FCC Report: AT&T And Verizon Are Violating Net Neutrality With a little more than a week left in office, FCC boss Tom Wheeler continues to belatedly take aim at AT&T and Verizon, claiming their zero rating plans violate net neutrality and are anti-competitive. In a letter and full report sent to multiple Senators (pdf), Wheeler re-iterated that AT&T's cap-exemption of its DirecTV Now streaming service, and Verizon's cap-exemption of its Go90 streaming service, put competitors at a distinct market disadvantage.

And its heart, this is ISPs taking advantage of limited broadband competition to impose arbitrary and unnecessary usage caps and overage fees on consumers, with the added bonus that these restrictions can then be used to protect their legacy TV interests from streaming video. The FCC has been investigating zero rating since last year, though the report comes too late, with too little actual enforcement (read: none), to be of real benefit to consumers, most of whom still don't understand the issue because they labor under the illusion that zero rating simply means "free stuff." AT&T and Verizon have long claimed that giving their own content this advantage is perfectly fair, because companies can pay them extra if they want the same, cap-exempt content advantage. But the report makes it repeatedly clear the FCC found that these costs placed added, unnecessary burdens on competitors just looking to compete with what are often significantly larger companies. "While observing that AT&T provided incomplete responses to staff inquires," Wheeler wrote to Senators, "the report states that the limited information available supports a conclusion that AT&T offers Sponsored Data to third-party content providers at terms and conditions that are effectively less favorable than those it offers to its affiliate, DirecTV." We hope the government continues to support a competitive marketplace that lowers costs and increases choice for consumers.”

-AT&T The FCC's original rules don't specifically ban zero rating, but do give the agency the ability to take a look at the practices on a "cases by case basis" to determine if there is competitive harm under the net neutrality "general conduct" rule. In this case, the FCC clearly now believes both companies are hurting competition via the use of zero rating and are violating the FCC's rules. The FCC's original rules don't specifically ban zero rating, but do give the agency the ability to take a look at the practices on a "cases by case basis" to determine if there is competitive harm under the net neutrality "general conduct" rule. In this case, the FCC clearly now believes both companies are hurting competition via the use of zero rating and are violating the FCC's rules. AT&T, unsurprisingly, didn't agree with the FCC's findings. "This practice, which has been embraced by AT&T and other broadband providers, has enabled millions of consumers to enjoy the latest popular content and services -- for free," AT&T said, ignoring the other, anti-competitive side of the conversation completely. "We hope the government continues to support a competitive marketplace that lowers costs and increases choice for consumers.” Of course AT&T's Sponsored Data program doesn't really save anybody money. The plan just shifts part of AT&T's cost burden on to companies attempting to compete with AT&T's DirecTV Now streaming service, consumer costs for mobile data remain among the highest in any developed nation, and any cost savings consumers might have seen is pocketed by AT&T. Of course this is all largely irrelevant, and the FCC's actions come too little, too late. The FCC's downright glacial investigation has taken more than a year, and the agency only began clearly criticizing AT&T and Verizon at a point where there's no meaningful path to actual enforcement. The incoming new Trump FCC has made it repeatedly clear it not only plans to gut net neutrality rules, but defang and defund the FCC entirely. Ajit Pai, on the shortlist to be the next FCC boss, declared that the report "does not reflect the views of the majority of commissioners," and that it "will not have any impact on the commission’s policymaking or enforcement activities following next week’s inauguration." In other words: it's nice that the FCC finally got around to realizing that usage caps and zero rating can be (and are being) used anti-competitively, it's just a shame that it comes just as a new incoming administration prepares to gut net neutrality protections entirely. With either no enforcement or no rules at all, concerns over zero rating may wind up being quaint in light of what's to come. In other words: it's nice that the FCC finally got around to realizing that usage caps and zero rating can be (and are being) used anti-competitively, it's just a shame that it comes just as a new incoming administration prepares to gut net neutrality protections entirely. With either no enforcement or no rules at all, concerns over zero rating may wind up being quaint in light of what's to come.







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Most recommended from 33 comments



Simba7

I Void Warranties

join:2003-03-24

Fromberg, MT 14 recommendations Simba7 Member Like they care.. ..seriously.. Once the new FCC boss comes in, Net Neutrality will get vaporized (or severely neutered) and streaming will be the new Cable TV of the industry.



Don't be surprised when they pull Zero Rating on wired services as well. shmerl

join:2013-10-21 5 recommendations shmerl Member This dancing around should end We should put strong pressure on the Congress to make real Net Neutrality laws which would prohibit such behavior once and for all.