The FCC this week wrote AT&T expressing concern about the company's zero rating plans. As we've noted, AT&T has joined Verizon and Comcast in excluding its own content from the company's usage caps, while still penalizing competitors like Netflix. This practice, dubbed zero rating, has been severely and routinely criticized by net neutrality advocates, who say it gives incumbent ISPs an anti-competitive advantage. US net neutrality rules don't specifically ban zero rating, only saying the FCC would examine anti-competitive issues on a "case by case basis."
But despite launching an "informal information exercise" more than a year ago to examine if zero rating is anti-competitive, the FCC has done
nothing to rein in the practice. Until today. Sort of.
According to a report in the Wall Street Journal, the FCC has sent AT&T a letter expressing concern over AT&T's practice of excluding its own content from usage caps. AT&T is expected to zero rate its upcoming DirecTV Now service, which launches later this month.
In the letter to AT&T from the FCC's Jon Wilkins, the agency states that this behavior "may obstruct competition and harm consumers by constraining their ability to access existing and future mobile video services not affiliated with AT&T."
"it is not difficult to calculate usage scenarios in which an unaffiliated provider's Sponsored Data charges alone could render infeasible any third-party competitor's attempt to compete with the $35 per month retail price that AT&T has announced for DIRECTV Now," the letter said. "Unaffiliated video providers not purchasing Sponsored Data would likewise face a significant competitive disadvantage in trying to serve AT&T Mobility's customer base without zero-rating."
But AT&T says it's not unfair because companies can get the same exclusive treatment -- provided they're willing to pay AT&T.
"While we welcome additional questions, we hope the FCC will consider the enormous value consumers find in obtaining free data or free streaming where someone else is footing the bill for their data," AT&T said in a statement provided to DSLReports.com.
"We welcome any video provider that wishes to sponsor its content in the same “data free” way for AT&T Mobility customers and we’ll do so on equal terms at our lowest wholesale rates," the company added. "Saving consumers money is something we all should support."
This is apparently part of the FCC's glacially-moving inquiry into whether this sort of behavior is anti-competitive (it is), but it comes a bit late in the game for consumers. Incoming President elect Donald Trump has made it clear he opposes net neutrality, and his telecom transition team leader is an ally of incumbent ISPs and a
fierce critic of net neutrality, meaning the FCC's inquiry comes far too late for it to be of any notable use for consumers. Numerous other countries, including Japan, The Netherlands, Norway and India ban the practice of zero rating, after regulators quickly realized it gives incumbent carriers an unfair market advantage.