AT&T’s Stephenson: ‘There will be advantages to using DirecTV Now on our network’

randallstephenson
AT&T CEO Randall Stephenson

AT&T CEO Randall Stephenson said his company’s virtual MVPD service, DirecTV Now, will debut in November and will work best on AT&T’s mobile-centric network infrastructure.

“There should be advantages to using DirecTV Now on AT&T’s network, and there will be,” Stephenson said to investors Monday during AT&T’s third-quarter earnings call. The executive didn’t elaborate specifically on what those advantages are. 

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Already, however, concern is growing among rival video suppliers that AT&T will use its network to favor content acquired in its just-proposed $85.4 billion takeover of Time Warner Inc.

Also speaking Monday at a Wall Street Journal event, Netflix CEO Reed Hastings said he approves of the deal, “as long as HBO’s bits and Netflix’s bits are treated the same." 

“That would be a starting place. We really want to make sure that to the consumer, to the system, that basically it doesn’t give an unfair advantage to HBO over Netflix. If it’s open competition, we love that," he said.

Meanwhile, MoffetNathanson analyst Craig Moffett dismissed the notion that Stephenson and AT&T have plans to, say, zero rate DirecTV Now – and by extension, HBO Now – services on AT&T networks. 

“As a practical matter, you can almost forget about all strategies that depend on differentiating distribution with preferential access to owned content,” Moffett said in a note to investors. “With the inevitable consent decree conditions, you can also forget about zero-rating Time Warner (or DirecTV, and the planned DirecTV Now) content on AT&T’s wireless or wired network.”

For his part, Stephenson isn’t as sure as Moffett. Asked during Monday’s call how the FCC might deal with net neutrality concerns related to the Time Warner merger, Stephenson said, "We don't know, but we'll put it out for the regulators. The sausage will come out the way the sausage comes out."

Taking a... higher road, Hastings said anything that’s bad for cable is good for the video industry. 

“I think AT&T is going to be very aggressive about building a national competitor to all of the cable companies,” Hastings said. “If they pull that off, that would be in the consumer’s interest.”