Outgoing FCC team tries to uphold net neutrality, stop zero rating

Written by on December 7, 2016 in Guest Blog with 0 Comments

siegeFCC says zero-rated video plans are violating net neutrality. Is the a disturbance in the force or the death throws a crumbling empire? Well the looming change in administration has not slowed down the FCC one iota. They are still out there doing their thing. The FCC is downright unhappy at Verizon and A&T and claims their zero-rated video schemes are violating net neutrality.

In two letters sent to AT&T and Verizon on Thursday, the FCC writes that sponsored data plans from the telecom giants are a threat to net neutrality.

Both companies have recently instituted similar plans. Under the programs, customers can use select services without having them contribute to a data cap — a practice known as zero rating. In AT&T’s case, the FCC writes that, despite protests from the company, its sponsored data program “strongly favors AT&T’s own video offerings” while damaging the opportunity for other video services to compete.

“We have therefore reached the preliminary conclusion that these practices inhibit competition, harm consumers, and interfere with the ‘virtuous cycle’ needed to assure the continuing benefits of the Open Internet,” FCC wireless bureau chief Jon Wilkins writes in the letter, which requests a response from the company by December 15th.

“These are incredibly popular free services available to millions of customers,” AT&T said in a statement. “Once again, we will provide the FCC with additional information on why the government should not take away a service that saves consumers money.”

The FCC said it has “reached the preliminary conclusion that [AT&T’s] practices inhibit competition, harm consumers, and interfere with the ‘virtuous cycle’ needed to assure the continuing benefits of the Open Internet.” Commission staff are concerned about the prices AT&T charges companies for data cap exemptions. The FCC apparently doesn’t have exact numbers from AT&T, but it made a conservative estimate based on AT&T’s statement that its Sponsored Data rates are similar to the discounted wholesale rates paid by major wireless resellers.

“We estimate for purposes of illustrating our concerns that an unaffiliated mobile video service provider would have to pay AT&T $16 a month to offer zero-rated service to a customer who uses just 10 minutes of LTE video per day, increasing to $47 for a customer using 30 minutes per day,” the FCC wrote. “These costs alone would represent 46 percent to 134 percent of DirecTV Now’s $35 retail price, against which third parties will be competing for AT&T Mobility customers, and would be borne in addition to all other costs of providing service by the unaffiliated provider.”

When all is said and done, though, the entire concept of violating net neutrality may be moot the day after Trump takes office on Jan 20th

More on The Verge and arstechnica.

This article was first published on PricingDataPlans.

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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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