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

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