Broadband

by Karl Bode


Filed Under:
fcc, net neutrality, tom wheeler, zero rating

Companies:
at&t, verizon



AT&T, Verizon Laugh At The FCC's Last-Minute Attempt To Crack Down On Zero Rating

from the way-too-little,-way-too-late dept

So we've noted several times how the FCC's decision to avoid banning zero rating when crafting net neutrality rules was a bad idea, as it opened the door wide to all manner of net neutrality violations -- provided incumbent ISPs were just creative about it. And like clockwork, companies like AT&T, Verizon and Comcast quickly got to work exempting their own content from usage caps, while penalizing competitors (and non-profits or educational services). Meanwhile companies like Sprint and T-Mobile began charging users a steep premium unless they wanted games, video and music throttled by default.

Unlike many other countries (Japan, The Netherlands, Norway, India), the FCC decided to avoid banning these kinds of practices as part of neutrality rules, instead saying they'd step in and act on a "cases by case" basis should ISP behaviors prove anti-competitive. But as ISPs increasingly made it very clear they were using arbitrary usage caps as anti-competitive weapons against competing streaming video services, the FCC did nothing. That is, until the agency reached out to AT&T and Verizon last month, formally accusing both companies of violating net neutrality.

It's a strange, belated decision by an FCC that, by most analyst accounts, is about to be defunded and defanged. Both the GOP and incoming Trump administration have clear they see no role for the agency as a consumer or competition watchdog. With FCC boss Tom Wheeler having just stepped down, both AT&T and Verizon are well aware the current FCC is a lame duck. As such both companies responded to the FCC's inquiries this week with the legal equivalent of laughter.

As it stands, AT&T now zero rates its DirecTV Now streaming service so it doesn't count against AT&T user wireless caps. Verizon does the same thing with its Go90 streaming video service. In both instances, their wireless customers are giving every incentive to avoid using competing services. But as you might imagine, neither company is willing admit that they're using their control over the conduit to give their content an unfair market advantage. And both were quick to proclaim that if companies don't like it, they can be put on the same equal market footing if they're willing to pay AT&T and Verizon a premium:
"Other video providers can be expected to respond to [AT&T’s Data Free TV] either by sponsoring their own content with AT&T and/or other wireless providers or by finding different ways to improve and differentiate their offerings and generate consumer value,” (wrote AT&T executive Joan Marsh)."
And both AT&T and Verizon equally made it clear that they realize the emperor has no clothes, and will not be able to enforce this almost comically-belated attempt to actually protect net neutrality:
"Any doubts on that score were put to rest when two FCC Commissioners, both of whom will remain in office after the imminent change of administration, criticized this investigation and warned the Bureau against unlawfully usurping core policymaking powers that only the Commission may exercise," AT&T wrote. "Those Commissioners also observed that whatever judgment the Bureau purports to pass on this program before January 20 will very likely be reversed shortly thereafter."
So while it's nice that the FCC finally realized that usage caps and zero rating can be used as anti-competitive weapons, this all comes too little, too late for broadband consumers, startups, and other competitors that rely on a healthy, open internet. The ultimate irony being of course that if net neutrality is to be demolished (which will likely come in the form of a new bill professing to do the exact opposite), these concerns over zero rating will be the very least of net neutrality's problems in the new year.

Reader Comments

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  • icon
    Jeremy Lyman (profile), 19 Dec 2016 @ 5:54am

    Spectrum Competition

    If other video providers don't like it, they're all free to build national wireless data distribution networks and unfairly leverage them as they see fit.

    Oh, wait. No. No, they're not allowed to do that at all.

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

    • identicon
      TTr, 19 Dec 2016 @ 7:36am

      Competition Freedom

      FCC Kommissars have neither the skills, knowledge, motivation, nor integrity to regulate/control anything... much less a highly complex national internet/cable/wireless system.

      How does America survive without Potomac bureaucrats directing our retail & wholesale food system ?? There would be chaos, price gouging,food shortages, and supermarket monopolies across the nation.

      Socialist central planning & regulation is always the best economic choice for consumer services & products. Open markets, free competition, voluntary buyer/seller choices & contracts must be restricted by wise and noble government bureaucrats (??)

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

      • identicon
        Anonymous Coward, 19 Dec 2016 @ 8:59am

        Re: Competition Freedom

        How does America survive without Potomac bureaucrats directing our retail & wholesale food system ??

        There many laws regarding food. One federal agency, the Food and Drug Administration, even has "Food" in its name.

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

        • identicon
          Anonymous Coward, 19 Dec 2016 @ 9:30am

          Re: Re: Competition Freedom

          you missed the point...

          They are not written in a way that grants a lot of monopolies like the way the FCC does it.

          Even so, I recognize the the FDA has done a shit job of it as well. They are easily corrupted just like the FCC.

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

      • identicon
        Anonymous Coward, 19 Dec 2016 @ 11:26am

        Re: Competition Freedom

        "FCC Kommissars have neither the skills, knowledge, motivation, nor integrity to regulate/control anything"

        And that looks like it will remain unchanged over the next four years.

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

  • identicon
    Anonymous Coward, 19 Dec 2016 @ 6:30am

    and this is all the fault of the politicians who aremore concerned with filling their own bank accounts than doing what they were elected for! then add in how in order to keep those same bank balances thriving, they prevent everyone else from doing the things they should be doing and we have the situation we have, with companies doing whatever they want to aid themselves while doing everything they want to screw the customers and the country! the only way to stop this is to oust the politicians who not only started this, but kept it going, simply for self-interest, then get in place those who will do their damn job!!

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

    • identicon
      Anonymous Coward, 19 Dec 2016 @ 9:33am

      Re:

      "and this is all the fault of the politicians who aremore concerned with filling their own bank accounts than doing what they were elected for!"

      But not the voting citizens whom sit idle while watching them lie, cheat, and steal everything using the system?

      If you select a thief to safeguard your property... some might say that you are more to blame than the thief for that loss...

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

  • identicon
    Anonymous Coward, 19 Dec 2016 @ 6:34am

    This was a smart move by AT&T and Verizon to laugh now at the FCC since it probably won't exist in 2017.

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

  • icon
    Ninja (profile), 19 Dec 2016 @ 6:51am

    I'm all for the chaos. Welcome to last century broadband US! We need some chaos here too so let them do as they please, let them gut rights and protections. Put everything to the ground. Then when the inevitable chaos and economic lockdown come the least stupid among us will at the very least be able to laugh on the shocked faces of everybody else.

    Ahem. /rant

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

    • icon
      Frozen Njal (profile), 19 Dec 2016 @ 7:18am

      Re:

      It's fun popcorn time when you aren't a US resident and can just laugh.

      Makes up for all the idiotic IP laws they keep exporting/enforcing world-wide ;)

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

      • identicon
        Anonymous Coward, 19 Dec 2016 @ 7:39am

        Re: Re:

        It's fun popcorn time when you aren't a US resident and can just laugh.

        I doubt that, as the usual choice for a country that can foresee internal troubles is to pick an external war to unify the population. May you line in interesting times is a curse for good reasons, such times are usually terrifying to live through, and only interesting with the hindsight of history with which to to evaluate them.

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

      • icon
        Ninja (profile), 19 Dec 2016 @ 9:25am

        Re: Re:

        " We need some chaos here too "

        My words. In a sense, the US is bracing for something we already are deep into (generally speaking). Don't misunderstand me, we are gonna laugh even though we are utterly screwed too because we could see it coming so we won't be shocked.

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

  • icon
    Dave Cortright (profile), 19 Dec 2016 @ 8:06am

    DirecTV app as a proxy/relay

    Some clever subversive programmer just needs to figure out how to trick the zero-rated apps as a proxy/relay for all other internet traffic. Sweet justice. Nerd harder!

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

  • icon
    NeghVar (profile), 19 Dec 2016 @ 9:38am

    Could the FTC step in to claim anti-competitive business practices?

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

    • identicon
      Anonymous Coward, 19 Dec 2016 @ 10:28am

      Re:

      > Could the FTC step in to claim anti-competitive business practices?

      Not much, because Congress has granted this industry exemptions from some of the laws the FTC uses. Blame Congress.

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

      • identicon
        Anonymous Coward, 19 Dec 2016 @ 2:48pm

        Re: Re:

        Exemptions were granted in exchange for regulation. Then the usual pattern occurred:
        1. Accept regulation to get exemptions.
        2. Lobby to get rid of the regulations.
        3. Keep the exemptions.
        4. Profit!

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

  • identicon
    Bilateralrope, 19 Dec 2016 @ 9:41am

    One ammusing thing I see with zero-rating is comparing how it's going in the US to how it happened here in New Zealand (a country where the government has forced competition upon ISPs). 5-10 years ago, we had a few ISPs advertising that if you went with their plans then there would be a few websites that didn't count against your monthly limit.

    Those options vanished as more ISPs started offering unlimited plans.

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


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