AT&T Launches DirecTV Now: The Cable Bundle Goes Online

AT&T just unveiled DirecTV Now, its long-awaited internet TV service that delivers 100+ channels for $35 per month with no contract, no installation, and no satellite dish. The service launches in late November.

If those numbers sound aggressive, they are. A comparable cable TV package from Comcast or DirecTV's traditional satellite service runs $60 to $100 per month before equipment fees, taxes, and the inevitable promotional-pricing-expiration sticker shock. AT&T is undercutting its own DirecTV satellite service by half.

But the most interesting thing about DirecTV Now isn't the price. It's what AT&T is doing with data caps — and what that means for the future of competitive streaming.

What's in the Bundle

DirecTV Now offers four tiers:

Live a Little — 60+ channels for $35/month. Includes major networks, ESPN, CNN, and most basic cable favorites.

Just Right — 80+ channels for $50/month. Adds more sports and entertainment options.

Go Big — 100+ channels for $60/month. Includes regional sports networks and additional premium content.

Gotta Have It — 120+ channels for $70/month. The complete package short of premium movie channels.

HBO and Cinemax can be added for $5 each — significantly cheaper than the typical $15 to $18 standalone price for HBO Now.

The introductory $35 price for the Live a Little tier is a promotion locked in for as long as you keep the service. New subscribers after the promotional period will pay $60 for the same 60-channel package, which makes the math considerably less impressive.

The Speed Requirement

Streaming TV requires real broadband. AT&T recommends at least 12 Mbps for a single HD stream and more for households with multiple simultaneous viewers. Realistically, a family that wants to watch DirecTV Now in HD on multiple TVs needs 25+ Mbps, and that's before accounting for everything else the household is doing on the internet.

For households on slower DSL connections — and there are many — DirecTV Now isn't going to work well. A 6 Mbps DSL line can handle one standard-definition stream, maybe one HD stream if nothing else is happening, but multiple HD streams simultaneously? Forget it. The same speed limitations that have made streaming a struggle for slow connections apply to DirecTV Now.

This is one of the implicit assumptions of the cord-cutting movement: that most households have broadband fast enough to replace cable. It's true in cities and suburbs with good cable service. It's much less true in rural areas where DSL is the only option.

The Zero-Rating Controversy

Here's where things get politically interesting. AT&T has announced that DirecTV Now will be exempt from the data caps on AT&T wireless plans. AT&T mobile customers can stream DirecTV Now over LTE without the data counting against their monthly cap.

That sounds great until you consider the implications. Netflix, Hulu, Sling TV, YouTube TV — every other streaming service does count against AT&T's data caps. AT&T is giving its own product a free pass while every competitor's product carries a built-in data tax.

This is "zero-rating," and it's been a contentious issue in the net neutrality debate for years. The 2015 Open Internet Order didn't ban zero-rating outright. Instead, the FCC said it would evaluate zero-rating arrangements case by case to determine whether they harm competition. AT&T's DirecTV Now exemption is exactly the kind of arrangement that's likely to draw scrutiny.

The FCC has reportedly been investigating AT&T's earlier "Sponsored Data" zero-rating program, which lets content providers pay AT&T to exempt their traffic from caps. DirecTV Now takes that concept further — AT&T is essentially paying itself to provide its own service without data fees, while charging competitors for the same privilege.

If you're an AT&T wireless customer, the practical effect is straightforward: streaming DirecTV Now is "free" data, while streaming Netflix eats your monthly cap. That price signal nudges you toward DirecTV Now even if you'd otherwise prefer Netflix. Multiply that nudge across millions of AT&T wireless subscribers, and zero-rating becomes a powerful tool for shaping the streaming market.

What This Means for Cord Cutting

DirecTV Now isn't the first streaming TV service. Sling TV launched in early 2015 at $20/month. PlayStation Vue followed later that year. YouTube TV is in development. The category is getting crowded.

But DirecTV Now is the first service backed by a major telecom company with the financial resources to subsidize aggressive pricing. AT&T can lose money on DirecTV Now for years if it has to, propping up the service through wireless subscription growth and content licensing deals from its DirecTV satellite business and pending Time Warner acquisition.

That's bad news for independent streaming services that don't have telecom backing. It's also bad news for cable companies, which now face streaming competition from a deep-pocketed rival.

For consumers, the early prognosis is mostly positive. More streaming options means more competition, which generally means better service and lower prices. The asterisk is the zero-rating issue — if streaming services backed by ISPs get unfair advantages over independent competitors, the long-term effect could be reduced competition, not increased.

Should You Switch?

If you're on Comcast or another cable provider paying $80+ per month for TV, DirecTV Now's $35 introductory tier is genuinely tempting. The channel selection covers most of what cable subscribers actually watch. You can quit anytime — no contract, no early termination fee.

The catches:

Local channels. DirecTV Now's local channel availability varies by market. In some cities you get NBC, CBS, ABC, and Fox. In others you get streaming-only feeds or no locals at all. Check your specific market before signing up.

Picture quality. Streaming TV depends on your internet connection. A bad connection means buffering, pixelation, and dropped streams. Cable and satellite are more reliable in this respect.

DVR limitations. Most streaming services have weak DVR offerings compared to traditional cable boxes. DirecTV Now doesn't include cloud DVR at launch, though AT&T promises to add it later.

Channel changes are slow. Compared to traditional cable, switching channels on a streaming service takes 2 to 5 seconds instead of being instant. Minor annoyance, but real.

For households with reliable broadband, decent local channel coverage, and modest expectations, DirecTV Now is one of the most aggressive deals in pay-TV today. For households still depending on slow DSL or in areas with spotty broadband, traditional cable or satellite is still the more reliable choice.

The future of TV is streaming over broadband connections. DirecTV Now just made that future arrive a little faster — and considerably more controversial.