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FCC Tells AT&T It Has 'Serious Concerns' About Zero Rating

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."

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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.

Most recommended from 52 comments



vdiv
Premium Member
join:2002-03-23
Reston, VA

6 recommendations

vdiv

Premium Member

Nomenclature

Perhaps the definition of an "Internet service provider" needs to be codified to explicitly exclude any sort of meddling or limiting the access. Otherwise it is not really Internet service anymore, it is more akin to what AOL did with walled gardens. If the incumbents refuse to provide an unfettered Internet access then they should lose any and all protections (i.e. pole access, no taxes, etc) and should not be allowed to advertise the service as such.
pandora
Premium Member
join:2001-06-01
Outland

4 recommendations

pandora

Premium Member

Good news everyone ..

The obvious is obvious!

TestBoy
Premium Member
join:2009-10-13
Irmo, SC

3 recommendations

TestBoy

Premium Member

What difference does it make now?

Folks at FCC are getting ready to clean out their desks.
Why should AT&T - or any of them for that matter care about what FCC says?

In a few months it won't matter.

Anond2102
@charter.com

3 recommendations

Anond2102

Anon

Won't matter in a few months.

One Trump's guys are in the FCC zero rating will be allowed without issue.
etaadmin
join:2002-01-17
united state

2 recommendations

etaadmin

Member

AT$T response to the FCC

No problem everything is under control. Don't worry... trust us.