AT&T TV launched today in 10 U.S. cities — all within AT&T’s U-verse/fiber service areas, providing a comparable TV lineup to the DirecTV satellite service with discounts for bundling internet access.

Customers can begin signing up today for the service in Orange and Riverside, Calif., West Palm Peach, Fla., Topeka and Wichita, Kan., Springfield and St. Louis, Mo., and Corpus Christi, El Paso, and Odessa, Tex.

The service’s television lineup is closely comparable to the DirecTV satellite lineup, and AT&T intends its new streaming TV service to offer an alternative to those who do not want to install a satellite dish or deal with AT&T’s own U-verse TV. The biggest bundle discounts go to consumers who bundle internet and television service together. Video packages start at $59.99 and include a much larger lineup than AT&T’s streaming-only service targeting cord cutters — AT&T TV Now (formerly DirecTV Now).

These plans bundle television and internet from AT&T.

Customers bundling internet and TV service will find a deeply discounted 300 Mbps internet plan for $40 a month for the first year ($70 for gigabit service) and AT&T will include unlimited internet in any package bundling TV service (a $30/mo value). Installation fees are waived, but there is a $19.95 activation fee and an early termination fee of $15/mo for TV and $15/mo for internet for each month remaining on a two-year contract. AT&T TV requires a set-top box for each television and the first one is free. Each additional box is $120, payable up front or in 12 equal monthly installments of $10. The box is powered by Android TV and supports various apps and comes with a voice remote control.

Features include a 500-hour cloud DVR package, with recordings stored up to 90 days. You can record as many channels as you want at the same time, but we suspect premium movie channels may be excluded. The full lineup is available for streaming outside of your home and includes local major network affiliates in most markets. AT&T TV supports 4K streaming as well, and since AT&T is waiving its data cap for TV and broadband customers, you will not have to worry about any data caps. Up to three people can stream your TV lineup simultaneously. Keep in mind each television represents one stream.

AT&T makes life complicated for would-be customers with a panoply of confusing discounts, rebates, and savings that often expire after one year into a two-year contract. Customers should pay careful attention to the breakdown of the charges AT&T provides and mark your calendar so you are not surprised by the gradually rising bill.

Stop the Cap! put together a package to give you an idea of what to expect. We selected the “Ultimate” TV package, which includes just about every English language channel on the lineup. Mysteriously, the biggest exception is Hallmark Movies and Mysteries. Like AT&T TV Now, this channel is only available on the cheapest package, which makes no sense to us.

Let’s start with the TV package:

Note that the TV package is discounted significantly, but only for the first 12 months of your 24 month commitment. Also note the “Regional Sports Fee” which varies depending on the city. In this case, we chose Topeka, Kan. to build this package.

Premium movie channels are provided free for the first 90 days. The prices shown represent à la carte pricing. If you want these channels going forward, ask if a package price is available and bundle them for additional savings.

AT&T’s mini set-top box has been tested by DirecTV Now customers for almost a year. It earned mixed reviews and can be cumbersome. Keep in mind the first box is free, but each additional box costs $120, payable up front or in installments.

AT&T’s pricing for the first three months is very low, then higher prices kick in for the next 12 months unless you cancel those four premium movie channels, with still higher pricing during the second year of the two-year contract. AT&T makes things needlessly complicated and this explains the subscriber confusion about billing issues that is common with AT&T. But AT&T cannot be accused of not letting you know what to expect. In 2020, you could be paying $188.37 just for your TV lineup:

Next up is the internet portion of our order:

Note you get a $20 discount, but only during the first year. The fact you seem to owe nothing when placing the order does not mean the first month is free. AT&T is not sure what they will charge you because: “The monthly total on your bill may vary depending on your billing date and prorated monthly fees, based on the date of installation, that are applied to your account. Quoted prices don’t include taxes, fees, surcharges, shipping, or other charges including city video cost-recovery and Universal Services Fund fees, where applicable.” AT&T wouldn’t tell us exactly what those charges were.

Finally, AT&T includes some additional savings from various promotions, including an odd double gift card promotion awarding a total of $100 in Visa gift cards for signing up online:

The gift card promotion ends September 15, 2019 but will likely reappear. Customers have to submit their rebate request soon after service is ordered and spend the gift card(s) within six months to avoid forfeiture.

AT&T plans to roll out AT&T TV nationwide during 2020. But the company seems to be favoring markets where it already offers broadband service. It is not known if or when AT&T will introduce this streaming alternative to DirecTV in areas where other phone companies dominate. Customers do not have to use AT&T for internet access to subscribe.

Cox Contour TV

Cox Communications is planning to launch a new cloud DVR service targeting the 25% of customers who use the company’s Contour set-top box, which is powered by Comcast/Xfinity’s X1.

The new service will launch later this year, according to Light Reading, but exact pricing and storage options are not yet known.

Assuming Cox follows other licensees of the X1 platform, which include Rogers and Shaw Communications, the new service will likely  bundle a cloud storage option for its current DVR set-top box customers. Comcast offers its current DVR customers 60 hours of free cloud storage, which is less than the 150 hours of local storage usually available on Comcast’s set-top DVR boxes. Rogers’ “Ignite TV” offers 200 hours of HD or 4K storage with a maximum recording storage time of one year, and Shaw’s BlueSky TV will launch its own cloud DVR add-on service later this year under a similar licensing agreement with Comcast.

The biggest benefit of cloud storage is remote access to DVR recordings on portable devices when streaming away from home, a major advantage available to streaming cable TV customers subscribed to DirecTV Now, YouTube TV, Hulu, and others. Because of copyright considerations, cable companies follow a more complicated path to provide subscribers with remote access to their DVR recordings. Comcast customers “check out” recorded shows to downloaded for mobile viewing much the same way Amazon.com allows customers to offer friends the chance to “borrow” a Kindle book. The customer accesses a recorded show, chooses the option to download for remote viewing, and then watches on the go. When finished, a customer “returns” the show, allowing it to be seen on the set-top DVR once again.

Ironically, Charter Spectrum customers are likely to be among the last to see cloud DVR service, despite the fact Charter’s current CEO, Thomas Rutledge, was instrumental in helping clear the way for U.S. cable operators to offer cloud DVR service. In 2006, Cablevision sought to introduce a remote storage DVR and immediately ran into lawsuits, coordinated by Time Warner (Entertainment)’s Turner Broadcasting. Two years later in 2008, Cablevision won a key appeals court victory allowing cloud storage DVRs to be introduced. Charter Spectrum customers may have access to cloud DVR service late this year, or sometime in 2020.

Xfinity Flex

Comcast today announced the launch of Xfinity Flex, a $5/month service targeting Comcast’s internet-only customers with a streaming set-top box capable of accessing Comcast-approved apps including Netflix, Amazon Prime Video, HBO, and other services.

Subscribers must have a Comcast-supplied internet connection, no video package, and an xFi Gateway (a cable modem/router combination that costs between $10-13 a month to lease). After the new service becomes available nationwide next week, those enrolling will receive a small set-top box comparable to a Roku capable of streaming 4K HDR video. Comcast also supplies its own voice remote, and bundles access to Comcast’s apps that manage in-home Wi-Fi, mobile, security, and automation services for easy access.

“Xfinity Flex will deepen our relationship with a certain segment of our Internet customers and provide them with real value,” said Matt Strauss, executive vice president of Xfinity Services for Comcast Cable. “For just five dollars a month, we can offer these customers an affordable, flexible, and differentiated platform that includes thousands of free movies and shows for online streaming, an integrated guide for accessing their favorite apps and connected home devices, and the ease of navigating and managing all of it with our voice remote.”

A closer look at the device and the fine print suggests customers may want to carefully evaluate whether Flex offers good value for money. Instead of buying a traditional streaming set-top box like Roku, customers can only lease the Flex box for $5 a month… indefinitely. Comcast is not including any programming with the box, just hardware to access streaming content already available, often for free, on other streaming or desktop platforms. Flex’s search function is supposed to make it easier to find programming across a wide number of services, but you will have to subscribe to each service independently.

Comcast also warns that using Flex will count against your monthly data cap.

The 4K capable Roku 3920R can be purchased from Best Buy for $39.99.

Comcast has also carefully designed the box to protect the cable company from any competitive threats. Competing streaming services like DirecTV Now, Sling TV, YouTube TV, Hulu Live, and other services are intentionally blocked, another example of life without net neutrality. The only available path to cable TV programming using Flex is to visit the ‘easy upgrade’ app that will sign you up for Comcast’s X1 cable TV service, presumably the one you cord-cut before you signed up for Flex.

The service is also designed to protect other cable companies from competition from Comcast. Only Comcast internet customers can purchase Flex service, so it is not available to customers of Charter Spectrum, Cox, Altice, or other cable operators.

The $5 subscription fee is also misleading, because you will also have to rent Comcast’s own xFi Gateway, which costs between $10-13 a month, instead of using your own cable modem. That suddenly makes Flex a $15 a month service that essentially just gives you access to a walled garden of the services Comcast approves of for around $180 a year (including the Gateway).

Comcast probably won’t attract a big audience for Flex because of all the restrictions it comes with.

Consider buying a streaming set-top box outright instead of living with Comcast’s restrictions and mandatory gateway fees. Shoppers can find basic Roku devices for purchase under $30, with more capable 4K-compatible devices starting at around $40.

Altice USA is upgrading the firmware powering its much-promoted Altice One set-top box to introduce new functionality and integrate popular web services into the viewing experience.

Altice One v2.0 is rolling out to about 200,000 customers that have the advanced box. Among the new features:

• Recorded DVR content stored in the cloud can now be played back anywhere using the Altice One mobile app.
• YouTube Kids and a variety of streaming services will enhance viewing options beyond YouTube, Netflix, and a few other supported streaming services.
• More 4K content will be available, including Premier League soccer, available on channel 200.
• Remote control voice search will be available for the YouTube app.
• Show restart feature expanding to 20 extra channels, including A&E, History Channel, Lifetime, Viceland, Fox News, Fox Sports 1, FX and National Geographic.

The Altice One box, which carries a higher rental fee than traditional cable set-top boxes, has now been rolled out to about 80% of its Cablevision/Optimum and Suddenlink service areas. But only a minority of subscribers choose the box, and it gets poor reviews from customers because of bugs and other unexpected behavior.

Altice One v2.0 promotional video, courtesy of Altice. (0:30)

In the not-too-distant future, AT&T will be delivering television programming to its DirecTV and U-verse TV customers over the internet instead of satellite or the variant of DSL its U-verse product uses.

Appearing at Morgan Stanley’s European Technology, Media and Telecom Conference, AT&T chief financial officer John Stephens told investors AT&T will be able to slash costs of television delivery by eventually retiring satellite service and rolling its U-verse TV into a single, self-installed, DirecTV set-top box product that will rely on broadband.

“It’s a device that allows us to, instead of rolling a truck to the home, we roll a UPS or FedEx truck to the home and deliver a self-install box,” Stephens said. “This allows the customer to use their own broadband. We certainly hope it’s our own fiber but it could be on anybody’s broadband. And they get the full-service premium package that we would normally deliver off satellite or over our IP-based U-verse service.”

AT&T employees are currently beta testing the new box and the company hopes to begin rolling it out to subscribers in 2019. Assuming they respond positively to the online streaming experience, AT&T will begin transitioning DirecTV customers away from its existing satellite platform and towards internet delivery. Stephens said the benefits are obvious: no more installers, roof-top satellite dishes, and service calls to deal with signal problems.

“The key is, as we roll that out to full production or full availability to our customers, you will see subscriber acquisition costs come down significantly because it’s the cost of that box as opposed to the cost of an employee rolling a truck, climbing the roof and installing the satellite [dish],” Stephens added.

The transition to less costly delivery platforms may be just in time for AT&T, which saw historically large subscriber losses on its DirecTV satellite platform. Other providers reported significant losses as well, demonstrating cord-cutting is a growing trend in the pay television industry. DirecTV’s expensive fleet of satellites carry not only nationally distributed networks but hundreds of local television stations beamed regionally to customers. The economics of satellite television may become questionable if customers continue moving away from linear, live television. Internet delivery services are much less costly and offer more robust on-demand viewing options.

Rural Americans may face the consequences of any transition. They are least likely to have suitable broadband service capable of supporting DirecTV’s streaming video service and could lose access to television altogether if AT&T (and Dish) retire their satellite fleets. That may be a small concern to AT&T, which has 25 million subscribers, the vast majority of which have access to broadband internet.