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: FCC, AT&T, Verizon

Top Rated Comments

mrbrown Avatar
59 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)
ILuvEggplant Avatar
59 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
59 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
59 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
59 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
59 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)

Top Stories

apple watch 6s 202009

Bloomberg: Apple Watch Series 7 to Feature Thinner Screen Bezels, Faster Processor, and Updated Ultra Wideband Tech

Monday June 14, 2021 3:41 am PDT by
This year's Apple Watch Series 7 is likely to have thinner display bezels and use a new lamination technique that brings the display closer to the front cover, according to Bloomberg's Mark Gurman. From the report: The Cupertino, California-based tech giant is planning to refresh the line this year -- with a model likely dubbed the Apple Watch Series 7 -- by adding a faster processor,...
m1 imac back

Some M1 iMac Models Shipping With Crooked Mountings

Monday June 14, 2021 12:50 pm PDT by
Some M1 iMacs appear to have a manufacturing defect that causes the display to be mounted on the stand in a way that's not perfectly aligned, leading to a crooked display. YouTuber iPhonedo over the weekend published a review of the M1 iMac, and he found that his machine appeared to be tilted on one side, a mounting disparity that was visibly noticeable and proved with a ruler. Another...
studio buds family

Beats Studio Buds Debuting Today With Active Noise Cancellation, Stemless Design, and More for $150

Monday June 14, 2021 8:00 am PDT by
We've seen a lot of teasers about the Beats Studio Buds over the past month since they first showed up in Apple's beta software updates, and today they're finally official. The Beats Studio Buds are available to order today in red, white, and black ahead of a June 24 ship date, and they're priced at $149.99. The Studio Buds are the first Beats-branded earbuds to truly compete with AirPods...
16 inch macbook pro m2 render

When Can We Expect the Redesigned MacBook Pros Now?

Wednesday June 16, 2021 7:11 am PDT by
With no sign of redesigned MacBook Pro models at this year's WWDC, when can customers expect the much-anticipated new models to launch? A number of reports, including investor notes from Morgan Stanley and Wedbush analysts, claimed that new MacBook Pro models would be coming during this year's WWDC. This did not happen, much to the disappointment of MacBook Pro fans, who have been...
apple new iphone case colors

Apple Releases New Sunflower, Cloud Blue and Electric Orange iPhone 12 Cases

Monday June 14, 2021 11:12 am PDT by
Apple today released silicone iPhone cases for the iPhone 12, 12 Pro, 12 Pro Max, and 12 mini in a series of new colors that include sunflower, cloud blue, and electric orange. Sunflower is a bright yellow shade, cloud blue is a soft, light blue, and electric orange is a bright orange that's darker than the kumquat color and more orange than pink citrus. The new cases are priced starting...
ipad iphone duo ios 12

Apple Releases iOS and iPadOS 12.5.4 Security Fix for Older iPhones and iPads

Monday June 14, 2021 10:15 am PDT by
Apple today released new iOS and iPadOS 12.5.4 updates, with the new software aimed at older devices that are unable to run the iOS 14 update that's available on modern devices. The iOS and iPadOS 12.5.4 updates can be downloaded for free and the software is available on all eligible devices over-the-air in the Settings app. To access the new software, go to Settings > General > Software...
files app ipados 15

iPadOS 15: Files App Gains NTFS Support, Progress Indicator, and More

Tuesday June 15, 2021 3:41 am PDT by
Apple in iPadOS 15 has added the ability to access NTFS-formatted media from within the Files app. The additional support for the Windows-related format, first discovered by YouTuber Steven Fjordstrøm, is read-only, so like on macOS you can't modify files stored on NTFS devices, but you can at least copy any data on them for working on elsewhere on your iPad. The Files app has also gotten a...
maxresdefault

Apple CEO Tim Cook: Sideloading Apps Would 'Destroy the Security' of the iPhone

Wednesday June 16, 2021 10:49 am PDT by
Apple CEO Tim Cook this morning participated in a virtual interview at the VivaTech conference, which is described as Europe's biggest startup and tech event. Cook was interviewed by Guillaume Lacroix, CEO and founder of Brut, a media company that creates short-form video content. Much of the discussion centered on privacy, as it often does in interviews that Cook participates in. He...
maxresdefault

Demo: Check Out AirPlay 2 on a Mac in macOS Monterey

Tuesday June 15, 2021 11:57 am PDT by
With macOS Monterey, Apple has introduced expanded AirPlay 2 support, so you can AirPlay content from an iPhone, iPad, or even another Mac to your main Mac. We thought we'd do a quick demo of this handy new feature in our latest YouTube video. Subscribe to the MacRumors YouTube channel for more videos. With AirPlay to Mac, you can extend or mirror an Apple device's display to a Mac, and since ...
nomad airtag wallet card 2

Nomad's Latest Accessory Makes It Easier to Put an AirTag in Your Wallet

Monday June 14, 2021 12:00 pm PDT by
Nomad, known for its range of accessories designed for Apple devices, today announced the Card for AirTag, which is designed to make it easier for an AirTag to fit inside a wallet for tracking purposes. With Card for AirTag, an AirTag fits inside the middle of a card-shaped holder that's then meant to fit inside of a wallet. According to Nomad, the design offers a smooth, uniform shape that...