FCC to investigate zero-rating and data caps after consumer group pressure

Written by on June 28, 2016 in Guest Blog with 0 Comments
FreeImages.com/ Marija Gjurgjan

FreeImages.com/ Marija Gjurgjan

Tom Wheeler must feel like he’s on the top of the world as FCC to investigate zero-rating. Consumer advocates renewed a push to convince the FCC to investigate zero-rating and provide a hard look at how broadband providers can use data caps to wield control over subscribers’ Web activity.

Currently, many wireless providers, as well as some wireline service providers, offer some form of pay-per-byte pricing. Generally, people with these plans pay for a monthly allotment of data. If they exceed that amount, they either incur extra charges or are throttled to a crawl for the rest of the month.

But AT&T, Verizon and T-Mobile don’t count all data equally when deciding whether people have gone over the maximum. Instead, those companies “zero-rate” video streams offered by some companies — meaning that those streams aren’t counted toward consumers’ caps.

Each carrier has taken the freedom to offer a unique exemption from counting toward the caps:

 

Carrier Program Exemption from Data Cap
T-Mobile Binge On Video Streams offered by around 100 companies not counted towards consumer cap
AT&T Sponsored Data Data use to sponsoring organizations is not counted towards consumer cap.
Verizon Go90 Video streams offered by Verizon’s own GO90 is not counted towards consumer cap

 

Advocacy groups including Fight the Future and Free Press reportedly gave the FCC a package with 100,000 letters by consumers criticizing data caps and their exemptions. Those groups have argued for months that zero-rating services violate net neutrality principles. “They distort competition, thwart innovation, threaten free speech, and restrict consumer choice,” advocates said about zero-rating services earlier this year.

The FCC, however, isn’t convinced — at least not yet. Chairman Tom Wheeler reportedly said today at a press conference that he is still gathering information about zero-rating services. Last year, soon after Binge On launched, Wheeler said it appeared “highly innovative and highly competitive.”

T-Mobile says that consumers have streamed over 500 million hours of free videos since the launch of Binge On last year, and that 92% of customers say they intend to watch more videos, thanks to the zero-rating service.

Chairman Wheeler

FCC Chairman Wheeler said that FCC to investigate zero-rating, the term for giving consumers free data use in exchange for viewing ads or certain websites, was “ongoing.” “We’re collecting information, as I’ve been telling you for months, we’re in ongoing discovery mode to try and have an understanding of just what is the spectrum that we’re dealing with here so that we can deal with these issues on a case by case basis,” he said, on a day when protesters had delivered petitions on the issue. He also said the issue was “broad and it’s not a one-size-fits-all situation.” His comments came at the commission’s monthly open meeting.

He did not indicate whether the probe will turn into a more formal investigation or lead to punishments against providers. But his comments come after a federal court upheld strict rules the commission adopted last year to ensure net neutrality, the idea that all content on the internet should be treated in the same way.

Some speculate that zero-rating constitutes a net-neutrality violation because it can guide consumers to one service or site over another. Wheeler noted that the commission had not specifically addressed zero-rating in net neutrality rules.

To sum it up all regulators are having a hard time finding the golden path between net neutrality and zero-rating.  It’s almost like having to choose between Chocolate Ice Cream and Vanilla Ice cream – you end up wanting both…

More here and here.

This article was first published on PricingDataPlans.

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Jonathon Gordon

About the Author

About the Author: Jonathon has been lurking around the Telecoms and Internet space for the last 20 years. He is now a man on a mission – that being the reformation of the Industry Analyst business. He is working with his co-conspirators on transforming the Industry Analyst world forever as an Expert with EMI. .

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