Verizon and AT&T attack FCC over net neutrality

By:
James Pearce
Published on:

Both operators have hit back after the regulator announced it was investigating them over possible zero rating

Verizon and AT&T have both urged the Federal Communications Commission to drop separate investigations into the two operators over net neutrality.

The responses came just a few weeks after the FCC sent letters to both operators, accusing them of breaching net neutrality rules through zero rating, which the regulator claims could “hinder competition and harm consumers.”

In AT&T’s case, the FCC questioned whether plans to launch a promotion letting customers stream video content from subsidiary DirecTV without it using their data allowance.

In a letter of response, AT&T SVP of federal regulatory Joan Marsh said the carrier takes “sharp issue” with the regulator’s claim its proposals over DirecTV would be anticompetitive.

Marsh also said the offer had already led rivals, including Sprint, to promote counter offers, showing it was not hindering competition. Any removal of such services would have a negative impact on customers, she added. 

“The Bureau’s approach thus would deny consumers a service they value, raise prices, lower consumption, and curb the disruptive potential of Data Free TV, all in the name of preserving profit margins for individual DirecTV rivals,” Marsh wrote. 

“That approach would upend the most basic principles of American competition policy, which is designed for ‘the protection of competition, not competitors.’ And it also would scrap decades of regulatory precedent making clear that even a monopolist may provide downstream services to an affiliate as long as those services are available to others on the same terms.”

The FCC had also taken aim at Verizon over its FreeBee data product in a separate letter sent out in November. Under FreeBee, Verizon lets customer’s access internet services without paying for the data out of their allowances, with brands picking up the tab instead.

Verizon lawyer Kathleen Grillo, who penned the letter, said: We were disappointed by your December 1, 2016, letter about Verizon’s free data service, FreeBee. As you know, Verizon first rolled out our FreeBee sponsored data program last January. We discussed the program with you then, and have communicated regularly with you and your staff to answer any questions, address any concerns, and to keep you apprised as we gained experience with FreeBee and as the program has evolved. Only now, almost a year after we deployed this innovative offering and during a time of transition to a new Administration, you write to express concern with FreeBee, and specifically with the participation of go90 – Verizon’s mobile-first, over-the-top video service.

"Free data offerings like Verizon’s are fully consistent with FCC rules," Verizon told the FCC. "Yet your letter appears to take issue with Go90’s participation in  FreeBee, asserting that there is a 'notably different financial impact' on the affiliate program versus unaffiliated edge providers. But under that logic, no provider could ever participate in its own paid free data program—which can’t be the case. Such a regulation would only allow providers to offer third parties this benefit if the provider itself did not partake."

It comes as the FCC is on the verge of a serious shake-up, following the election win of Donald Trump, an outspoken opponent of net neutrality, and the announcement that chairman Tom Wheeler will step down from his role in January.

Wheeler has been one of the leaders of the FCC’s introduction of net neutrality rules that were strongly opposed by US telecoms operators, but announced his plans to quit the FCC earlier this month.