AT&T to Roll Out Streaming-Only DirecTV Now Service Next Month

With AT&T and Time Warner, the deal will be scrutinized by antitrust regulators, who assess for anti-competitive effects, and possibly by the Federal Communications Commission as well, which can take a broader look.

Consumer advocates say a larger AT&T has every incentive to make Time Warner (HBO, CNN) content licensing more hard for streaming video providers, while also using zero rating to give its own content an unfair advantage.

AT&T agreed to buy the entertainment company for $85.4bn in a deal that has been scrutinised by regulators and lawmakers in the United States, including Democrats and Republicans. Sling TV begins at $20 for 28 channels and goes as high as $40 for a 48-channel multi-screen package.

In response to assertions that the deal will ultimately raise prices for consumers due to narrowing competition, AT&T CEO Randall Stephenson launched the charm offensive, telling the Wall Street Journal's Rebecca Blumenstein, "I'm not surprised [by the criticism]".

Should AT&T decide to offer a similar zero-rated video streaming service, it could add HBO or other Time Warner content to that service - a strategy that may drag eyeballs away from Netflix, at least in the mobile environment, and give AT&T a bigger advantage in the streaming arena.

Regulators would probably not want AT&T to keep Time Warner's movies, shows and sports from competitors (which would also leave consumers with fewer options). YouTube has been working for months on the paid live-TV streaming service, called Unplugged. Case in point: Shares of Time Warner Cable were up after Comcast's deal to buy it unraveled as the market anticipated other bidders.

The senators actually meant to invite Time Warner Inc.

AT&T, the largest USA pay-TV provider, has been working for three years to build a video-delivery system that can carry multiple live feeds to broadband-connected homes. The phone company bought satellite TV company DirecTV a year ago.

The potential merger would join one of the most dominant telecommunications company with a leading provider of entertainment video and broadcasting, allowing smoother and more innovative content delivery to consumers, the companies have said.

Time Warner is seeing strong demand for its content, not only in the United States but also in global markets.

Sanders warned that the proposed deal could lead to a wave of mergers in an already concentrated media industry.

  • Zachary Reyes