AT&T, the second biggest mobile operator in the United States, has unveiled a paid live TV streaming service called DirecTV Now. It competes with traditional cable operators by providing over 120 channels that can be directly streamed over the internet to any smartphone, tablet, computer, or TV (using a device like Chromecast or Apple TV). The zero-rated service is quickly coming under fire for violating the principles of net neutrality however.
As The Verge reports, this service is argued to offer an unfair advantage for AT&T mobile subscribers, as data used for streaming videos on the AT&T network will not count against their monthly data caps. Meaning, if an AT&T customer is subscribed to a 1GB data plan, using DirecTV Now will not consume any data from that plan.
Other American operators have also been practising similar policies - T-mobile, the third-biggest operator in the US, has plans where data isn't counted when streaming video and music from select providers - like Amazon, YouTube, HBO, Netflix, Apple Music, Spotify, Google Play Music etc.
Earlier this year, AT&T also had launched a new service called ‘Sponsored Data’, that allowed companies to pay for data when customers are using their service (which is referred to as ‘Zero Rating’). From an Indian context, this is similar to the ‘Airtel Zero’ platform, that was unveiled last year, only to face a lot of criticism online and eventually never rolled out.
Back in 2014, Airtel launched Wynk Music, its music streaming service that competes with existing players like Gaana and Saavn. Wynk Music had lower pricing for Airtel customers, and one of the high-end plans also similarly didn’t count consumed data towards the monthly allowance. But this plan was later shelved, and today it isn’t visible on Wynk’s official website.
As suggested by The Verge, the fundamentals of net neutrality, which states that Internet service providers should treat all data on the Internet the same, are at risk in the United States. Experts have raised concerns with zero-rating, as it prevents the Internet from being a level playing field. If a company subsidises the data cost for a customer, there’s a good chance many people will want to use only that service, which stifles competition (and especially competition that doesn’t have deep pockets) and will create monopolies that could eventually slow the rate of innovation.
From an Indian scenario, telecom operators are also trying to create new revenue streams because the old ones like calling and SMS are being affected by the rise of VoIP and instant messaging respectively. New entrants with deep pockets like Reliance Jio are also giving incumbent operators a run for their money with aggressively priced data plans and unlimited calling/ SMS on some plans. All operators are aggressively wanting to be more than just companies that build pipes through which the Internet flows.