FCC slams AT&T, Verizon in zero-rating guidelines

By:
James Pearce
Published on:

Regulator has released new advice on net neutrality and has criticised both operators for current zero-rating offers

The Federal Communications Commission (FCC) has issued new guidelines on “zero-rating”, approving a service offered by T-Mobile, but criticising services offered by Verizon and AT&T.

In its latest report, the FCC’s Wireless Telecommunications Bureau said AT&T’s Sponsored Data offer its DirecTV service, and Verizon’s Go90 FreeBee package, could be in breach of rules that govern prioritising internet services over others.

The report outlines how the regulator plans to make future decisions about what breaches strict net neutrality laws it introduced in the US last year.

The report focuses on “sponsored data” offers, in which telcos allow their customers to use certain services without dipping into their data allowances, with other companies picking up the tab.

In the report, the FCC accused AT&T of treating its own DirecTV offering differently to unaffiliated sponsored data offers, making the system uncompetitive be favouring its own subsidiary. IT had already warned both AT&T ad Verizon about its offers in separate letters late last year.

“AT&T appears to view the network cost of Sponsored Data for DIRECTV Now as effectively de minimis,” the report explained. Verizon’s FreeBee system was also potentially discriminatory, it added.

T-Mobile’s BingeOn video service, however, was given the thumbs up because it “charges all providers the same zero rate for participating”.

The FCC concluded: “Mobile broadband providers are experimenting with a variety of sponsored data and zero rating initiatives. While this dynamic environment has benefited consumers, these business arrangements may raise many of the same economic and public policy issues involving network owners that the Commission has long considered. 

“In particular, sponsored data offerings by vertically integrated mobile broadband providers may harm consumers and competition in downstream industry sectors by unreasonably discriminating in favour of select downstream providers, especially their own affiliates.”

It comes just a week before Donald Trump is due to be inaugurated as the 45th President of the United States. Trump is an outspoken opponent of net neutrality, and has appointed a number of critics of the policy to his FCC transition team, meaning the new guidelines introduced by outgoing FCC chief Tom Wheeler could become irrelevant fairly quickly.