“Consumers have enthusiastically embraced Data Free TV,” the letter reads. (AT&T owns DirecTV.)
In the first month that the program has been active, nearly 3 million customers have taken advantage of it, according to AT&T. The company has more than 140 million wireless subscribers in North America. It's no wonder why: The program promises consumers something for nothing, giving them unlimited consumption of data-heavy video without the burden of paying for that video consumption out of their own data plans.
But regulators have taken aim at Data Free TV, saying in a Nov. 9 letter that the arrangement could allow AT&T to pick winners and losers in the media ecosystem by “obstruct[ing] competition.”
As AT&T uses Data Free TV to promote its proprietary services to consumers, other companies could be harmed by the move, critics have said. For example, if Netflix refused to play on AT&T's terms, consumers who watched “Orange is the New Black” on AT&T's data network could find that they were depleting their available data. This would lead to DirecTV having an advantage over Netflix. And the gap would become even more pronounced for smaller media and Internet companies, skeptics say.
In its letter Monday, AT&T responded to those claims by arguing that its practice of exempting DirecTV is good for consumers and that it doesn't exclusively benefit its own bottom line. “AT&T makes its sponsored data program available to all content providers on the same terms and conditions,” the letter said. “In fact, AT&T went further in meeting the nondiscrimination requirement than traditional law would require.”
AT&T also said that for companies that want to give their users “free” data, AT&T will charge them the same rate “regardless whether they are big or small or how much data they purchase.”
Ultimately, this is a fight that could resolve itself in AT&T's favor. The FCC, now controlled by Democrats, will soon, under President-elect Donald Trump, be controlled by Republicans. Conservatives are expected to roll back many of the policies that were put in place during President Obama's tenure, including the rules that allow the FCC to probe “zero rating” practices.