Voicing concern that the combination of sponsored data plans offered to AT&T customers by AT&T Mobility and AT&T subsidiary DirecTV “[harms] consumers by constraining their ability to access existing and future mobile video services not affiliated with AT&T,” FCC Wireless Telecommunications Bureau Chief Jon Wilkins asked AT&T in a November 9 letter to explain how the company’s sponsored data offerings “do not improperly restrict or skew end-users’ choices among mobile streaming video services.”   

Wilkins delivered his letter to AT&T Executive Vice President Bob Quinn as the FCC continues its ongoing investigation into fixed and wireless broadband carrier “zero-rating” practices, through which certain content is exempted from subscriber data counts.  Specifically, the letter cites AT&T’s September 7 announcement of the “Data Free TV” app, which allows AT&T Mobility customers who also subscribe to DirecTV to stream DirecTV content on their wireless devices without charge to their data allowances.  The letter also spotlight’s AT&T’s plan to launch another broadband-delivered video offering—DirecTV Now—which Wilkins observed “will be zero-rated for AT&T Mobility subscribers who choose to use it, regardless of whether they subscribe to DirecTV’s satellite TV service.”   

Although AT&T has confirmed it will offer low wholesale rates and reasonable terms to “any video provider that wishes to sponsor its content in the same ‘data free’ way for AT&T Mobility customers,” Wilkins told Quinn, “it is not difficult to calculate usage scenarios in which an unaffiliated provider’s sponsored data charges alone could render infeasible any third-party competitor’s attempt to compete with the $35 per month retail price that AT&T has announced for DirecTV Now.”  Wilkins further stressed that unaffiliated third-party providers that do not participate in AT&T’s sponsored data plans “would likewise face a significant competitive disadvantage in trying to serve AT&T Mobility’s customer base without zero-rating.”  As such, Wilkins maintained that, “under either option for competing with AT&T’s video services, unaffiliated video content providers appear to confront significant disadvantages from the combined impact of AT&T Mobility’s sponsored data fees and zero-rating of its own DirecTV offerings.”   

AT&T has been asked to respond to the FCC by November 21.  Describing sponsored data offerings as “incredibly popular services” that “make it easier for consumers to say goodbye to their cable company,” Quinn expressed hope that “the FCC will consider the enormous value consumers find in obtaining free data or free streaming when someone else is footing the bill for their data.”