The FCC Is Putting A Damper On AT&T’s Wireless/DirectTV Now Plans

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December 2, 2016 2:28pm NYSE:T

Telecom and media giant AT&T Inc. (NYSE:T) is already in hot water with regulators regarding a potential anti-competitive practice tied to its wireless business and new DirecTV now streaming television service.

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.


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