FCC Says AT&T's 'DirecTV Now' Could Be Violating Net Neutrality With Cheap Streaming Service Price Arrangement

AT&T announced that DirecTV Now will offer over 100 channels for only $35 per month, and Federal Communications Commission regulatory board is concerned over the pricing arrangement of the new service. The FCC wrote a letter to AT&T seeking more information about the company's DirecTV Now streaming service, which might harm both competitors and consumers.

The average expanded basic cable TV package is $90 per month in the United States, and with the AT&T's offer, it could give way to more cord-cutting in the cable business, Deadline reports. The report adds that AT&T is waiving data charges for AT&T Mobility consumers who will subscribe to DirecTV Now. Waiving of data charges by a telco is called "zero rating."

The zero practice rating is questioned by the FCC, saying that it contravenes net neutrality regulations. The regulatory board examines services provided by telcos to determine if it could harm competition and consumers when it is evident that the company is leaning more towards its service than others, case in point Sling TV and Hulu.

In a report by The Verge, AT&T argues that DirecTV Now streaming service provider will pay for sponsored data program AT&T has offered. But even as there is a sponsored data to be paid, AT&T still owns DirecTV Now, and while it claims to pay the telco, the company might not even shell out for any of its services, which FCC believes could harm the Internet and its competition by offering an unfavorable advantage.

AT&T pleads that the DirecTV Now is a popular service and the telco is hoping that the regulators will not strip the service to the subscribers as it makes cord-cutting easier by offering the cheaper alternative to cable TV packages, reports Wall Street Journal.

Since 2014, AT&T have offered companies to pay for free data charges. But, no streaming content providers have done so by far.