The Telecommunications Law Resource Center is the most comprehensive reference and news platform for communications law, covering broadcasting, cable, broadband, telephony and wireless;...
By Lydia Beyoud
Dec. 17 — The FCC is taking a closer look at so-called zero-rating plans offered by AT&T Inc., Comcast Corp. and T-Mobile US Inc. that allow customers to stream data-hungry video applications and other content without counting it toward their monthly data usage.
“This is not an investigation, this is not an enforcement,” Federal Communications Commission Chairman Tom Wheeler said at a Dec. 17 press conference of letters sent to the three companies the previous day.
AT&T’s Sponsored Data and Data Perks programs, T-Mobile’s Binge On video offering and Comcast’s Stream TV services are the focus of the letters of inquiry. The companies were asked to meet with relevant technical and business personnel by Jan. 15.
The request for the businesses to speak with FCC officials about their offers is intended to help the commission stay informed of what thee practices actually are, “as we said we would do in the Open Internet order,” Wheeler said. The broadband providers have also been asked to comment on how the industry is developing as a whole, Wheeler indicated.
The FCC declined to regulate zero-rating offerings as part of its net neutrality proceeding, but Wheeler said in November the FCC would keep an eye on them. The chairman subsequently asked the Wireline Competition Bureau and the Wireless Telecommunications Bureau to collaborate on an informal review of the new offerings to keep the FCC informed about marketplace developments, an FCC spokeswoman said on background.
“We want to ensure that we have all the facts to understand how these services relate to the Commission's goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources,” each letter said.
The letters noted various concerns raised with each of the offerings as potentially circumventing the FCC's prohibitions on paid prioritization, but Comcast's data use exemption is generally viewed as the more problematic of the three by public interest groups and video competitors.
Comcast has repeatedly said its service is not a zero-rated one, as it doesn't run across the public Internet and is only available to its customers at home. Data usage for Stream TV is exempt from Comcast XFINITY monthly data usage that otherwise applies to streaming video.
A Comcast spokeswoman said via e-mail the company looked forward to participating in the FCC's fact-gathering related to industry processes.
Other broadband providers will also be invited to meet with the commission, including commercial and public interest groups, the FCC spokeswoman said. Although Verizon Communications Inc. has previously expressed its own interest in sponsored data offerings, it did not receive such a letter. One could follow once the company officially rolls out the new service.
The commission may have reason to have more concerns with Comcast, said Harold Feld, senior vice president of Public Knowledge, a public interest advocacy group.
“There are a number of competitive concerns that are at play here, not simply net neutrality concerns, but straight-up traditional video competition concerns” that were the subject of the merger conditions between Comcast and NBC Universal, Feld said. These concerns are whether Comcast would leverage the combination of its position as the nation's primary wireline broadband provider with enhanced power in the programming world in order to disadvantage competitors, he said.
However, an Internet protocol (IP)-based television offering such as that described by Comcast doesn't necessarily implicate the same concerns that typical zero rating does, said Doug Brake, a telecom policy analyst with the Information Technology and Innovation Foundation in Washington.
The FCC has more reason to be concerned about anticompetitive behavior related to pure over-the-top video streaming, he said. “The real issue that is driving so much of this, that no one wants to talk about, is if we do see real cord cutters and a real transition away from cable video to over-the-top, we have to find a way to make the pricing work so we can support the broadband” infrastructure, he said.
“I think everyone recognizes these sponsored data programs can be good or bad, depending on how they're designed,” he said.
Feld called the letters a “calculated signal” by the FCC to encourage Internet service providers to innovate around data caps and zero-rated offerings, while at the same time warning that ISPs won't have free reign to turn them into loopholes in the Open Internet rules.
After the discussions, the FCC will be better positioned to provide guidance on zero rating that they weren't able to include in the Open Internet order about when data cap programs, sponsored data or zero rating offers cross the line into practices that are anticompetitive or anticonsumer, Feld said.
Additional clarity could come in the form of a policy statement from Wheeler stating that generally zero rating and similar practices are positive and desirable for a competitive marketplace, Brake said. “Hopefully this is not one of those cases” where the FCC creates gray areas for the Enforcement Bureau to step in and act, he added.
To contact the reporter on this story: Lydia Beyoud in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Keith Perine in Washington at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)