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AT&T Chief Talks Up DirecTV Now And Prospects For Tax Cuts

Deadline logo Deadline 1/25/2017 David Lieberman
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AT&T CEO Randall Stephenson sounded like a happy guy — about DirecTV Now’s start, and Donald Trump’s — in a call with analysts to talk about Q4 earnings.

The telco chief touted DirecTV Now and its attraction of 200,000 customers since it launched on November 20.

That’s “a really fast start,” he said. He compared it to the 2007 launch of AT&T’s U-verse wired video and broadband business where “it took a year and a half to get to 200,000 customers.”

Some DirecTV Now customers have reported excessive buffering or substandard video quality. CFO John Stephens told analysts that “we’re learning more about the subscriber base and the platform while we’re working through the expected challenges that come with launching a new, innovative service of this magnitude.”

He described early subscribers as “more urban, younger and apartment dwellers than the typical linear customer.”

Stephenson added that he’s a fan of the new president, with whom he met before his inauguration last week.

“I was impressed,” he said. “I was meeting with a CEO … I left with a degree of optimism” about plans for regulatory and tax reform. Trump specifically wants to reduce taxes on businesses while his new FCC Chairman Ajit Pai wants to give Internet service providers more leeway to determine how to deal with content providers and price offerings.

Current net neutrality rules are “suppressive of investment,” Stephenson said.

AT&T plans to “go hard” on offering its wireless subscribers services such as DirecTV Now without data charges — a policy known as zero rating. The FCC said that might violate the spirit, if not the letter, of net neutrality rules because it would put competitors, such as Dish Network’s Sling TV or Hulu, at a competitive disadvantage.

“This is a value proposition that our customers are loving,” Stephenson said. “It’s proving to be very advantageous in the marketplace for our customers.”

As for business tax cuts, the CEO said “there’s nothing that will trigger” economic growth better than that. If the rate is cut to 20%-25%, “we would step up our investment levels.”

He called the prospect of a tax cut “more than possible — it’s likely.”

AT&T has said that Stephenson and Trump did not discuss the telco’s $85 billion plan to buy Time Warner.

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