Here's Verizon's Shiny New Assault On Net Neutrality

from the not-with-a-bang-but-with-a-whimper dept

Verizon has joined the chorus of companies testing the FCC's willingness to enforce its own net neutrality rules. The telco just unveiled something it's calling FreeBee sponsored data, which effectively lets content companies pay to have their content exempt from wireless user usage caps. Much like AT&T's controversial sponsored data service, the service makes a mockery of net neutrality in that it lets companies pay to give their content a leg up in the marketplace, putting other competitors at a distinct disadvantage.

According to a Verizon press release, companies can either pay Verizon to have their entire app or website exempted from usage caps (paying Verizon for each byte consumed), or pay Verizon a lump sum to have specific content exempted from usage caps (a video, a single audio file, or an app download). This is, according to Verizon, a wonderful way to add "value and utility" to the overall consumer experience:
"With 1 in 3 Americans now watching videos on their smartphone, and another 100 million on tablets, the business case for mobile is clear," said Colson Hillier, vice president, Consumer Products at Verizon. "In today's digital economy, FreeBee Data is a departure from the one size fits all approach to marketing. The opportunity to add value and utility to consumers' everyday experiences will fundamentally transform how brands and businesses connect with their customers."
Right, well, no.

While these zero rating efforts are pitched to oblivious consumers as akin to "free shipping" or "1-800 numbers for data," they've been rightly lambasted by critics as a mammoth distortion of the traditionally-level Internet playing field. Whereas deep-pocketed companies can gain marketing advantage by throwing money at Verizon for cap-exempt status, smaller competitors, startups and non-profits won't enjoy the same luxury. Not only does sponsored data give wealthier, bigger companies an unfair advantage, it gives companies like Verizon (with a generation of documented anti-competitive behavior under its belt) far too much power.

Unlike numerous other countries (Norway, Chile, Netherlands, Japan, Slovenia), the FCC chose to specifically avoid banning zero rating, instead stating it would act on a "case by case basis" to determine what's anti-competitive, and what's just creative marketing and pricing. That has opened the door to companies being allowed to brutally violate net neutrality, provided they're just marginally clever about it.

Comcast, for example, is now exempting its own streaming service from its usage caps, claiming that it doesn't violate net neutrality because it's "delivered over Comcast's managed IP infrastructure" and not the actual Internet. T-Mobile's now throttling every video service that touches its network by default (and lying about it), but claims this is ok because users can opt out. AT&T and Verizon, meanwhile, are simply letting giant companies pay if they want to gain an utterly unfair competitive advantage over smaller, more shallow-pocketed competitors.

And so far the FCC's response to these practices has ranged from praising them to weak-kneed promises that the agency is conducting notably informal inquiries. And while it's entirely possible the FCC wants to see if its neutrality rules withstand ISP lawsuits before leaning on them too heavily, it's also entirely possible the regulator is simply too timid to actually enforce the rules the public demanded it pass.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Anonymous Coward, 20 Jan 2016 @ 8:42am

    Now that NBC and CBS have launched their own streaming apps it will be interesting to see their response to this plan.

    It will also be a really big test and hurdle for NBC to overcome. On one side giving it's apps exemptions while charging others for streaming via Comcast.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jan 2016 @ 8:42am

    Now that NBC and CBS have launched their own streaming apps it will be interesting to see their response to this plan.

    It will also be a really big test and hurdle for NBC to overcome. On one side giving it's apps exemptions while charging others for streaming via Comcast.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jan 2016 @ 8:45am

    Kind of renders the whole reasoning behind caps moot when there are ways to bypass the caps, doesn't it?
    What's the difference between a user downloading 20GB of movies on Unlimited Data and a user downloading 20GB of cap-exempt movies on Capped Data?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Jan 2016 @ 9:18am

      Re:

      I call it, "theft by data cap."

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Jan 2016 @ 9:56am

      Re:

      For the service provider, the cap on data is a way to limit the use (albeit rightfully called out as too crude). Lesser use of data at peak time is the shaping factor for the cost of data on the net.

      For the content provider, the cap on data is a frustrating limit for their ability to provide services and thereby earn money. For them it may be valuable to pay the ISP for the extra usage, to increase the traffic on their site!

      For the user, caps on data are universally bad. This type of business alleviate a little bit of the data cap frustrations.

      So all is fine and dandy in theory, when it comes to the caps.

      The problem here is the market distortion effecs:
      As soon as you tier your services like that you have not only created a market for content providers to pay for a new product at the ISP, but a new product-differantiation parameter for the customers to take stock of. It is an extra brick in the wall for the lack of consumers understanding. A clear violation of net neutrality and a new revenue stream for ISPs. It is competitively distorting the market for content providers and reducing the economic sense for ISPs to improve the pay per view tier for customers. In spirit this is exactly the same crap as Suckerberg is pushing.

      reply to this | link to this | view in chronology ]

  • icon
    limbodog (profile), 20 Jan 2016 @ 9:12am

    the latter

    >it's also entirely possible the regulator's simply too timid to actually enforce the rules the public demanded it pass.

    If they did that, then who would give them their cushy lobbying job once they left the FCC?

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 20 Jan 2016 @ 9:32am

    So Americans can opt among others in the mobile space:

    - Be outright throttled depending on the content being transferred;
    - Be locked in if it's content NOT from the same company that provides the connection;
    - Be locked in an universe where only big players reign and smaller ones get shafted (innovative but small services be damned).

    Am I missing something?

    It's amusing how they complained that regulation would destroy the net and yet it's precisely the lack of it that's spawning a total mess.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Jan 2016 @ 9:42am

      Re:

      regulation caused this problem to begin with. This is how government works... through regulation they create problems for the agencies and politicians to campaign against.

      regulation/deregulation is neither good nor bad. Both can be bad or good and unfortunately the government only seems to implement the bad parts of both while people like you only blame one as bad and one as good despite clear evidence to the contrary.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Jan 2016 @ 10:02am

        Re: Re:

        "regulation caused this problem to begin with"

        Yes, because industry is self regulating

        lol - this is funny stuff here

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 Jan 2016 @ 12:37pm

          Re: Re: Re:

          Seriously, you are such a tool, I never said anything was self regulating.

          Business will only do what benefits them the most.
          In a free market the competition tends to cause regulation in the form of wanting to attract customers from others. This works until an unholy alliance comes in and starts carving up everyone's little area's of operation. Just as what the FCC did which is exactly what is was SUPPOSED to prevent.

          Regulation is fine and good, so long as that regulation focuses on preventing, lies and deceit from businesses. Preventing the formation of monopolies and removing all obstacles to business operations.

          So far regulation from the FCC has CREATE monopolies all over the place, consolidated power into the few large and looming enterprises that everyone just has a revolving door they walk between the two!

          I AM DIRECTLY SAYING THAT THE FCC HAS CAUSED THE PROBLEMS THAT ALL OF THE REGULATION LOVERS WANTED THEM TO AVOID!!!

          You guys are easily fooled. These 3 letter agencies whisper sweet nothings in your ear and you smile as you slowly lose consciousness from the blood loss as the agency's dagger is twisted in your back.

          reply to this | link to this | view in chronology ]

          • icon
            Ninja (profile), 21 Jan 2016 @ 2:45am

            Re: Re: Re: Re:

            These monopolies will rise naturally. Regulation to a certain point is needed or companies will be happy to employ slaves to save money. They already do it even if it's forbidden. So in this case the LACK of regulation is allowing them to do as they please. Or rather, lack of enforcement.

            reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Jan 2016 @ 10:03am

        Re: Re:

        ...regulation/deregulation is neither good nor bad...

        Good regulations puts everybody on an equal footing.

        Bad regulations stifles endeavor.

        No regulations can be either good or bad.

        As the AC points out it appears the government favors bad regulations, or even no regulations to the detriment of the public.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 20 Jan 2016 @ 10:43am

          Re: Re: Re:

          That is a very narrow view on regulation.

          That the devil is in the detail is also my philosophy, but no regulation is rarely the best starting point. Bad legislation is easier to correct than no regulation plus you have made an experience about how not to regulate!

          As for government having malicious intent, I see it more as a sign of the kind of fact-less grandstanding debates happening when politics is "us versus them" and when rational decission-making is a distant third behind economic interests and ideological purity.

          The ungoverned people in politics are governed by the interest to get elected and when the rational moderates fall in primaries and the ideologically pure fall in the elections, you end up with the economically tied up people. That is the only rational outcome in this type of political system.

          reply to this | link to this | view in chronology ]

          • icon
            tqk (profile), 21 Jan 2016 @ 6:58pm

            Re: Re: Re: Re:

            ... but no regulation is rarely the best starting point. Bad legislation is easier to correct than no regulation plus you have made an experience about how not to regulate!

            So, your starting assumption is that a free market doesn't work. I assume the opposite. The more free the market, the better it works. Once you introduce compulsion upon the actors to act in specific ways for reasons of policy, the market mechanisms work less efficiently. You don't get what you want because that's illegal or artificially (taxation) more expensive than it should be. I also don't get what I want either for the same reasons.

            Who is this government or regulator who thinks it knows better what we want? What are its motivations or prejudices? Are they doing good for all or just muscling in to get a cut of our action? Why should that be tolerated when we are happy to deal freely between each other?

            Government is just another gang, the biggest on the block, offering protection for a cut of our action. I think I, with the help of my friends who think likewise, don't need their protective services. I don't even approve of what they think I need to be protected from. I really disapprove of how they do all of that.

            Welcome to the protection racket.

            reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 20 Jan 2016 @ 10:21am

        Re: Re:

        Economic regulation in its purest form is a market correction mechanism to provide the need for companies to consider other things than money.
        If money was the only goal, things like human lives and the environment would be irrational and an economic disadvantage to consider in many cases.

        I would argue that Ninja is the one standing on the neither good nor bad side of this argument, compared to the way you formulate.
        What is the clear evidence against regulation here? Be aware that contrafactism is very closely related to conspiracy theories and doesn't provide emissible evidence.

        reply to this | link to this | view in chronology ]

        • icon
          tqk (profile), 21 Jan 2016 @ 7:32pm

          Re: Re: Re:

          Economic regulation in its purest form is a market correction mechanism to provide the need for companies to consider other things than money.

          Weasel words.
          What is the clear evidence against regulation here?

          What is the clear evidence in favor of regulation? You appear to be assuming the market is inherently unfair. Why? I assume the market is skewed by outsiders when they muscle in between us who're doing what we each want to do.

          I want this, and am willing to pay so much. You're selling what I want to buy and will sell for $blah. Why would we want anyone or anything sticking its nose into our private affair? What does either of us have to gain from that?

          Shouldn't we be suspicious of those who do want to muscle into our private affair?

          reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 20 Jan 2016 @ 10:17am

      Re:

      It's amusing how they complained that regulation would destroy the net and yet it's precisely the lack of it that's spawning a total mess.

      Yes and no.

      Had the FCC took a hard 'no zero-rating' stance as other countries have done, then while companies probably wouldn't have been quite as blatant as they have been you can be sure that they'd still have tried something similar, and given how the FCC is acting now, you'd have basically the same result.

      With what we got, if the FCC were simply to develop enough spine to crack down on companies involved in blatant anti-competitive behavior that would likely be enough, making even the current 'case by case basis' rules sufficient to 'dissuade' companies from acting as such in the future, at least until their greed overcame the memory of the fine and they needed to be slapped down again.

      How effective a rule or law is largely depends on the enforcement of it and how that enforcement is perceived. If people and/or companies don't think you'll actually do anything should they bend if not outright break it, then they will do exactly that, no matter how 'strict' the law is. On the other hand if people and/or companies fully expect you to come down on them like a hammer if you bend or break the law, then even a much lighter law will generally be enough.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jan 2016 @ 9:41am

    Tom Wheeler may not be a dingo, but he seems fine with watching dingoes eat his baby.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 20 Jan 2016 @ 9:45am

      Re:

      well, once the chow is over and they all disappear behind the building where a few dingos will barf up some left overs for Wheeler to munch on for himself.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jan 2016 @ 9:47am

    is there actually anyone in the USA who has sufficient balls to tell it like it is over the piss poor broadband that is backed up by equally piss poor members of Congress, who are interested in nothing other than lining their own bank accounts!!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jan 2016 @ 10:03am

    And this my friends is why you do not have a data plan.

    What's that? The data plan is mandatory in the contract?
    Well then, you can keep your stupid cell phone.

    reply to this | link to this | view in chronology ]

  • icon
    fgoodwin (profile), 20 Jan 2016 @ 10:29am

    If Bode says it, it must be so

    Have the courage of your convictions and file a formal complaint with the FCC if you think Verizon is violating the FCC's net neutrality rules.

    While this blog post serves to inform, it does nothing to change anything.

    reply to this | link to this | view in chronology ]

  • identicon
    Eros, 20 Jan 2016 @ 1:00pm

    Honest question

    doesn't zero rating promote the fast lanes that are explicitly prohibited under the net neutrality rules? If so then we need to tell the FCC to get off their sorry butts and enforce the rules.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 20 Jan 2016 @ 1:55pm

    So silly

    The regulations that the government should have implemented:

    1. Reasonable rates for data (mobile) and no data caps for wired service
    2. An ISP can't be a content provider
    3. Removal of artificial scarcity
    4. (I hate that I even have to type this one) fixed ISP pricing where there is no competition.... I know this leads to many other problems which is why I hate it.

    If we had these in place either via a free market or {shudder} regulation, there would be no need for net neutrality. Instead we have a the 'net neutrality' regulations which we see are doing nothing more than spawning more problems. (mainly because the are not being enforced)

    reply to this | link to this | view in chronology ]

  • icon
    blogagog (profile), 20 Jan 2016 @ 6:19pm

    Techdirt must accept partial blame here.

    This is a perfect example of why those of us who were against government-controlled net neutrality were against the idea. And it also what the net neutrality cheerleaders at techdirt said would never happen if the laws were passed.

    Guess what? It's happening a lot.

    reply to this | link to this | view in chronology ]

    • identicon
      Wendy Cockcroft, 21 Jan 2016 @ 7:38am

      Re: Techdirt must accept partial blame here.

      No one at TD said the new rules were perfect. Indeed, they pointed out that there was scope for abuse. Lo and behold, it seems Karl is right.

      You can't "control" net neutrality, you can only enforce it by levying fines, etc., for breaking the rules. But first they have to be in place.

      There is no true net neutrality in the USA. I'm reminded of tqk's comments RE: predators preying on the weak and vulnerable earlier: that's what many of the big L's seem to think of as the market at work. It's not. It's cheating.

      reply to this | link to this | view in chronology ]

  • icon
    tqk (profile), 21 Jan 2016 @ 2:44pm

    Caps, on "unlimited data?" Throttling vs. optimizing? Your "business partners" vs. my wishes?

    "With 1 in 3 Americans now watching videos on their smartphone, and another 100 million on tablets, the business case for mobile is clear," ...

    Yes it is. I will happily continue to do without. They may prattle on all they want about the landscape having changed and this is now how it's done. It's not how I want it done, so every day they insist on foisting on us this Frankenstein Monster way of doing things, I'll continue to withhold my hard earned cash from them. If it was offered as I often hear Europeans can get it, I'd likely reconsider, but it isn't so no.

    I pay my ISP for net connectivity and can easily do without a cellphone. It's just an easily foregone luxury item. They don't get to own me. I decide who my precious dollars enrich and how much, not them.

    All they're doing is slowly but surely pricing themselves out of business. It'll happen eventually no matter what their micromanaging MBAs may try next. I for one won't miss them.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Show Now: Takedown
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.