FCC Says DirecTV Offer From AT&T Means Less Competition

Wireless users of AT&T may love the fact that they can watch DirecTV Now on their mobile devices without the streaming hitting their data caps. The Federal Communications Commission is not wild about this idea, but the arrival of DirecTV Now internet based streaming service, which also does not count against the data caps for AT&T users, could invite scrutiny to the issue.

In a letter written to AT&T, FCC Wireless Telecommunications Bureau chief Jon Wilkins said that he is much concerned that the carrier is violating net neutrality, as they offer data cap exemption on DirecTV that flows inside their network. As of now, AT&T is charging third party video providers who wish to deliver their video content to the users, but does not want their video to count on the data cap of the user.

FCC had brought their concern to AT&T last month and said that the decision of AT&T to allow users to stream DirecTV video content without any data caps may violate the net neutrality rules. The concern of FCC is that the third-party video providers need to pay AT&T a fee if they need to deliver their content on DirecTV Now services without affecting the data caps, while AT&T’s own TV services do not need to pay a fee.

In reply to that, AT&T said that they are not violating the net neutrality rules and said to FCC that it should not matter if a customer or content provider is paying for the data usage. AT&T also said that DirecTV pays them to sidestep data caps. However, FCC still has their concerns and Wilkins said AT&T that the response of the carrier “tends to confirm” the initial concerns of FCC. He also added that the competitors of AT&T might not be able to “compete over AT&T’s network on reasonable terms.”

It is not just AT&T that draws scrutiny from FCC. The Commission also contacted Verizon recently about their FreeBee Data 360 program. This program charges providers for the right to move aside data caps. Verizon has time until Dec 15 to respond to the concerns of FCC.

The criticism of AT&T by FCC is much important, as they have released DirecTV Now service, which is the live streaming service from AT&T aimed at cord cutters and cord-nevers. In his letter to AT&T, Wilkins cites DirecTV Now and argues that the pricing of AT&T on data could make it “very difficult, if not infeasible, to offer a competitively priced service.”