FCC is not a fan of AT&T’s and Verizon’s “zero rated” plans - unlimited data on self-branded video services

FCC is not a fan of AT&T’s and Verizon’s “zero rated” plans - unlimited data on self-branded video services
The latest rub over net neutrality is orbiting around the two largest wireless carriers in the United States. Unlike fines levied against T-Mobile a couple months ago, where the FCC ruled Team Magenta was not being fully forthcoming with the fine print of its “unlimited” data plans, the regulatory body is taking aim at AT&T and Verizon over how much these services “cost” versus what is billed to the customer, and thus create an anti-competitive market for mobile video content delivery.

AT&T and Verizon offer plans that allow video streaming of DirecTV and Go90 content without it counting against the customer’s metered data plan. Both carriers charge the video providers to pay for the data instead of the customer, thus complying with the controversial rulings by the FCC over the past couple years.

However, the FCC, in a letter sent to AT&T and Verizon this past week, asserts that because these video providers are owned by the respective carriers, they have an unsurmountable cost-advantage over any would-be competitor. The Commission claims to have done “the math” and gathers that a third-party provider like Netflix or Hulu would have to pay AT&T $47 per-month, per-customer, per 30-minutes of video streaming. AT&T charges customers $35 for DirecTV now, which certainly means the “cost” being billed for data is significantly less.

Both Verizon and AT&T state that the “zero rating” of the data saves their respective customers money, and are incredibly popular services.

If those figures are correct, there is an argument that “sponsored data” rates are significantly more expensive for non-AT&T-affiliated companies. No action has been taken by the FCC yet, but the head of the Commission’s Wireless Telecommunications Bureau, Jon Wilkins, says the agency’s preliminary findings are “these practices inhibit competition, harm customers,” and interfere with the spirit of maintaining an “open internet.”

Those hoping to see decisive action soon are likely to be disappointed. A new administration is coming to office next month, the disposition of the commissioners that sit on the FCC will change. Congressional leaders have been hammering the agency with requests to stop making significant regulatory actions until the next administration is sworn in, where it is expected many regulations will be loosened, if not eliminated.

Republican Commissioner, Ajit Pai called the agency’s current actions “sad and pointless.” A critic of the Title II ruling from last year, he added, “Any unilateral action taken by the Wireless Telecommunications Bureau at the chairman's direction in the next 49 days can quickly be undone by that same bureau after January 20, 2017.”

sources: The Wall Street Journal and CNET

FCC is not a fan of AT&T’s and Verizon’s “zero rated” plans - unlimited data on self-branded video services
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11 Comments

1. tedkord

Posts: 17094; Member since: Jun 17, 2009

It doesn't matter what the FCC thinks of the plans, in a month or two they're going to be neutered. Buckle up, this time next year you'll be paying twice as much for the same service.

2. ronjr123

Posts: 88; Member since: Feb 16, 2012

Making America Great again

3. TerryTerius unregistered

To be frank, we need to be screwed as hard as possible in order for people to actually start caring about these things. If that's what it takes, so be it.

8. jsc

Posts: 4; Member since: Jun 29, 2008

All this fake populist whining shows a complete lack of understanding of the (limits of the) original charter of the FCC. They have far overstepped their bounds as a regulatory agency. If congress wants to task them with being the micro-management extension of the FTC, then they could do that, but they haven't - and won't. I suspect we will see a much shorter leash put on the FCC under Trump, which is what needs to happen. The FCC will be limited to spectrum management and allocation. The consumer protection functions, to the extent they should exist, will fall to the FTC. "Net Neutrality" is a paper tiger, and is also completely misplaced. I'd ask any of you commenting to explain what QoS is, why it is important, how settlement-free peering works, why it has worked in the past and how Net Neutrality is becoming a solution looking for a problem. Unless you can articulate a cogent response to those questions, stop spouting BS about wireless data plans. You might as well be complaining about why water and electric utilities don't provide unlimited flat-rate plans as well.

9. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

OK, how about how Trump has said he plans to remove consumer protections from several industries to help them grow? A couple of the main ones are the Dodd–Frank Wall Street Reform and Consumer Protection Act, both put in place after the 2008 financial crisis. And he wants to drop them. Apparently we weren't screwed enough the first time around, so let's give it another go. As for Net Neutrality, I'm not sure why you want to give that much power to these ISPs and carriers. Would you rather go back to exclusive devices for each carrier and them having more power than the consumer. I'm not saying that was what Net Neutrality accomplished, but it was one of the outcomes from transitioning these companies into more of a dumb pipe than an active player. Drop it and watch them try to monetize each and every little thing there is. Judging from your response, you sound like you work for a carrier. If Net Neutrality is so bad, then why are carriers and providers the only ones really against it. Most content sites are the ones in favor of it, because they don't want to be paying through the nose to have these ISPs give them a decent amount of bandwidth. It sounds notoriously like the mob's protection racket.

14. jsc

Posts: 4; Member since: Jun 29, 2008

Of course the content sites are for it, particularly streaming content providers. Most of the cost of getting that content to the consumer comes after it leaves their servers/data centers. No, carriers are not the only ones against it, but nobody quotes what a seemingly unrelated third party has to say about it. I don't work for a carrier OR a content provider. 17 years ago I worked for one of the very early streaming content providers, but that was a different world: nobody considered the Internet to be a utility, and there was no such thing as mobile apps and data services (to speak of).

15. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

OK, so say we drop the it all and let carriers charge for who gets preferred speeds. What's to stop some of the carriers or ISPs from blocking content they don't agree with? And say they charge Netflix or Hulu more because they know more people will want them, do you think Netflix and Hulu will eat those charges, or will they pass them onto the consumer?

11. tedkord

Posts: 17094; Member since: Jun 17, 2009

Net neutrality is not a solution looking for a problem in a reality where ISPs are also content owners. And, you're comparing physical commodities to an abstract one. Data and bandwidth don't have cost associated with production - once the infrastructure is there, it doesn't cost more to transmit 1mb or 1gb. The consumer is screwed in a world where the companies are asked to police themselves. We've been there before, and the existing laws are responses to the disasters that caused.

13. jsc

Posts: 4; Member since: Jun 29, 2008

It doesn't cost more to transmit 1MB or 1GB at the same bandwidth, but consumers are going to expect they will get 1GB at the maximum throughput the network can technically support. In that regard, it costs immensely more to support every customer at at 100Mbit throughput level than 10Mbit or 1Mbit, as spectrum is a finite asset. The combination of available spectrum and the most current, operationally-feasible air interface to take advantage of it constitute the balancing act all carriers must attempt to resolve. Do I like that they favor their own content services over others? No. Is it their network to provide the services over? Yes. Again, I will use "public" utilities as a comparison because that's how the FCC wants to treat Internet services: Do you get to decide what electric production facilities provide the power to your home? In the vast majority of cases, no. Do you feel shortchanged my that? All I can say in response is that there is and was hardly a large populist movement to deregulate and decouple power production from transmission services. And hence, the grid was built around monolithic concepts of a monopoly electric utility. Hell, in some places it's illegal to take yourself off the power grid and generate your own electricity! If you are talking about the current landscape where the content owners are also the owners of the networks that provide consumer ISP services (whether they be wired or wireless), certainly the previous analogy is at the same valid and inapplicable. However, the fact is that essentially, the FCC wants it both ways. They want to treat Internet services as a utility for purposes of regulating how it is distributed ("Net Neutrality"), but also want to regulate the same distribution networks as far as interconnection to content providers. Say I'm a startup who produces a gadget that everyone wants, and needs to utilize a logistics system to ship this to my customers. I'm ramping up my production at my plant and build another million square feet of space, hire a bunch of workers, etc... but there's a problem. I need to get 85 truckloads a day to UPS or FedEx (or DHL, or USPS, or any of a number of other logistics carriers) for both receiving raw materials and shipping finished product, and the little dirt road running 14 miles to my facility can't deal with all the trucks. The rain washes it out, it isn't wide enough, it's pissing off the adjacent property owners, etc. Is it now FedEx or UPS' responsibility to pay for a nice new, paved 14 mile road to my facility to accommodate the necessary truck traffic? Hardly.

10. emteeskull

Posts: 1; Member since: Dec 04, 2016

I don't have a problem with this service. I'm not an AT&T customer. But I can subscribe to the service and watch it on my tv via my HTPC without an extra data charges through my home internet provider. If I want to go mobile and use my Verizon data then it will count against my monthly allotment. But if I use WIFI it won't count against my data either.In the end it is still MY CHOICE. Verizon is not charging more to AT&T or me for accessing that data. If a participate of the market can offer this service fine. It's when one internet provider charges more for data for content to other content providers that's when it becomes a problem.

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