Craig Moffett, a Wall Street analyst specializing in telecommunications stocks, has lowered his opinion of T-Mobile after the wireless company successfully topped analyst estimates of subscriber growth, in part by giving customers a better deal than its competition.
Moffett is concerned T-Mobile’s subsidized holiday price cuts on the latest Apple iPhone and a new flat rate plan delighted customers but threatened profits.
“[…]Even as the wireless stocks were rising in November and December, handset subsidies were quietly making their unwelcome return,” said Moffett in a report to his clients. “T-Mobile’s new ‘All-In’ pricing plan opens yet another front in the battle over service plan pricing, leaving us incrementally more cautious about ARPU (average revenue per user) forecasts for all operators, not least T-Mobile itself.”
T-Mobile has ditched promotions for all of its usage capped data plans and is now advertising T-Mobile One, an “unlimited” (but throttled for very heavy users) data, text, and calls for an all-inclusive price of $40 per line. Customers can still buy a limited data plan, but T-Mobile’s website strongly de-emphasizes that option.
While T-Mobile added 1.2 million postpaid customers in the fourth quarter, exceeding estimates, Moffett isn’t happy with the prices those customers are paying because it may force other carriers to reduce their pricing as well. That hurts everyone… on Wall Street.
T-Mobile USA John Legere has become a perennial and profane thorn in the side of his competitors.
That kind of marketplace disruption the wireless industry could do without, so analysts on Wall Street are taking bets on what company will acquire T-Mobile and get things back to business as usual. Moffett believes all signs point to an unprecedented wave of deregulation, lower corporate taxes, and money-fueled industry consolidation under the incoming Trump Administration.
Sprint is a rumored favorite to acquire T-Mobile, but then so is Comcast, which may seek to enter the wireless space through a large acquisition. Companies repatriating billions in excess funds stashed in overseas banks at the special low tax rate President-Elect Trump is proposing may be what drives the next buyout frenzy.
Suddenlink customers around the country are finding accessing the internet has suddenly gotten more expensive. For many service areas, the cable operator raised its rates in December for television and broadband service, with some of the biggest hikes coming from sneaky surcharges.
In many states, the most popular basic bundle already costs $90 a month. The biggest increases have come from “surcharges” which are never a part of Suddenlink’s advertised promotions, surprising many customers on their first bill.
In Arizona, the Broadcast TV surcharge has gone up another $1.61 a month, making customers pay $8.39 a month for a handful of local channels. A separate sports programming surcharge of $5.15 also applies. Suddenlink is also part of the club of cable operators charging customers $10 a month to rent a cable modem. For good measure, the cable operator also wants another dollar a month for its DVR and $3.50 more for broadband. Assorted other fees and surcharges tack on another $4.50 a month.
Suddenlink has already notified some regulators more price hikes are coming in the next several months.
But a Suddenlink spokesperson said there is more good news than bad.
“We provide Suddenlink customers with superior products and services at a great value, continually introducing faster internet speeds and with plans to roll out an enhanced video experience in the coming months,” Janet Meahan, spokeswoman for Suddenlink, told the Daily Miner in Kingman, Ariz. “Our pricing remains extremely competitive in the face of rapidly rising programming costs.”
Mehan also told the newspaper that Suddenlink introduced 1 gigabit internet service in Kingman in October, and provided “complimentary” speed upgrades for residential customers at no extra charge.
“They also had their artificial internet rate hike when they implemented data ‘allowances’ (caps),” retorted Ryan, a Suddenlink customer. “Their upgrades are anything but complimentary.”
Readers report they’ve had success calling Suddenlink and threatening to cancel service over the rate increases. Some report they’ve successfully negotiated their rates down to a level just a dollar or two higher than what they paid two years ago. Customers can also buy their way out of Suddenlink’s data caps by upgrading their service.
New subscribers and existing customers who elect to get an upgrade will automatically be enrolled in an unlimited plan at no extra charge the first year, pay an added $5 a month after 12 months, and an added $10 a month after 24 months. Customers currently subscribing to Suddenlink’s fastest local services may choose to retain their existing usage-based plans or upgrade to an unlimited plan.
When AT&T announced it would offer 100+ cable television and broadcast network channels under the DirecTV Now brand for $35 a month, Wall Street had a fit.
Craig Moffett, an analyst with Moffett-Nathanson, speculated that AT&T would make at most a profit margin of $5 a month for its $35 a month plan, once programming costs were covered. But then AT&T announced it would sweeten the deal with a free Apple TV Player or Amazon Fire Stick for those confident enough to prepay for the new service. That makes DirecTV Now a purposefully unprofitable service, creating considerable stress for both the cable and satellite industry and their investors.
Varietynotes the average DirecTV satellite subscriber delivers about $60 a month in profit to its owner, AT&T. That led the industry magazine to speculate DirecTV Now is a “loss leader” designed to sell its parent company’s AT&T-Time Warner, Inc. merger deal to regulators on the premise of increased competition delivering real savings to consumers.
Thankfully for Wall Street’s nerves, AT&T’s usual practice of marketing things with a lot of fine print emerged in the nick of time, and the $35 dollar price has now turned out to be an introductory offer for early adopters. In the not-too-distant future, AT&T will enroll new customers for its “Go Big” package at a much more profitable $60 a month. Customers who sign up at the $35 rate and stay customers will be able to keep that price as long as they make no changes to their account after the promotion ends.
Moffett
But Moffett warned investors that the traditional cable television model is still under serious threat, and AT&T’s less-promoted “Live a Little” package offering 60 popular cable networks for the everyday price of $35 is the equivalent of AT&T “running with scissors” because it alone could cause millions of cable and satellite customers to cut the cord and stay more than satisfied with a slimmed down cable package.
“Virtually all the channels that anyone would really want, save for regional sports networks” are included in the lighter “Live a Little” package, Moffett added. Customers who loathe watching sports but want a beefier package can also sign up for a $50, 80-channel “Just Right” package that primarily omits sports-oriented channels and a handful of spinoff cable networks few would miss.
Moffett and other Wall Street analysts were hoping AT&T would bloat its cheaper package with home shopping, religion, and other little-watched, low-cost cable networks and then entice customers to upgrade to unlock more popular cable channels. Instead, AT&T’s most premium package — “Gotta Have It” which costs $70 a month adds the “can live without” networks like Boomerang, Cloo, El Rey, Centric, and other little-known channels that typically live unnoticed in Channel Siberia on 500+ channel cable lineups. The highest premium priced package is attractive only for those looking for Starz/Encore channels and the basic cable network that gets no respect — Hallmark Movies & Mysteries (a/k/a the Dick van Dyke Permanent Employment Network.)
“By stacking their base package with all the best networks — likely a requirement for getting the programming contracts at all — they still have the same problem that was highlighted initially,” by Moffett. “Put simply, they aren’t going to make any money.”
That quest for profit is further challenged with subscriber acquisition programs that dole out free Apple TV units to customers willing to prepay for three months of service at the $35 rate or an Amazon Fire Stick (with Echo remote) in return for prepaying for one month of service. Anyone in the market for either device can sign up for DirecTV Now, get the equipment at an attractive price, and consider the 1-3 months of service a free extra bonus. Customers were reportedly lining up at AT&T’s owned and operated retail outlets (not authorized resellers) to pick up devices and sign up for service today.
At these prices and with these promotions, AT&T DirecTV Now could first decimate the subscriber base of its immediate competitors Sling TV and PlayStation Vue, either of which offer a much less compelling value. AT&T can afford to charge a lower price because it has deeper pockets and enormous volume discounts on the wholesale price of cable programming — combining millions of DirecTV and U-verse TV subscribers together to negotiate what industry insiders suspect are major discounts the smaller providers cannot get.
But there are issues likely to be deal-breakers for some would-be DirecTV Now subscribers:
Local broadcast stations are available only in a handful of selected cities and only a very few include all ABC, NBC, and FOX affiliates. CBS is not participating in DirecTV Now at this time, and that is a major omission;
There is a limit of two concurrent streams and although video quality is very good, it is not the 1080/HD experience AT&T’s marketing material would suggest. The quality of your internet connection will make a difference;
No DVR option at this time.
CNET compiled an excellent channel comparison chart to help consumers figure out which, if any, of these upstarts make sense as a cable TV replacement:
DirecTV Now vs. Sling TV vs. PlayStation Vue (top 169 channels, see notes below)
Channel
DirecTV Now Packages
Sling Package
Vue Package
A&E
Live a Little
Orange, Blue
No
ABC
Yes or VOD
Broadcast extra
Yes or VOD
AMC
Live a Little
Orange, Blue
Access
American Heroes
Go Big
No
Elite
Animal Planet
Live a Little
No
Access
Audience
Live a Little
No
No
AXS TV
Live a Little
Orange, Blue
No
Baby TV
No
Kids extra
No
BBC America
Live a Little
Orange, Blue
Access
BBC World News
Go Big
News extra
Elite
beIN Sports
No
Sports extra
Core
BET
Live a Little
Blue (Orange lifestyle extra)
No
Bloomberg TV
Live a Little
Base
No
Boomerang
Gotta Have It
Kids extra
Elite
Bravo
Live a Little
Blue
Access
BTN
Just Right
No
Core
Campus Insiders
No
Sports extra
No
Cartoon Network/Adult Swim
Live a Little
Orange, Blue
Access
CBS
No
No
Yes or VOD
CBS Sports
No
No
No
Centric
Go Big
No
No
Cheddar
No
Orange, Blue
No
Chiller
Gotta Have It
No
Elite
Cinemax
PREMIUM ($5/month)
PREMIUM
No
Cloo
Gotta Have It
No
Elite
CMT
Live a Little
Comedy extra
No
CNBC
Live a Little
News extra Blue
Access
CNBC World
Just Right
No
Elite
CNN
Live a Little
Orange, Blue
Access
Comedy Central
Live a Little
Orange, Blue
No
Comedy.TV
Just Right
No
No
Cooking Channel
Just Right
Lifestyle extra
Elite
CSPAN
Live a Little
No
No
Destination America
Go Big
No
Access
Discovery Channel
Live a Little
No
Access
Discovery Family
Go Big
No
Access
Discovery Life
Go Big
No
Elite
Disney Channel
Live a Little
Orange
Access
Disney Junior
Live a Little
Kids extra Orange
Access
Disney XD
Live a Little
Kids extra Orange
Access
DIY
Go Big
Lifestyle extra
Access
Duck TV
No
Kids extra
No
E!
Live a Little
Lifestyle extra Blue
Access
El Rey Network
Gotta Have It
Orange, Blue
No
Encore
Gotta Have It
No
No
EPIX
No
Hollywood extra
No
EPIX Drive-in
No
Hollywood extra
No
EPIX Hits
No
Hollywood extra
PREMIUM, Elite
EPIX2
No
Hollywood extra
No
ESPN
Live a Little
Orange
Access
ESPN 2
Live a Little
Orange
Access
ESPN Bases Loaded
No
Sports extra Orange
No
ESPN Buzzer Beater
No
Sports extra Orange
No
ESPN Deportes
No
Spanish TV extra Orange
Elite
ESPN Goal Line
No
Sports extra Orange
No
ESPNEWS
Just Right
Sports extra Orange
Core
ESPNU
Just Right
Sports extra Orange
Core
Esquire
No
No
Access
Euro News
No
World News Extra
No
Flama
No
Orange, Blue
No
Food Network
Live a Little
Orange, Blue
Access
Fox
Yes or VOD
Blue
Yes or VOD
Fox Business
Live a Little
No
Access
Fox College Sports Atlantic
No
No
Elite
Fox College Sports Central
No
No
Elite
Fox College Sports Pacific
No
No
Elite
Fox News
Live a Little
No
Access
Fox Sports 1
Live a Little
Blue
Access
Fox Sports 2
Go Big
Blue
Access
Fox Sports Prime Ticket
Just Right
No
No
France 24
No
World News Extra
No
Freeform
Live a Little
Orange
Access
Fuse
Just Right
No
No
Fusion
Just Right
World News Extra
Elite
FX
Live a Little
Blue
Access
FXM
Go Big
No
Elite
FXX
Live a Little
Blue
Access
FYI
Go Big
Lifestyle extra
No
Galavision
Live a Little
Orange, Blue
No
Golf Channel
Go Big
Sports extra Blue
Core
GSN
Just Right
Comedy extra
No
Hallmark
Live a Little
Lifestyle extra
No
Hallmark Movies & Mysteries
No
LIfestyle extra
No
HBO
PREMIUM ($5/month)
PREMIUM
PREMIUM, Ultra
HDNet Movies
No
Hollywood extra
No
HGTV
Live a Little
Orange, Blue
Access
Hi-Yah
No
No
Elite
History
Live a Little
Orange, Blue
No
HLN
Live a Little
News extra
Access
HSN
No
No
No
IFC
Just Right
Orange, Blue
Core
Ion
No
No
No
Impact
No
No
Elite
Investigation Discovery
Live a Little
No
Access
JusticeCentral.TV
Just Right
No
No
Lifetime
Live a Little
Orange, Blue
No
LMN
Just Right
Lifestyle extra
No
Local Now
No
Orange, Blue
No
LOGO
Go Big
Comedy extra
No
Longhorn Network
Just Right
No
No
Machinima
No
No
Elite
Maker
No
Orange, Blue
No
MGM-HD
No
No
Elite
MLB Network
Just Right
No
No
Motors TV
No
Sports extra
No
MSNBC
Live a Little
News extra Blue
Access
MTV
Live a Little
Comedy extra
No
MTV Classic
Go Big
No
No
MTV2
Live a Little
Comedy extra
No
Nat Geo Wild
Go Big
Blue
Elite
National Geographic
Live a Little
Blue
Access
NBA TV
Go Big
Sports extra
Core
NBC
Yes or VOD
Blue
Yes or VOD
NBC Sports Network
Just Right
Blue
Access
NDTV 24/7
No
World News Extra
No
News 18 India
No
World News Extra
No
Newsy
No
Orange, Blue
No
NFL Network
No
Blue
Core
NFL Red Zone
No
Sports extra (Blue)
PREMIUM (Core and up)
NHL Network
Go Big
Sports extra
No
Nick Jr.
Live a Little
Blue
No
Nickelodeon
Live a Little
No
No
Nicktoons
Live a Little
Kids Extra Blue
No
ONE World Sports
No
No
Elite
Outdoor Channel
No
No
No
Outside Television
No
Sports extra
Elite
OWN
Just Right
No
Access
Oxygen
Just Right
Lifestyle extra Blue
Access
Palladia
No
No
Elite
PBS
No
No
No
Poker Central
No
No
Elite
Polaris
No
Orange, Blue
Elite
POP
No
No
Access
QVC
No
No
No
Revolt
Go Big
No
No
RFD TV
Live a Little
No
No
Russia Today
No
World News Extra
No
Science
Just Right
No
Access
SEC Network
Just Right
Sports extra Orange
Core
Showtime
No
No
PREMIUM, Elite
Spike
Live a Little
Comedy extra
No
Sprout
Go Big
No
Elite
Starz
Gotta Have It
PREMIUM
No
Sundance TV
Go Big
Hollywood extra
Core
Syfy
Live a Little
Blue
Access
TBS
Live a Little
Orange, Blue
Access
TCM
Live a Little
Hollywood extra
Core
Teen Knick
Live a Little
Kids extra Blue
Elite
Telemundo
Live a Little
No
No
Tennis Channel
Go Big
No
No
The Weather Channel
Live a Little
No
No
TLC
Live a Little
No
Access
TNT
Live a Little
Orange, Blue
Access
Travel Channel
Just Right
Orange, Blue
Access
truTV
Live a Little
Blue (Orange comedy extra)
Access
TV Land
Live a Little
Comedy extra
No
TVG
Go Big
No
No
Universal HD
No
No
Elite
Univision
Live a Little
Blue (Orange Broadcast extra)
No
Univision Deportes
Gotta Have It
Sports extra
No
Univision Mas
Just Right
Blue (Orange Broadcast Extra)
No
USA Network
Live a Little
Blue
Access
Velocity HD
Live a Little
No
Elite
VH1
Live a Little
Lifestyle extra
No
VH1 Classic
No
No
Elite
Vibrant TV
No
Lifestyle extra
No
Viceland
Live a Little
Orange, Blue
No
WE tv
Live a Little
Lifestyle extra
Access
WeatherNation
Live a Little
No
No
Notes
Broadcast networks including ABC, CBS, Fox and NBC are not available for live streaming in many cities, except where noted as “yes.” The term “VOD” means viewers can watch these shows on-demand 24 hours after airing.
Most RSNs (Regional Sports Networks) not listed; varies per locality
PREMIUM = Available for an additional monthly fee beyond base package
DirecTV Now package key: Live a Little = $35/month (Local ABC, Fox, NBC broadcasts included in select markets) Just Right = $50/month Go Big = $60/month ($35 / month introductory price) Gotta Have It = $70/month
Sling TV package key: Orange = $20/month Blue = $25/month other “”extras”” = another $5 /month each (Sports extra with Blue is $10) Broacast Extra: ABC, Univision and Univision Mas available to Sling Orange subscribers in select cities
PlayStation Vue package key: (for New York, Los Angeles, Chicago, Philadelphia, Dallas, San Francisco, Miami ONLY) Access (Base) = $40/month Core = $45/month (includes Access channels, some Regional Sports Networks) Elite = $55/month (includes Access and Core channels) Ultra = $75/month (includes Access, Core and Elite channels, plus HBO and Showtime)
(for all other cities, where ABC, CBS, Fox and NBC are available via VOD only) Access Slim (Base) = $30/month Core Slim = $35/month (includes Access channels, some Regional Sports Networks) Elite Slim = $45/month (includes Core and Access channels) Ultra Slim = $65/month (includes Access, Core and Elite channels, plus HBO and Showtime)
$5 a month each for HBO and Cinemax.
Time Warner, Inc. did its part, offering a substantial deal to DirecTV Now to allow customers to add HBO and Cinemax for just $5 a month each, substantially less than what both networks charge customers signing up a-la-carte. This also unlocks access to streaming options on both networks’ websites.
In fact, as a DirecTV Now customer, you will also become an authenticated pay television subscriber, unlocking access on various cable network websites to extra streaming and on-demand options.
The implications of DirecTV Now depend on how long AT&T extends its $35 offer, which is going to be compelling for a lot of Americans. Moffett predicts DirecTV Now could sign up a staggering 11 million Americans — at least two million cannibalized from its own DirecTV satellite customer base, six million cutting the cord on their cable company (including AT&T U-verse) and another three million cord-cutters or “cable-nevers.” Most of the latter are Millennials, and research suggests $35 may be low enough of a price point to sign them up.
AT&T is also raising concerns among internet activists because online streaming of DirecTV Now will not count against an AT&T postpaid customer’s data allowance. This zero rating scheme is seen as an end run around Net Neutrality, particularly because AT&T is not as generous with its competitors. AT&T said it will offer other video streamers the possibility of being exempted from AT&T data allowances, if they pay AT&T for the privilege.
How It Works/Signing Up
AT&T DirecTV Now starts with the Google Chrome 50+, Safari 8+ or Internet Explorer 11+ (on Windows 8 and up) web browsers or the DirecTV Now app. AT&T recommends Chrome for desktop viewing. The service doesn’t work with Firefox, Microsoft Edge, or legacy browsers.
The first step is registering for a 7-day free trial. Before handing over your credit card number, if you scroll down you will find a small free preview option is also available that includes a largely useless streaming barker channel promoting the service and a respectable collection of video on demand options from basic cable networks. The free video streaming option will give you a clue about how the service is likely to perform on your internet connection and devices. For the record, DirecTV Now now supports:
Support for other devices like Roku is coming next year.
Customers must be within the United States to use the service. If you travel abroad or to any U.S. territories like Guam, the Virgin Islands, or Puerto Rico, DirecTV Now will stop working until you return. When you sign up, keep in mind your billing zip code will mean a lot when it comes to accessing regional sports and local broadcast channels. DirecTV Now uses your billing zip code and your actual location to determine whether you are qualified to access regional sports networks and local stations.
Score a Free Apple TV Player or Amazon Fire TV Stick
Apple TV (4th Generation): Effectively free after prepaying for three months of service.
If you are looking to score an Apple TV (4th generation) or an Amazon Fire TV Stick, you will want to skip the 7-day free trial and enroll in a paid plan immediately, which will allow you to select which player you want. If you want the Apple TV, you will prepay for three months at $35 a month ($105). The Amazon Fire TV Stick only requires you to prepay for the first month of service ($35). One device per email address, but you can sign up for multiple accounts (using individual email addresses) and get a device for each — especially useful for larger families that could run into DirecTV Now’s two-stream limit.
Consider your choices before enrolling. If you want to add premium channels or upgrade your plan, and you select the three-month prepay option to grab an Apple TV Player, adding premium channels like HBO and Cinemax or moving to a higher plan will result in three months of prepaid charges for those upgrades as well, billed automatically to your credit card on file — which amounts to a $30 charge if you select HBO and Cinemax. After your promotional prepaid term ends, your account will continue to be billed at the $35 (plus any add-ons) rate until you cancel. AT&T covers you for the forfeited first free week by extending your bill date out by seven days. Allow 2-3 weeks for the device(s) to be shipped to you.
You can also sign up at an AT&T owned and operated retail store, but be aware AT&T “authorized” reseller stores are not participating in this promotion. That may allow you to bring home a device today.
Don’t care about the device promotions? Take the 7-day free trial, but be aware that you are giving AT&T your credit card number and charges begin immediately after the free week ends unless you cancel. Here’s how:
From your User Account overview page, select Manage My Plan.
Select the Cancel Plan link.
Choose one of the listed reasons.
Select Cancel Nowto confirm cancellation.
Your subscription will continue until the end of the billing cycle. No refunds or credits are provided for partial months. Your account will revert to Freeview demo status after you cancel a subscription. You can add a subscription package back at any time.
Oddly, AT&T is not charging sales tax for New York, California, Maryland or Virginia residents. Customers in states like Tennessee where AT&T provides local phone service were most likely to face sales taxes. Those signing up early are in the best position to exploit what appears to be an oversight, or it represents the first time the New York Department of Taxation and Finance left money on the table.
Streaming from Your AT&T Wireless Device Does Not Count Against Your Data Allowance
If you’re a DirecTV Now and AT&T Wireless customer, streaming most DirecTV Now movies and programs over the AT&T wireless network won’t count against your data usage allowance, according to AT&T. But believe it or not, AT&T’s fine print indicates advertisements and non-streaming app activity do count! There are some other important disclosures to be aware of:
You must be on the AT&T Wireless network within the U.S. (U.S. territories are not qualified for zero rating);
You must be a postpaid, not a prepaid AT&T wireless customer to qualify and must not have “data block” on your mobile line;
If you are grandfathered on an unlimited data plan, using DirecTV Now will not count against the 22GB data threshold which subjects you to speed throttling;
This offer may disappear at any time and/or is subject to change.
DirecTV Now Qualifies You as an Authenticated Pay Television Subscriber
Many cable networks require customers enter their cable, satellite, or telco TV login credentials to unlock video streaming and on-demand features. DirecTV Now is a qualified provider for these websites (more coming):
Other networks are not yet enabled for DirecTV Now. CNN, for example, has a prompt for DirecTV satellite customers to log in, but DirecTV Now has its own account registration system.
Local Channels Are Very Spotty
Local over the air channels are very limited on DirecTV Now and are geographically restricted. You can access these channels only if you are located in or very near to the cities listed below and your billing zip code is in the same area. If you travel outside of the immediate area, live streaming will stop working until you return.
ABC* NBC** FOX and Telemundo are covered by DirecTV Now in selected cities. CBS is not available on the service at all at this time.
Atlanta, GA: WAGA-TV
Austin, TX: KTBC
Boston, MA: Telemundo East
Charlotte, NC: WJZY
Chicago, IL: WLS-TV, WMAQ, WFLD, Telemundo East
Dallas-Ft Worth, TX: KXAS, KDFW-TV, Telemundo East
Denver, CO: Telemundo East
Detroit, MI: WJBK
Fresno-Visalia, CA: KFSN-TV, Telemundo East
Gainesville, FL: WOGX
Hartford-New Haven, CT: WVIT
Houston, TX: KTRK-TV, Telemundo East
Las Vegas, NV: Telemundo East
Los Angeles, CA: KABC-TV, KNBC, KTTV, Telemundo East
Miami-Ft Lauderdale, FL: WTVJ, Telemundo East
Minneapolis, MN: KMSP-TV
New York, NY: WABC-TV, WNBC, WNYW, Telemundo East
Orlando-Daytona, FL: WOFL
Philadelphia, PA: WPVI-TV, WCAU, WTXF-TV, Telemundo East
Phoenix, AZ: KSAZ-TV, Telemundo East
Raleigh-Durham, NC: WTVD-TV
San Diego, CA: KNSD
San Francisco/Oakland/San Jose, CA: KGO-TV, KNTV, KTVU
Tampa-St Petersburg, FL: WTVT
Washington, D.C.: WRC, WTTG
*Not available on Internet Explorer 11 on Windows 7. **NBC live stream available on mobile and desktop devices only.
Giving the Service a Test
Stop the Cap! enrolled as an ordinary customer this morning and gave the service a rigorous test, including multiple streams over our 50/5Mbps internet connection. The service debuted today, and there is little doubt there is intense interest from consumers, so we expected some performance problems from the initial demand. We didn’t see any evidence of traffic congestion, however, and that is a good sign.
AT&T’s John Stankey explaining DirecTV Now.
A similar test of Sling TV did not perform as well during peak viewing times, when streaming problems emerged. DirecTV Now seems to be built to withstand intense demand.
One customer with a 6Mbps U-verse internet connection “in the boonies” was impressed the video quality of DirecTV Now was high even on a relatively slow DSL-like connection.
“This blows SlingTV away,” the person shared. “I only have U-verse 6Mbps internet service and it is not pixelated or buffering at all. Looks exactly like my regular DirecTV picture.”
AT&T published these recommendations for DirecTV Now customers regarding internet connection speeds:
150kbps – 2.5Mbps – Minimum broadband connection speed for Mobile devices
2.5 – 5.0Mbps – Recommended for HD quality
We’ve been led to believe DirecTV Now should perform equivalently to 1080i HDTV service (depending on the video source of course). We cannot say we agree it does right now. We noticed significant artifacts on high-motion video and picture graininess that left us feeling this was closer to a 720p HD experience. It isn’t possible to say whether the video player reduced playback quality because of internet traffic issues we were unaware of or if this is how the picture is supposed to look. It did not significantly detract from the viewing experience and the lack of buffering and pixelation was far more important to us.
AT&T store in NYC.
DirecTV Now would serve adequately as a cable TV replacement if it had local station coverage and some type of DVR. At present, DirecTV Now is limited to a “Restart” feature that allows you to restart shows already in progress on certain channels, but you cannot fast-forward or record a restarted show. Once AT&T introduces a cloud-based DVR and fills out the local station lineup, this service could be lethal to overpriced cable TV packages.
AT&T’s marketing attempts to undercut the powerful position of inertia by setting an unknown time limit for customers to enroll in the $35 a month video package. If you don’t sign up today, you may not get the “free” Apple TV or Amazon Fire Stick and a respectable cable TV package for just $35 a month — about half what cable operators are charging these days for their bloated video packages. AT&T doesn’t care if you stick with your current cable provider and signup for DirecTV Now, if only to grab free streaming video equipment while sampling the service. They get their money either way.
Had AT&T permanently kept the price at around $35, many consumers would likely sit back and wait for AT&T to sort out the streaming contract issues it has with the TV networks — CBS in particular, and come up with a DVR solution before those potential customers decided to sign up and make the change. Based on several “hot deals” websites, the mentality among many consumers is to “lock in” the $35 price now and wait for AT&T to build out the package while continuing to invest $35 a month on it. That doesn’t seem so bad when you get free electronics as part of the deal.
Our Final Take
AT&T’s DirecTV Now is a potential winner and worth signing up for because of the introductory price and free equipment offers. But if you decide not to disconnect your cable/satellite television service, it is probably safe to drop DirecTV Now after your prepayment expires and return to resume service a little later. There will probably be some warning when AT&T will end the introductory price for the service, and interested customers can hop back on board before that date arrives. DirecTV Now will be a formidable competitor, but it will fight against consumer resistance to confront the cable company and cut cable’s cord until it solves the local channels issue and has a credible DVR option. The service could also use an add-on to make adding additional concurrent streams possible and more affordable than just signing up for a second account.
Don’t count out Big Cable just yet. With data caps and other internet overcharging schemes, Comcast, Cox, Suddenlink, and others can play games with usage allowances to deter customers from streaming all of their video entertainment online at the risk of blowing past their allowance. DirecTV Now’s $35 price won’t mean much after overlimit fees begin appearing on your internet bill.
The president-elect’s choice for chairing the Federal Communications Commission may conclude there is little reason to even have a regulatory agency for telecommunications.
Donald Trump has gone farther to the right than any president-elect in modern history, at least in how he has chosen to staff his transition team. Having a place on that team is traditionally seen as a fast track to getting a plum cabinet position or leadership role in Washington’s bureaucracy, and Mr. Trump’s choices for overseeing tech and telecom policy have more in common with Ayn Rand than Ralph Nader.
Two of the top picks for his FCC transition team are true believers in the “laissez-faire/the free market always knows best” camp, but both have also been on the payroll of Big Telecom companies that believe special favors are perfectly acceptable.
The notorious D.C. revolving doorman Jeffrey Eisenach, now a leading contender for the next chairman of the FCC, is a man with so many hats that the New York Timespublished an exposé on him, noting it has become hard to tell whether Eisenach’s views are his own, those of his friends at the corporate-friendly American Enterprise Institute (AEI), or those of various telecom companies like Verizon that have had him on the payroll.
Eisenach has been heavily criticized for his especially close ties to telecom companies, fronting their positions at various Washington events often under the cover of his role as a “think tank scholar” at AEI. Eisenach despises Net Neutrality with a passion, and has used every opportunity to attack the open internet protection policies as overregulation. At the same time, Eisenach’s consulting firm was also doing work on behalf of the cellular telephone industry, including Verizon and other cell companies.
Eisenach is exceptionally casual about disclosing any paid financial ties, and has received criticism for it. His prominence as a member of the Trump transition team is therefore curious, considering incoming vice president Mike Pence has tried to clean the transition team of lobbyists.
Eisenach
Trump’s other leading contender is Mark Jamison, a former lobbyist for Sprint who now works for AEI. Jamison has received less attention and scrutiny from the telecommunications press, but in some cases his views, well-represented on his blog, are even more extreme than those of Mr. Eisenach.
Does customer involvement in regulation improve outcomes? Not always, according to PURC Director Mark Jamison. Speaking at the Australian Competition and Consumer Commission annual conference in Brisbane, Australia, Dr. Jamison explained that the key question is, “Who do we expect to change when regulators and customers engage?” Most discussion on customer engagement is about customers informing regulators about customer preferences and utility practices. Learning by regulators is important, but so are the building legitimacy, ensuring regulator integrity, and engaging in adaptive learning that are largely about changing customers. An over emphasis on changing regulators can result in pandering to current norms, which hinders institutional strengthening and adaptive work.
In that same report, Jamison echoed some of the same sentiments he has made on his blog, questioning the wisdom of regulating telecommunications policies, providing subsidies to ensure affordable telephone service (Lifeline), subsidizing rural broadband expansion, and maintaining the core concept of universal service, which means assuring every American that wants utility service can affordably get it.
Jamison even questioned the need for the FCC in its current form, particularly overseeing rate regulation, fair competition, and enforcing rules that overturn the telecom industry’s cartel-like agreement on mandated set-top boxes (and rental fees), Net Neutrality and interconnection agreements and fees, and consumer protection:
Most of the original motivations for having an FCC have gone away. Telecommunications network providers and ISPs are rarely, if ever, monopolies. If there are instances where there are monopolies, it would seem overkill to have an entire federal agency dedicated to ex ante regulation of their services. A well-functioning Federal Trade Commission (FTC), in conjunction with state authorities, can handle consumer protection and anticompetitive conduct issues.
Content on the web competes well with content provided by broadcasters, seeming to eliminate any need for FCC oversight of broadcasters. Perhaps there is need for rules for use of the airwaves during times of emergency, but that can be handled without regulating the content providers themselves.
The only FCC activity that would seem to warrant having an independent agency is the licensing of radio spectrum. Political interference in spectrum licenses would at least dampen investment and could lead to rampant corruption in the form of valuable spectrum space being effectively handed out to political cronies.
Jamison
Jamison’s theories are interesting, but in the real world they are impractical and frankly untrue. Readers of Stop the Cap! have long witnessed the impact of the insufficiently competitive telecom marketplace — higher broadband fees, data caps, and relentlessly terrible customer service. The costs to provide service have declined, but prices continue to rise. For many consumers, there is barely a duopoly for telecom services with cable companies taking runaway victory laps for providing 21st century broadband speeds while an area’s phone company continues to try to compete with underinvested DSL. The FTC has been a no-show on every important telecom issues of our time, in part because the industry got itself deregulated, leaving oversight options very limited.
It wasn’t the FTC that halted AT&T’s attempted buyout of T-Mobile and Comcast didn’t lose its struggle to acquire Time Warner Cable because of the FTC either. Pushback from the FCC and Department of Justice proved to be the only brakes on an otherwise consolidation-crazed telecom sector.
Oversight of broadcasting remains important because unlike private networks, the airwaves are a publicly owned resource used for the good of the American people. Jamison would abandon what little is left of regulations that required broadcasters to serve the public interest, not just private profit motives. Programming content is not the only matter of importance. Who gets a license to run a television or radio station matters, and so does the careful coordination of spectrum. It is ironic Jamison theorizes that a lack of regulation (of spectrum) would lead to political interference, rampant corruption, and cronyism. Anyone who has followed our experiences dealing with many state regulatory bodies and elected officials over telecom mergers and data caps can already use those words to describe what has happened since near-total deregulation policies have been enacted.
Public and private broadband competitors like local communities and Google have been harassed, stymied, and delayed by organized interference coordinated by incumbent telecom companies. Allowing them off the leash, as Jamison advocates, would only further entrench these companies. We have a long history in the United States dealing with unfettered monopoly powers and trusts. Vital infrastructure and manufacturing sectors were once held captive by a handful of industrialists and robber barons, and consumers paid dearly while those at the top got fabulously rich. Their wealth and power grew so vast and enduring, we are still familiar with their names even today — Rockefeller, Vanderbilt, Morgan, Schwab, Mellon, Duke, and Carnegie, just to name a few.
Jamison wrote a blog entry mapping out how to ultimately destroy the effectiveness of the FCC:
Take direction from politicians,
Promote partisan divides,
Change the language in orders after the FCC votes,
Ignore the facts, or at least manipulate them.
Jamison intended to argue that represented the current state of the Obama Administration’s FCC, but it is just as easy to ponder what comes after the Trump-lit bonfire of burned regulations and oversight, leaving only Big Telecom companies and their paid mouthpieces to manipulate the facts.
Jamison also undercuts his own argument in two other ways: first by declaring Michael Powell one of the great FCC chairmen of the modern era (after leaving the FCC he became president of the country’s biggest cable industry lobbying group) and second by relying extensively on quoting people with direct and undisclosed financial ties to the telecom companies that will directly benefit from implementing Jamison’s world views.
New York Times: In a 2014 email, Mr. Eisenach encouraged Michael O’Rielly, a Republican FCC commissioner, to use an American Enterprise Institute event to “lay out the case against” internet regulations.
Who doesn’t ultimately matter much in this debate, according to Jamison, are customers and consumers, whose input in these discussions is dismissed as either trendy or misinformed. No similar conclusions are forthcoming from Mr. Jamison about the influence and misinformation emanating from huge telecommunications companies that keep more than a few of his self-interested sources in comfortable suburban Virginia homes, driving their nice cars to and from the offices of shadowy think tanks that receive direct corporate funding or go out of their way to hide their benefactors.
Appointing either Mr. Eisenach or Mr. Jamison to the Federal Communications Commission would be the ultimate rubber stamping of business as usual in Washington, exactly what Donald Trump ran against. That may make Verizon or Comcast “great again,” but it certainly won’t help the rest of the country.
AT&T’s rivals are likely to cry foul over the company’s practice of “zero rating,” in which it exempts its own video services from data-cap usage. The Wall Street Journal’s Shalini Ramachandran explains how this could impact the proposed AT&T-Time Warner merger. (2:44)
Be Sure to Read Part One: Astroturf Overload — Broadband for America = One Giant Industry Front Group for an important introduction to what this super-sized industry front group is all about. Members of Broadband for America Red: A company or group actively engaging in anti-consumer lobbying, opposes Net Neutrality, supports Internet Overcharging, belongs to […]
Astroturf: One of the underhanded tactics increasingly being used by telecom companies is “Astroturf lobbying” – creating front groups that try to mimic true grassroots, but that are all about corporate money, not citizen power. Astroturf lobbying is hardly a new approach. Senator Lloyd Bentsen is credited with coining the term in the 1980s to […]
Hong Kong remains bullish on broadband. Despite the economic downturn, City Telecom continues to invest millions in constructing one of Hong Kong’s largest fiber optic broadband networks, providing fiber to the home connections to residents. City Telecom’s HK Broadband service relies on an all-fiber optic network, and has been dubbed “the Verizon FiOS of Hong […]
BendBroadband, a small provider serving central Oregon, breathlessly announced the imminent launch of new higher speed broadband service for its customers after completing an upgrade to DOCSIS 3. Along with the launch announcement came a new logo of a sprinting dog the company attaches its new tagline to: “We’re the local dog. We better be […]
Stop the Cap! reader Rick has been educating me about some of the new-found aggression by Shaw Communications, one of western Canada’s largest telecommunications companies, in expanding its business reach across Canada. Woe to those who get in the way. Novus Entertainment is already familiar with this story. As Stop the Cap! reported previously, Shaw […]
The Canadian Radio-television Telecommunications Commission, the Canadian equivalent of the Federal Communications Commission in Washington, may be forced to consider American broadband policy before defining Net Neutrality and its role in Canadian broadband, according to an article published today in The Globe & Mail. [FCC Chairman Julius Genachowski’s] proposal – to codify and enforce some […]
In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre. Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers. Ted Rogers and Jim Shaw drew a line on the western Ontario […]
Just like FairPoint Communications, the Towering Inferno of phone companies haunting New England, Frontier Communications is making a whole lot of promises to state regulators and consumers, if they’ll only support the deal to transfer ownership of phone service from Verizon to them. This time, Frontier is issuing a self-serving press release touting their investment […]
I see it took all of five minutes for George Ou and his friends at Digital Society to be swayed by the tunnel vision myopia of last week’s latest effort to justify Internet Overcharging schemes. Until recently, I’ve always rationalized my distain for smaller usage caps by ignoring the fact that I’m being subsidized by […]
In 2007, we took our first major trip away from western New York in 20 years and spent two weeks an hour away from Calgary, Alberta. After two weeks in Kananaskis Country, Banff, Calgary, and other spots all over southern Alberta, we came away with the Good, the Bad, and the Ugly: The Good Alberta […]
A federal appeals court in Washington has struck down, for a second time, a rulemaking by the Federal Communications Commission to limit the size of the nation’s largest cable operators to 30% of the nation’s pay television marketplace, calling the rule “arbitrary and capricious.” The 30% rule, designed to keep no single company from controlling […]
Less than half of Americans surveyed by PC Magazine report they are very satisfied with the broadband speed delivered by their Internet service provider. PC Magazine released a comprehensive study this month on speed, provider satisfaction, and consumer opinions about the state of broadband in their community. The publisher sampled more than 17,000 participants, checking […]