FCC Says ATT and Verizon 'Harm Consumers'

The US Federal Communications Commission is making it clear that the country's two primary mobile providers are giving customers a bad deal on increasingly important sponsored data plans. What is not clear is whether the incoming administration will support that point of view - or what alternative consumers' have. JL

Colin Lecher reports in The Verge:

The FCC writes that sponsored data plans from the telecom giants are a threat to net neutrality. “We have reached the preliminary conclusion that these practices inhibit competition, harm consumers, and interfere with the ‘virtuous cycle’ needed to assure the continuing benefits of the Open Internet.”

In two letters sent to AT&T and Verizon yesterday, the FCC writes that sponsored data plans from the telecom giants are a threat to net neutrality.

FCC writes that the programs harm competition

Both companies have recently instituted similar plans. Under the programs, customers can use select services without having them contribute to a data cap — a practice known as zero rating. In AT&T’s case, the FCC writes that, despite protests from the company, its sponsored data program “strongly favors AT&T's own video offerings” while damaging the opportunity for other video services to compete.

“We have therefore reached the preliminary conclusion that these practices inhibit competition, harm consumers, and interfere with the ‘virtuous cycle’ needed to assure the continuing benefits of the Open Internet,” FCC wireless bureau chief Jon Wilkins writes in the letter, which requests a response from the company by December 15th.

“These are incredibly popular free services available to millions of customers,” AT&T said in a statement. “Once again, we will provide the FCC with additional information on why the government should not take away a service that saves consumers money.”

The Verizon letter similarly questions the company’s "FreeBee Data 360" program, which, the FCC writes, has largely benefited Go90 — an affiliated mobile video service from Verizon.

"We will review and respond to the inquiry as requested,” a Verizon spokesperson said in a statement. “In the meantime, we remain quite confident that our practices are good for consumers, non-discriminatory and are consistent with current rules."

The agency says Verizon’s program has largely benefited Go90

Net neutrality advocates have long been wary of zero-rating plans, which may set a dangerous precedent for how data is managed, with carriers favoring some services over others. But last year, when the agency voted to reclassify the internet, it said allowing zero rating would not necessarily harm competition. The agency left the door open, however, to intervene in cases where it does. The letters suggest the FCC is still willing to fight those battles, although with a new administration on the horizon, the agency’s time to fight with its current staff is waning.