have tried to ratchet some of that back since then, but the problem still fucking remains. Decades have gone by and the problem has not been solved.

            How many people, years, administrations, chairmen, and commissioners do we need to go through to figure this fucking shit out?

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 Sep 2016 @ 8:13am

      Re:

      Yup, because ethically challenged corporations would never take advantage of an unsuspecting public and therefore there is no need to hold them to the law or anything near what the law says - because they are benevolent overlords and only want the best for all of us ..... not

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 Sep 2016 @ 9:23am

        Re: Re:

        Yup, because ethically challenged politicians would never take advantage of an unsuspecting public and therefore there is no need to hold them to the law or anything near what the law says - because they are benevolent overlords and only want the best for all of us ..... not

        FTFY

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 22 Sep 2016 @ 11:16am

          Re: Re: Re:

          You fixed nothing.

          Politicians do not have a monopoly on corruption, and corporations are not all outstanding members of the community.

          Blaming politicians for not stopping the corporate gang raping of the public - while at the same time wagging a finger at all regulation ... this requires a complete lack of logic which most would find distasteful.

          Oh, wait .... you like the corporate ass reaming, dont you?

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 22 Sep 2016 @ 2:21pm

            Re: Re: Re: Re:

            Negative, I am directly stating that your SOLUTION is WORSE than the PROBLEM you "claim" to be resolving.

            And if you find my logic distasteful you would fit right in right along with all of the other people that hate the founding fathers guts.

            America rose to power with Free Market principals. Those have all been destroyed by regulation. America has been slowly losing economic might for a long time because we have shat free market ideals out a long fucking time ago.

            reply to this | link to this | view in chronology ]

            • icon
              nasch (profile), 22 Sep 2016 @ 2:34pm

              Re: Re: Re: Re: Re:

              America rose to power with Free Market principals. Those have all been destroyed by regulation.

              Yes, all of them. There are no free market principles left. It may look like there are some but no, it's all just regulation now.

              /s

              reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 22 Sep 2016 @ 5:41pm

              Re: Re: Re: Re: Re:

              A few things about your rather common misconception ....

              1) There never has been and never will be free market capitalism. It is a conceptual construct which can not be achieved not matter how hard you try.

              2) Regulation does not destroys markets, not initially. Regulation of commerce is a well established necessity, markets are incapable of doing so on their own and therefore government steps in out of necessity. The reasons for this vary widely, could be control of pollution, stopping con artists, etc.

              3) Market deterioration in the us is self inflicted, off shoring jobs, bank fraud, political hooliganism, and a general lack of foresight ... and here we are with a decimated middle class and no one left to buy all those goods n services or pay all those taxes.

              4) free market ideas ... you mean those ones that allowed and encouraged slavery? It was quite the thriving business back in the day ... which you seem to prefer. But then again, there is no such thing as a free market.

              reply to this | link to this | view in chronology ]

            • icon
              PaulT (profile), 23 Sep 2016 @ 12:13am

              Re: Re: Re: Re: Re:

              "America rose to power with Free Market principals."

              Then, people realised that robber barons, rivers on fire, child labour, company scrip, etc., etc. might not be the best thing and people stepped in to prevent abject destitution among the majority of the population.

              Free markets are great - for the 1%. The problem with people like you is you imagine you'll be one of them rather than the majority getting fucked over every day. You're usually mistaken about that fact.

              reply to this | link to this | view in chronology ]

              • icon
                Wendy Cockcroft (profile), 23 Sep 2016 @ 7:33am

                Re: Re: Re: Re: Re: Re:

                What PaulT says. All of it.

                Seriously, what is in the Kool Aid that convinces people that corporate actors are magically purified by the act of engaging in business?

                People are people, whatever they do for a living and whoever they work for. Any philosophy that doesn't take into account that people often behave badly isn't worth the paper it's written on.

                reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Sep 2016 @ 7:07am

    rope -----------------------------------------------AT&T
    please let it just be them giving AT&T enough rope to hang themselves and not them getting lazy or hung up by other branches

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 22 Sep 2016 @ 7:22am

    Considering past tries from the industry they will balance this unfair competitive practice by offering a totally crappy service!

    Can't you make it look like it's their streaming traffic to use as much as you want like some dude did with T-mobile?

    reply to this | link to this | view in chronology ]

  • icon
    Nathan F (profile), 22 Sep 2016 @ 7:38am

    The thing I hate most about the FCC not acting on these is that as soon as they do (if they ever do..) come down on the providers they will get taken to court, yet again. They will cry "over reach" and "we have been doing it like this for years and they never had a problem with it". When it comes to corporate giants like this you have to take a firm hand early and often because otherwise they will take the inch you give them and run a thousand miles with it.

    reply to this | link to this | view in chronology ]

  • icon
    Christopher (profile), 22 Sep 2016 @ 8:58am

    Hmm.

    The FCC could ask for how they calculate the data charges, then everyone will see how AT&T values the data and content, separately.

    -C

    reply to this | link to this | view in chronology ]

  • identicon
    Lurker Keith, 22 Sep 2016 @ 12:32pm

    So... someone could just...?

    it's just "incorporating" the cost of wireless data into your content costs

    So, someone who doesn't stream video on their phone, EVER, & has no tablet or other mobile enabled device, could just ask for that "incorporated cost" to be deducted, right?"

    Or would that "overcharge" have to go through a court to expose the lie & net neutrality violation?

    reply to this | link to this | view in chronology ]

  • identicon
    UniKyrn, 22 Sep 2016 @ 2:55pm

    Why do we have Net Neutrality Rules in the first place?

    So that the companies ignoring them have yet one more thing they can feel smug about, of course.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 22 Sep 2016 @ 4:50pm

    A fair bet

    Given the FCC's monumental screw-up in allowing zero-rating at all, mixed with it's either indifference or inability to do anything about it when companies use that loophole to screw the public over, believing that the FCC won't step in for this particular hosing of the public is probably a pretty safe bet, and one I'd certainly take in their shoes.

    reply to this | link to this | view in chronology ]

  • icon
    Whatever (profile), 22 Sep 2016 @ 9:46pm

    Zero Rating Versus Net Neutrality

    I love stories like these, because I think it plays to a popular misconception about net neutrality: It's about what is coming into the network, and not about what is happening inside networks.

    The reasons the FCC won't get involved is very simple: Zero rating an internal service (because it's sourced inside their own network) doesn't violate the rules of net neutrality. It's inside the network, an internal product.

    The FCC isn't being stupid or ignorant. Rather, they realize that they are already massively stretching their mandate to even get a toe onto the net neutratlity base, and they aren't going to risk getting called out on the play by trying to act like they are fully on control. It's very likely any attempt to stop "internal product" zero rating would lead to a massively legal action that would leave the FCC hurting. The courts would very likely ask the FCC to provide the EXACT legal mandate that allows them to decide, and since they won't be able to provide it, they will get shut down pretty quick.

    The companies will respect (marginally) they concept of net neutrality to avoid rocking the boat, which might get congress to act. But for now, they know that the FCC is floating on legal quick sand, and could sink at any time if they make quick moves. So the providers dance around, and the FCC can't react in any way to would make it worse for them.

    Thus, zero rated internal services. Good luck fighting it.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 25 Sep 2016 @ 4:19am

      Re: Zero Rating Versus Net Neutrality

      Zero rating an internal service (because it's sourced inside their own network) doesn't violate the rules of net neutrality

      In this case that is true, in others cases they give zero rating to services who pay them. The whole problem with zero rating is that it will lead to the Internet becoming fragmented within the country, and people having to choose ISPs, if they can, depending on what services and resources they want to access.
      Zero rating will turn the Internet into cable TV V2.

      reply to this | link to this | view in chronology ]

  • icon
    The Wanderer (profile), 24 Sep 2016 @ 3:34pm

    Zero rating an internal service (because it's sourced inside their own network) doesn't violate the rules of net neutrality.
    False.

    The source of the data doesn't matter; "inside the network" is still on the network, and the network needs to treat all data passing over it neutrally, regardless of where that data comes from or where it is going.

    As soon as your network equipment starts paying attention to things like where the data came from originally, or where the data's ultimate destination is - much less what the actual content of the data is - beyond the bare minimum needed to perform proper routing, you are violating the principle that the network should be (content-, provider-, and recipient-)neutral.

    Now, that's an approximation of the absolutist version; in practice, there can be some degree of flexibility to allow for traffic shaping, so that e.g. data which needs fast response (e.g. realtime communication) can be given lower ping times at the expense of also getting lower throughput. That's the absolute farthest that it can go, however, and even that needs to be based on explicit user request for this particular traffic to be handled differently; ideally this would be done by something like an optional label, which the network is explicitly permitted to look at if it is present.

    reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 24 Sep 2016 @ 4:03pm

      Re:

      in practice, there can be some degree of flexibility to allow for traffic shaping, so that e.g. data which needs fast response (e.g. realtime communication) can be given lower ping times at the expense of also getting lower throughput.

      Do you have any references for how that tradeoff works? Personally I wouldn't mind if ISPs shaped traffic based on type - prioritize latency on streams (this would cover everything from Netflix to VOIP) and gaming, and deprioritize bittorrent, email, etc. if necessary. That gets some peoples' panties in a twist though, not sure why.

      reply to this | link to this | view in chronology ]

      • icon
        The Wanderer (profile), 25 Sep 2016 @ 7:36am

        Re: Re:

        Unfortunately, no. I've seen it discussed in the past, and I believe there were links involved, but I didn't keep any of them.

        I can't speak for other people, of course, but the reason I'm not entirely comfortable with the practice is that - so far as I understand matters - there's currently no way for the provider to determine which packets to handle in which way except by inspecting the contents of the packets, so this can't currently be done without violating the neutrality principles at least in concept.

        (I can't swear there isn't a way to do it without that, even currently much less in "someone could design one" nebulous form, but I don't know of any.)

        That said, some providers actually do do this, right now - or at least they claimed to, when I last saw the matter being discussed. I don't have any references for that either just offhand, however.

        reply to this | link to this | view in chronology ]

        • icon
          nasch (profile), 25 Sep 2016 @ 8:00am

          Re: Re: Re:

          I can't speak for other people, of course, but the reason I'm not entirely comfortable with the practice is that - so far as I understand matters - there's currently no way for the provider to determine which packets to handle in which way except by inspecting the contents of the packets, so this can't currently be done without violating the neutrality principles at least in concept.

          I'm not sure about neutrality but that would certainly be a privacy issue. However, I don't think deep packet inspection would be necessary.

          https://en.wikipedia.org/wiki/Differentiated_services

          It sounds from the WP article that this is not theory but is taking place currently and has been for some time. So why do I have so many problems playing Halo...

          reply to this | link to this | view in chronology ]

        • icon
          nasch (profile), 25 Sep 2016 @ 8:01am

          Re: Re: Re:

          That said, some providers actually do do this, right now

          Oh you mentioned that already. :-)

          reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Techdirt Gear
Shop Now: Copying Is Not Theft
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.