DirecTV Now Subscription Signups Are Ahead Of Plan, AT&T CEO Says

Associated Press

Less than one week after its launch, DirecTV Now reached the subscriber goal that AT&T had set for December, the telco’s CEO Randall Stephenson told investors today.

Although he didn’t provide any numbers, “the early demand has been rather dramatic,” he said at the UBS Global Media and Communications Conference. In addition, the number of streaming service customers paying an additional $5 for HBO or Cinemax “is exceeding expectations.”

If anyone doubted that mobile subscribers wanted to watch long-form video “that ship has sailed,” the CEO says. And his plan to spend $85 billion for Time Warner “is the completion of the strategy.”

One day before he’s due to testify before a Senate committee about the deal, Stephenson said that the Justice Department’s antitrust review has begun. And if regulators have any concerns they “can be dealt with with conditions.”

AT&T is still determining whether it will buy licenses from Time Warner that would also require an FCC review.

As a presidential candidate, Donald Trump said that he would block the acquisition. Since the election, he has surrounded himself with advisors who believe in taking a more relaxed view of government regulation and mergers.

Stephenson says he believes a Trump administration FCC will drop efforts to guarantee an open internet. That includes the agency’s effort to limit the ability of service providers to offer pricing plans that favor their own services — including AT&T’s offer to let its wireless customers watch DirecTV Now without incurring data charges.

Since the election “those issues have, for all intents and purposes, been set aside,” he says. “A more moderate approach to some of these regulations is in the making in a Trump administration.”

He also defended the plan — known as zero rating — to waive data fees for AT&T wireless customers who subscribe to DirecTV Now.

He likened it to offering consumers free calls on 1-800 numbers, and Amazon’s free download plan for Kindle users who buy books from the e-retailer.

“Amazon was paying the data charge,” he says. “I think free is pro-consumer….There are decades of precedent on this kind of pricing.”

The FCC says that AT&T’s plan may violate the spirit, if not the letter, of net neutrality rules because it effectively raises the price of rival video services including Sling TV and Netflix.

Stephenson acknowledged that profit margins for DirecTV Now will be “fairly thin.” But he says that the company is preparing for the day when it can offer 5G wireless service, which could offer download speeds as fast as 1 Gb per second.

“That can be a fixed line [cable] replacement,” the CEO says calling DirecTV Now “a 5G service on a 4G network.”

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