The U.S. Federal Communications Commission FCC told AT Inc it has "serious concerns" about whether rivals will be able to compete with its DirecTV Now streaming video service, which will cost $35 a month for 100 channels — and demanded answers by Nov. 21.The FCC told AT, in a letter reviewed Thursday by Reuters, that AT's DirecTV service and its zero-rated app "may obstruct competition and harm consumers" because it could be too expensive for rivals not affiliated with AT to sponsor data programs to compete.
The offerings may violate the FCC's 2015 net neutrality rules, the government said.Zero-rating is when wireless carriers don't count data used with certain streaming services against your data cap.
For example, T-Mobile offers zero-rating for several popular services like Spotify, Netflix, and YouTube.
AT is planning on having its DirecTV Now streaming TV service, which the company thinks will be its main TV product by 2020, be totally zero-rated.
That means you can stream all you want without worrying about your data usage.This sounds great for customers, but the FCC thinks it might hurt competitors unfairly.The FCC letter from wireless telecommunication bureau chief Jon Wilkins said rival providers would face potential higher costs that DirecTV would not - including "overage fees and or reduced transmission fees" if subscribers exceeded allowances under their plan.Time Warner as a weaponThis is particularly relevant in light of AT's announced plan to acquire Time Warner Inc for $85.4 billion.
The Time Warner deal gives AT control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets.