AT&T and Verizon Facing FCC Scrutiny After Exempting Their Own Apps From Data Caps

Both AT&T and Verizon offer apps and streaming services that don't count against the data cap they impose on customers, a practice that the United States Federal Communications Commission does not approve of.

The FCC this week sent letters (via The Verge) to both Verizon and AT&T, claiming that the data cap exemptions, called "zero rating," raise net neutrality concerns and could impact consumers and competition.

attvzw
AT&T and Verizon each offer programs that allow content providers to pay a fee to be exempted from customer data caps, programs that they themselves take advantage of with their own apps and services.

DirecTV Now, AT&T's recently introduced streaming television service, does not use data when streamed on the AT&T network, for example. DirecTV Now pays for the data, but as an AT&T subsidiary, AT&T is just paying itself. Verizon, meanwhile, exempts its own Go90 streaming service from using data on the Verizon network and does not pay fees to do so.

The FCC first sent a warning to AT&T in early November, but was not pleased with the response it received from the company. In this week's letter, the FCC says that it has come to the "preliminary" conclusion that the Sponsored Data program inhibits competition, harms consumers, and violates Open Internet rules. It asks AT&T to answer a series of questions about its Sponsored Data practices.

We find that those responses fail to alleviate the serious concerns expressed in our November 9 letter regarding the potential anti-competitive impacts of a wholesale Sponsored Data program for zero-rated mobile video services. Indeed, your submission tends to confirm our initial view that the Sponsored Data program strongly favors AT&T's own video offerings while unreasonably discriminating against unaffiliated edge providers and limiting their ability to offer competing video services to AT&T's broadband subscribers on a level playing field.

A similar letter sent to Verizon expresses concern over the "FreeBee Data 360" program and says it has the potential to "hinder competition and harm consumers" because Verizon does not need to pay to participate in the Sponsored Data program when it exempts its own app, but competing content providers do.

The position that the participation of Go90 in FreeBee Data 360 is the same as that of third parties, however, fails to take account of the notably different financial impact on unaffiliated edge providers. For example, while there is no cash cost on a consolidated basis for Verizon to zero-rate its own affiliated edge service, an unaffiliated edge provider's FreeBee Data 360 payment to Verizon is a true cash cost that could be significant.

AT&T and Verizon have responded to the letters sent by the FCC in statements given to the media. AT&T says the government should not take away a service that's saving customers money, while Verizon says its practices are good for consumers, non-discriminatory, and consistent with the rules.

The two carriers have been given a December 15 deadline to respond to the FCC's concerns.

Tags: AT&T, FCC, Verizon

Popular Stories

iPhone 17 Pro Lower Logo Feature 1

iPhone 17 Pro Coming Soon With These 14 New Features

Monday June 30, 2025 1:08 pm PDT by
Apple's next-generation iPhone 17 Pro and iPhone 17 Pro Max are less than three months away, and there are plenty of rumors about the devices. Apple is expected to launch the iPhone 17, iPhone 17 Air, iPhone 17 Pro, and iPhone 17 Pro Max in September this year. Below, we recap key changes rumored for the iPhone 17 Pro models:Aluminum frame: iPhone 17 Pro models are rumored to have an...
Apple Watch Ultra Night Mode Screen

Apple Watch Ultra 3 Launching Later This Year With Two Key Upgrades

Wednesday July 2, 2025 1:13 pm PDT by
The long wait for an Apple Watch Ultra 3 appears to be nearly over, and it is rumored to feature both satellite connectivity and 5G support. Apple Watch Ultra's existing Night Mode In his latest Power On newsletter, Bloomberg's Mark Gurman said that the Apple Watch Ultra 3 is on track to launch this year with "significant" new features, including satellite connectivity, which would let you...
iPhone 17 Pro Lower Logo Magsafe

iPhone 17 Pro's New MagSafe Design Revealed in Leaked Photo

Wednesday July 2, 2025 8:37 am PDT by
The upcoming iPhone 17 Pro and iPhone 17 Pro Max are rumored to have a slightly different MagSafe magnet layout compared to existing iPhone models, and a leaked photo has offered a closer look at the supposed new design. The leaker Majin Bu today shared a photo of alleged MagSafe magnet arrays for third-party iPhone 17 Pro cases. On existing iPhone models with MagSafe, the magnets form a...
iPhone 17 Pro in Hand Feature Lowgo

iPhone 17 Pro Max Battery Capacity Leaked

Thursday July 3, 2025 5:40 am PDT by
The iPhone 17 Pro Max will feature the biggest ever battery in an iPhone, according to the Weibo leaker known as "Instant Digital." In a new post, the leaker listed the battery capacities of the iPhone 11 Pro Max through to the iPhone 16 Pro Max, and added that the iPhone 17 Pro Max will feature a battery capacity of 5,000mAh: iPhone 11 Pro Max: 3,969mAh iPhone 12 Pro Max: 3,687mAh...
Wi Fi WiFi General Feature

iOS 26 Adds a Useful New Wi-Fi Feature to Your iPhone

Wednesday July 2, 2025 6:36 am PDT by
iOS 26 and iPadOS 26 add a smaller yet useful Wi-Fi feature to iPhones and iPads. As spotted by Creative Strategies analyst Max Weinbach, sign-in details for captive Wi-Fi networks are now synced across iPhones and iPads running iOS 26 and iPadOS 26. For example, while Weinbach was staying at a Hilton hotel, his iPhone prompted him to fill in Wi-Fi details from his iPad that was already...
iOS 18

Apple Releases Second iOS 18.6 Public Beta

Tuesday July 1, 2025 10:19 am PDT by
Apple today seeded the second betas of upcoming iOS 18.6 and iPadOS 18.6 updates to public beta testers, with the betas coming just a day after Apple provided the betas to developers. Apple has also released a second beta of macOS Sequoia 15.6. Testers who have signed up for beta updates through Apple's beta site can download iOS 18.6 and iPadOS 18.6 from the Settings app on a compatible...
airpods pro 2

AirPods Pro 3 to Help Maintain Apple's Place in Earbud Market Amid Increasing Low-Cost Competition

Thursday July 3, 2025 7:25 am PDT by
Apple's position as the dominant force in the global true wireless stereo (TWS) earbud market is expected to continue through 2025, according to Counterpoint Research. The forecast outlines a 3% year-over-year increase in global TWS unit shipments for 2025, signaling a transition from rapid growth to a more mature phase for the category. While Apple is set to remain the leading brand by...
maxresdefault

New MacBook With A18 Pro Chip Spotted in Apple Code

Monday June 30, 2025 8:05 am PDT by
Apple is developing a MacBook with the A18 Pro chip, according to findings in backend code uncovered by MacRumors. Subscribe to the MacRumors YouTube channel for more videos. Earlier today, Apple analyst Ming-Chi Kuo reported that Apple is planning to launch a low-cost MacBook powered by an iPhone chip. The machine is expected to feature a 13-inch display, the A18 Pro chip, and color options...

Top Rated Comments

mrbrown Avatar
112 months ago
So, lemme get this straight... the FCC, acting as "consumer protection" in theory, is telling AT&T and Verizon that NOT charging me for services hurts me.

Oooookayyyyyy...

Thanks FCC!
Not charging for their own services but charging for competitors does hurt you, whether you realize it or not.
Score: 66 Votes (Like | Disagree)
Born Again Avatar
112 months ago
So, lemme get this straight... the FCC, acting as "consumer protection" in theory, is telling AT&T and Verizon that NOT charging me for services hurts me.

Oooookayyyyyy...

Thanks FCC!
see you fell for it. it's deceptive.
Score: 39 Votes (Like | Disagree)
Doogh2004 Avatar
112 months ago
So, lemme get this straight... the FCC, acting as "consumer protection" in theory, is telling AT&T and Verizon that NOT charging me for services hurts me.

Oooookayyyyyy...

Thanks FCC!
See, here's the issue... They're spinning it to be positive.

Imagine if you had the choice between: A) Twice as much data
B) Free data through their services

Essentially, they're forcing you to sacrifice part of your data so that others that use DirectTV can have more data.

Now, imagine if they stop raising data caps... They're essentially forcing Netflix to be more expensive to use than DirectTV.

It's dangerous and anti-competitive.

If other utilities did this... Like water or electricity... The utility companies would be able to decide which businesses succeed and fail.
[doublepost=1480715361][/doublepost]
Today it's using apps without data caps and tomorrow it's "decency" and banning porn. The FCC should have zero jurisdiction over the internet. This is one thing where I really was bummed that Obama broke that seal by encouraging the FCC to claim jurisdiction. So their first act, getting rid of something customers actually like. Lol
No, you don't understand net neutrality.

It means ATT cannot make certain services cheaper than others. What if they make their news site cheap and other news sites super expensive? It prevents ATT from controlling competition. It doesn't give the FCC to regulate the contents of the internet.
Score: 23 Votes (Like | Disagree)
oneMadRssn Avatar
112 months ago
bundling cell phone, landline, cable, etc., would be illegal.
Bundling is bad for consumers. That's a good example you gave. When Comcast forces you to buy cable tv and a landline phone, when you only want an internet connection, you end up paying more for services you never use.

The UK has had unbundling regulations, which resulted in lower costs for consumers, and their cost of internet and cell phone service are significantly lower than in the US.

Just like cable companies bundle channels together, and consumers always want a-la-carte channels, aka unbundled.
Score: 21 Votes (Like | Disagree)
doasis23 Avatar
112 months ago
So, lemme get this straight... the FCC, acting as "consumer protection" in theory, is telling AT&T and Verizon that NOT charging me for services hurts me.

Oooookayyyyyy...

Thanks FCC!
If you don't understand why this is bad for consumers here's a good article explaining why by the Verge.
http://www.theverge.com/2016/11/29/13774648/fcc-att-zero-rating-directv-net-neutrality-vs-tmobile
Score: 16 Votes (Like | Disagree)
Mascots Avatar
112 months ago
Nope. Offering me a discount on one service has no direct effect on the costs of other services.

By this same logic, bundling cell phone, landline, cable, etc., would be illegal.
That's not how any of this works.
Score: 13 Votes (Like | Disagree)