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Before theFEDERAL COMMUNICATIONS COMMISSIONWashington, DC 20554In the Matter ofStatus of Competition in the Delivery ofVideo Programming))))MB Docket No. 16-247COMMENTS OF AT&TSince its founding, AT&T has been a leader in innovation, using cutting-edge technologyto connect people throughout the United States and around the globe. AT&T is continuing thatproud tradition in the video marketplace. Today, the combined AT&T/DIRECTV is a morerobust competitive alternative to traditional multichannel video programming distributors(MVPDs). Combining the companies’ rich technology resources has increasedAT&T/DIRECTV’s capabilities and the speed in which it can make innovative video offersavailable to consumers. AT&T Services, Inc. is pleased to provide the Commission withinformation about AT&T’s video offerings in response to the Commission’s 18th VideoCompetition Report public notice. 1The U.S. video distribution marketplace is a rousing success story for consumers. Notonly are consumers the beneficiaries of fierce competition between traditional MVPDs usingsatellite, cable, and IPTV platforms, consumers are embracing an ever-expanding choice of overthe-top (OTT) offerings that are increasingly competing with traditional pay TV plans. MVPDsare adapting to these competitive pressures by offering a wide variety of programming packages1Media Bureau Seeks Comment on the Status of Competition in the Market for the Delivery of VideoProgramming, MB Docket No. 16-247, Public Notice, DA 16-896 (rel. Aug. 5, 2016) (Public Notice).

at different price points, innovative functionality, and apps that enable subscribers to view payTV content on any device in and out of their homes. As a result of this dynamic competition,consumers have never had more control over the video they watch, when they watch it, and howthey watch it.DIRECTV remains # 1 in customer satisfaction, topping cable providers again for the16th year in a row. 2 And both DIRECTV and U-verse have received the most recent J.D. Powerand Associates awards for Residential Television Provider Satisfaction. 3 DIRECTV and U-verseeach offer more than 200 channels in full-time high definition (HD). DIRECTV’s On Demandservice allows subscribers to watch over 20,000 movies and shows, including the latest movieblockbuster, on any compatible device and its latest HD DVR allows subscribers to record up tofive programs at once and store up to 200 hours of HD programming. Similarly, with U-verse,subscribers may record up to four programs at once and store 165 hours of HD programming or460 hours of standard definition programming. The DIRECTV and U-verse Apps also allowsubscribers to download their home DVR to their phone or tablet. DIRECTV’s HD DVRsharness the power of the Internet to bring subscribers interactive features right on their TV,including Pandora radio and free HD TV Apps that enable subscribers to check the weather, upto-the minute sports scores, and, among other things, the subscriber’s NFL fantasy league.DIRECTV is proud to be the first MVPD offering subscribers a dedicated 4K Ultra HD(UHD) channel, available 24/7, launched this past April. DIRECTV 4K’s inaugural live eventwas all four rounds of the Masters Tournament, which happened to be the first-ever live 4K2Based on the 2016 American Customer Satisfaction Index survey of customers ranking their own TVprovider’s performance.3See der-satisfaction.2

UHD broadcast in the U.S. 4K UHD programming enhances the picture quality and viewingexperience by offering consumers four times the picture resolution of 1080p HD. DIRECTVwas also the first MVPD to begin offering video on demand in 4K, which it did in 2014.DIRECTV features the MLB Network Showcase Game of the Week live in 4K UHD, NotreDame football in 4K, and it recently announced a deal with NBCUniversal that will enable it tofeature even more sporting events in 4K UHD. 4MVPDs understand that they must provide subscribers with the content they desire. Thatis why DIRECTV and U-verse offer consumers a combined 448 channels of programming. Ofthat, almost 93% of those channels are “independent” as the Commission has defined that term. 5Additionally, because it knows consumers want more choices from their video provider, AT&Tis not satisfied with simply offering the best pay TV service in the industry. AT&T will soonbegin offering consumers game changing OTT services. Later this year, AT&T will makeavailable an OTT offering that will feature or replicate much of what is available fromDIRECTV today called “DIRECTV Now.” This offering reflects the flexible content choices,viewing options and simple, transparent pricing that many consumers want. AT&T intends to bethe first company to deliver that flexibility, along with an effortless customer experience. Thisoffer will provide a broad range of consumers with greater freedom and choice to watch andeven buy premium content, regardless of how and where they enjoy their entertainment. Thisoffering will have no annual contracts, satellite dishes or set-top boxes so that consumers may4NBCUniversal, work 33121; Daniel Frankel, AT&T adds NBCU to DirecTV Now Bundle withmulti-year licensing renewal, FierceCable (Sept. 13, 2016), available 5Promoting the Availability of Diverse and Independent Sources of Video Programming, MB Docket No.16-41, Notice of Inquiry, FCC 16-19, at n.4 (2016).3

access DIRECTV video services over a wired or wireless Internet connection from any providerand from virtually any device – smartphone, tablet, Smart TV, streaming media hardware or PC.Today, as a result of bilateral, market-driven arrangements made without regulatoryintervention, consumers are using MVPD apps to watch video content on a sweeping array ofcompetitor devices, including Smart TVs, Kindle Fire, Apple TV, Google Chromecast, andRoku; iOS and Android tablets and smartphones; game consoles; and PCs and Macs. 6 More than460 million IP-enabled retail devices in the U.S. market today support one or more MVPD apps,and 66% of them support apps from all of the top 10 MVPDs. At last count, MVPD appssupported twice as many retail devices as there are leased set-top boxes. 7 On average, thereare four retail devices with available MVPD apps in consumer homes, well exceeding the 2.6MVPD set-top boxes per home. 8 Forty percent of American pay TV subscribers used apps toview their subscription content in 2015, and year-over-year viewing via MVPD app increased102% in 2015. 9There also is no reason to believe that MVPDs will stop supporting the use of apps. AsChairman Wheeler himself recently stressed, video consumers “have more options than ever,”6See, e.g., David Katzmaier, What You Can Watch on Apple TV, Roku, Fire TV, Chromecast and AndroidTV, CNET (April 6, 2016) (“These days just about every major entertainment app is available on justabout every living room streaming device. You probably have five ways to stream Netflix.”), available 7See Letter from Paul Glist, Davis Wright Tremaine LLP, to Marlene H. Dortch, FCC, MB Docket No.15-64, at 2 (filed Feb. 11, 2016).8Joint Statement on DSTAC Report, MB Docket No. 15-64, at 2 (FCC filed Aug. 28, 2015), available athttp://apps.fcc.gov/ecfs/comment/view?id 60001099145.9See Jeff Baumgartner, TV Everywhere Continues Its Climb, Multichannel News (Feb. 25, 2016),available at here-continues-its-climb/402839. Seealso AT&T Comments, MB Docket No. 16-42, at 1-11 (filed April 22, 2016) (AT&T Navigation DeviceComments); AT&T Reply Comments, MB Docket No. 16-42, at 1-13 (filed May 23, 2016).4

creating enormous “competition for eyeballs.” 10 In the context of that vigorous competition,MVPDs must compete by providing consumers what they want, which for millions and millionsof Americans, is the ability to access content through an app on the device of their choosing. 11As it has in prior years, the Commission requests specific data from MVPDs and directbroadcast satellite (DBS) providers, in particular. Since AT&T acquired DIRECTV, DIRECTVhas added one million new subscribers for a combined AT&T/DIRECTV total subscriber countof 25.3 million at the end of the second quarter. 12 We attach to these comments a copy of ourcurrent DIRECTV and U-verse offers and prices. 13 We also provide a list of the markets whereDIRECTV provides local-into-local broadcast service. 14In response to the Commission’s request for information about DBS video packagesoffered in non-contiguous states, we can confirm that DIRECTV offers the same packages at thesame terms and rates in Alaska and Hawaii as it does in the 48 contiguous states. As we haveexplained in prior filings, because of location and technical constraints, subscribers in Alaskaand Hawaii still require nominally larger (1.2 meter) receive antennas than subscribers in thelower 48 states. Use of any size receive antenna in Alaska is protected by the Commission’sOver-The-Air Reception Devices (OTARD) rules. 15 These rules, however, do not protect the 1See, e.g., AT&T Navigation Device Comments at 11-14 & Katz Decl. ¶¶ 16-29 (attached thereto).12See Q2 2016 AT&T Earnings, Investor Briefing at 6 (July 21, 2016), available athttp://www.att.com/Investor/Earnings/2q16/ib final 2q16.pdf.13See Exhibit 1.14See Exhibit 2.1547 C.F.R. § 1.4000.5

of larger dishes in Hawaii, so Hawaiian subscribers continue to lack the protections available tosubscribers in the rest of the country. 16 Without the larger dish, subscribers in Hawaii cannotreceive service at acceptable reliability levels. The Commission should adjust its OTARD rulesso that subscribers in Hawaii can enjoy the same benefits and effective protections as subscribersin the rest of the country.Finally, the Commission also requests information about video programming-related feesthat some MVPDs assess end users to recover, in part, retransmission consent fees charged bylocal broadband stations and sports programmers. 17 DIRECTV is a national provider, withnationally priced products. However, regional sports vary significantly market to market.Rather than pass along the extraordinarily high cost of regional sports programming in particularmarkets to all DIRECTV customers, including a regional sports network (RSN) fee in thosemarkets that benefit from this programming makes sense. As the Commission notes, this fee, atleast for DIRECTV, only partially recovers its regional sports carriage fees. 18 DIRECTVidentifies whether a consumer will have a “Regional Sports Fee” and the amount in the “FirstMonth’s Bill” available to prospective customers on DIRECTV’s website. DIRECTVsubscribers that have a Regional Sports Fee will see this fee as a separate line-item on their bill.DIRECTV also makes available additional RSN fee information on its website. U-versecurrently assesses a Broadcast TV Surcharge, which is designed to recover a portion of theamount local broadcasters charge AT&T to carry their channels. U-verse also discloses this16See id. § 1.400(a)(1)(i)(B) (referring to antennas that are one meter or less in diameter or located inAlaska).17Public Notice at 8.18Id.6

charge and the amount to prospective customers via a first bill preview tool on U-verse’swebsite, and additional information about the charge is available online.AT&T is excited to extend its tradition of being an innovation leader to the videomarketplace and to continue providing consumers with the best video programming serviceavailable.Respectfully Submitted,/s/ Cathy CarpinoCathy CarpinoChristopher HeimannGary L. PhillipsDavid L. LawsonAT&T Services, Inc.1120 20th Street NWSuite 1000Washington, D.C. 20036(202) 457-3046 – phone(202) 457-3073 – facsimileSeptember 21, 2016Its Attorneys7

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