Tier-1 U.S. wireless carriers Verizon and AT&T stood their ground on zero rating in their responses to an FCC inquiry, defending the practice as both net neutrality compliant and a boon for customers.
After questioning AT&T about its plan to zero rate data for AT&T customers using its DirecTV Now video service back in November, the Commission earlier this month followed up with a renewed inquiry involving both AT&T and Verizon into the merits of the practice. In letters sent to the carriers, the FCC’s Wireless Telecommunications Bureau aired fresh concerns that the carriers’ zero rating policies could “hinder competition and harm consumers.”
But the carriers are having none of it.
In a sternly worded response to the Wireless Telecommunications Bureau, AT&T Senior Vice President of Federal Regulatory Joan Marsh said the carrier takes “sharp issue” with the Bureau’s conclusions about zero rating and argued the Bureau has “articulated no plausible basis for challenging Data Free TV as ‘anticompetitive.’” AT&T further argued its DirecTV Now offering has already sparked responses from other industry players, including T-Mobile, which last week launched a promotion offering a year of DirecTV Now for free to customers who switch networks.
Rather than zero rating doing harm to consumers, AT&T conversely said it would be the removal of such services that would be a detriment to consumers.
“The Bureau’s approach thus would deny consumers a service they value, raise prices, lower consumption, and curb the disruptive potential of Data Free TV, all in the name of preserving profit margins for individual DirecTV rivals,” Marsh wrote in her Dec. 15 response. “That approach would upend the most basic principles of American competition policy, which is designed for ‘the protection of competition, not competitors.’ And it also would scrap decades of regulatory precedent making clear that even a monopolist may provide downstream services to an affiliate as long as those services are available to others on the same terms.”
Marsh continued her tongue lashing of the Bureau, noting any “final conclusions” it may draw against Data Free TV would be “unenforceable” because the “Bureau’s proposal would represent such a radical departure from settled law.” According to Marsh, this position was backed up by FCC Commissioners Ajit Pai and Michael O’Rielly – both of whom are expected to remain on the Commission under the Trump administration – when they openly criticized the Bureau’s investigation and warned against “unlawfully usurping core policymaking powers that only the Commission may exercise.”
Verizon similarly defended its zero rating policy to the Bureau as one that benefits consumers and complies with the Commission’s net neutrality rules. The carrier also leveraged the argument that the Bureau shouldn’t overreach itself, especially in light of the pending administration change.
“Our FreeBee data product and other services like it allow consumers to access sports, entertainment, news and other content on their mobile devices without incurring data charges. At the same time, providers have a new way to connect with users. The FCC should not – particularly just as the administration is changing – try to contort its Open Internet rules to deny consumers the benefits of these consumer friendly and beneficial services,” spokesman Rich Young said in a statement.
Filed Under: Industry regulations