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FCC Tells Us Their Neutrality Rules Prevent Pay-Per App
But ISPs Will Simply Argue They're Pricing Creatively...

Last December we noted that deep packet inspection (DPI) hardware vendors were trying to sell wireless carriers on the idea of billing consumers not only for more consumption (which they already do) but an additional surcharge if they wanted to use various apps and services, from Skype to Facebook. Last week we noted that Dutch wireless ISP KPN appears set to make this pricing vision a reality, charging extra fees if users want access to specific apps, like mobile IM or VoIP clients. It's a clear violation of net neutrality, in that it involves using carrier power to constrict consumer access to competing services. KPN however, insists it's simply creative pricing.

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We noted at the time that given the FCC had largely exempted wireless networks here in the States from their new neutrality rules, there isn't much preventing this kind of "creative" pricing from arriving here in the States. Responding to our report, the FCC wrote us to insist they believe that their rules do, in fact, protect consumers from this kind of pricing.

"Our rules do prohibit this kind of behavior," the FCC's Mark Wigfield tells Broadband Reports. "See paragraph 99, which pertains to mobile, and prohbits blocking applications that compete with the providers primary service offering -- voice and video telephony -- and you can make a strong case that text also competes with voice and so blocking SMS applications would be barred," he says. The pertinent bit from the FCC's order (pdf):

quote:
A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network management.
"Also, paragraph 67 prohibts charging a fee in order to block," says Wigfield:
quote:
67. Some concerns have been expressed that broadband providers may seek to charge edge providers simply for delivering traffic to or carrying traffic from the broadband provider’s end-user customers. To the extent that a content, application, or service provider could avoid being blocked only by paying a fee, charging such a fee would not be permissible under these rules.
Except carriers eager to differentiate tiers by blocking specific apps will argue they're not really blocking apps -- they're simply engaged in "creative" pricing tailored to specific consumer needs. In fact that's essentially what upstart wireless carrier MetroPCS did with their recent LTE pricing, which involves charging a higher rate if the user wants access to specific apps like YouTube or the full Internet. Despite consumer advocates noting this appeared to run contrary to the idea of open devices and platforms, the FCC didn't so much as make a peep concerning MetroPCS's new pricing.

As such -- assuming the FCC's rules withstand legal challenge -- it seems like it wouldn't be hard for an ISP to discriminate by app, just so long as they do so cleverly.