FCC Sees Potential Harm in Zero-Rated Data Offers by the Carriers

Posted by at 3:04 pm on January 11, 2017

The FCC today chided AT&T and Verizon  for their zero-rated video services and said they may in fact be harmful to the market.

The agency has spent time evaluating each of the zero-rated offerings from AT&T, T-Mobile, and Verizon Wireless. While the agency has no quibble with zero-rated services, per se, AT&T and Verizon’s offerings may cross a certain line with respect to competition.

“We … have found that two of the plans present significant risks to consumers and competition in downstream industry sectors because of network operators’ potentially unreasonable discrimination in favor of their own affiliates,” said the agency in today’s report.

The FCC judged the offerings based on whether or not they amount to blocking, throttling, or paid prioritization, and if they don’t violate those tenets, whether or not the services violate the general conduct rule with respect to data caps, transparency, and user choice.

T-Mobile’s BingeOn service, for example, is in the clear because it is open to all customers and all third-party services. AT&T’s Data Perks program is okay, too, but its Sponsored Data program crosses the line because it likely violates the general conduct rule. The same is true of Verizon’s go90 offering.

“We are aware of no safeguards that would prevent [Verizon or AT&T] from offering substantially more costly or restrictive terms to enable unaffiliated edge providers to offer services comparable to [go90 and Sponsored Data] on a zero-rated basis,” noted the agency.

The FCC believes companies such as AT&T and Verizon that own both the content and the delivery mechanism may cause real harm to consumers and competition. The FCC didn’t say what, if any, actions it might take next.

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