The source of the controversy is that AT&T doesn’t count wireless data usage when users are viewing its brand new DirecTV Now streaming television service. From MarketWatch:
In a pair of letters sent Thursday, the Federal Communications Commission warned that so called zero-rating, which makes the data used by certain video services free for the carriers’ wireless customers, could harm competition and consumers.
It’s not just AT&T that suffering some admonishment from regulators. To keep things fair, the FCC sent the same note to Verizon (NYSE:VZ), which has a similar streaming TV component of its Fios TV service.
While the letters to the two companies are just a preliminary measure, and no official action has been taken, the news certainly puts a damper on AT&T’s plans to bundle its services together. Investors should no doubt keep an eye on this situation as it develops over the next few months.
AT&T shares fell $0.35 (-0.90%) to $38.55 in Friday afternoon trading. Year-to-date, T has gained 12.05%, versus a 12.05% rise in the benchmark S&P 500 index during the same period.