Part of AT&T's plan to win the mobile video wars is to zero rate its own services so that video streaming time doesn't rack up against users' mobile Internet data caps. However, zero rating isn't the only way AT&T plans to manage streaming activity on its mobile network. The telco has also announced that in early 2017 it will roll out a new Stream Saver program to dial back HD-quality video to standard-definition resolution (or delivery at 1.5 megabits per second) in an effort to cut down on data usage and help users make their "data go further."
The AT&T Inc. (NYSE: T) plan is similar in certain ways to T-Mobile US Inc. 's Binge On service, which also drops the quality on streaming video services. Yet there's one big difference. AT&T isn't proposing to make data plans unlimited as a benefit of throttling video, while T-Mobile does extend unlimited streaming to a number of video services as long as subscribers are willing to put up with lower video quality.
A cynical person might look at the new Stream Saver feature and note that it potentially creates a further contrast between AT&T's own mobile video services and competitive video services delivered over the AT&T mobile network. So far, the telco has not said whether it will apply Stream Saver to its own DirecTV mobile video services, but, if it doesn't, users will be faced with the default option of either streaming unlimited, high-quality video content from AT&T or streaming lower-quality content from other video services that still counts toward the monthly mobile data cap.
AT&T says that it will notify subscribers when Stream Saver is turned on next year, and that users will then have the option to turn the feature off and on again at will. The company also says that "due to the way some content owners deliver video streams, Stream Saver cannot detect and then optimize all video," although the telco hasn't specified what makes some video detectable and some video not.
Importantly, the launch of Stream Saver comes at the same time the Federal Communications Commission (FCC) has expressed concern that AT&T's practice of zero rating its video services may be anti-competitive. Both AT&T and Verizon Communications Inc. (NYSE: VZ) zero rate their own mobile video services, and the FCC remained quiet about it until very recently. However, with AT&T looking to purchase Time Warner Inc. (NYSE: TWX) and vertically integrate premium content with content distribution, the regulatory agency is now raising a red flag. (See AT&T & Trump Tangle Net Neutrality's Web.)
Given the Commission's interest, it's possible that the FCC may also want to take a closer look at video throttling in the future as it reviews the impact of zero rating.
Alternatively, it's also possible that all questions of capping data and lowering video quality will get dropped as the FCC nears its transition to a new authority under the administration of President-elect Donald Trump. Republicans are keen to roll back the FCC's net neutrality ruling from 2015, and doing so would likely put AT&T and Verizon in the clear to manage mobile data and video streaming services as they like.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading