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AT&T Joins Unlimited-Data Bandwagon (T)


Taking a page from T-Mobile US Inc. ( TMUS), ATT Inc. ( T) announced late last week it will offer its wireless customers the ability to save on data charges by streaming content at a lower quality.

Known as throttling, ATT said that starting in early 2017, customers can choose to use Stream Saver, which provides DVD-quality, 480p screen resolution at now extra cost. The move is similar to T-Mobile’s successful Binge On program, which gives customers access to unlimited streaming on their smartphones. It also comes ahead of the launch of DirecTV Now, ATT’s streaming service that will cost $35 a month. ATT is planning to launch it sometime this month.

Offering lower-quality video may not bode well with regulators, which are gearing up to look into ATT’s proposed acquisition of Time Warner and when the Federal Trade Commission is expressing concern over its upcoming DirecTV Now service. In the case of ATT and Time Warner, there is a lot of opposition from politicians including President-elect Donald Trump, who said before the election that he would block the deal if he won.

FCC Has Issues With DirecTV Now

As for the Federal Communications Commission, last week the government agency sent a letter to ATT taking issue with ATT’s plan to allow customers to stream DirecTV Now without eating away at their mobile data and charging other companies for the same capability. ATT calls this practice Sponsored Data, but the FCC argued that while it isn’t violating net neutrality it is hurting competitors and their customers. (See also: Net Neutrality Could Wither Under Trump.)

The FCC went on to say the practices on the part of ATT appear to be “acting in ways that may harm the open Internet, such as preferring [its] own or affiliated content [and] demanding fees from edge providers.” ATT started the practice of zero-rating, or not counting, streaming content against mobile caps in September for DirecTV and said the same thing would apply to the DirecTV Now service.

Unlimited Data Sign a of the Times

For ATT and the other wireless carriers offering unlimited data or ways to not eat away at data caps is becoming the norm given the success T-Mobile has had with its Binge On promotion. In September, T-Mobile preannounced that it already surpassed second-quarter levels in terms of postpaid phone and prepaid net customer additions and backed its financial guidance for the third quarter and the full year.

For the third quarter, T-Mobile said it added 969,000 postpaid customers, up from 890,000 in the second quarter. For the year, T-Mobile is now forecasting it will add 3.7 million to 3.9 million postpaid customers for 2016, higher than its past forecast for postpaid customers increase of 3.4 million to 3.8 million (See also: T-Mobile Beats Q3 Views, Stock Surges.)

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