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

2024 iPhone Boxes Feature

Apple Changes Trade-In Values for iPhones, iPads, Macs, and More

Thursday January 16, 2025 6:45 am PST by
Apple today adjusted estimated trade-in values for select iPhone, iPad, Mac, and Apple Watch models in the U.S., according to its website. Some values increased, while others decreased. The changes were not too significant, with most values rising or dropping by $5 to $50. We have outlined some examples below: Device New Value Old Value iPhone 15 Pro Max Up to $630 U ...
iPhone 17 Slim Feature Single Camera 1 Redux

'iPhone 17 Air' Launching Later This Year With These 10 New Features

Wednesday January 15, 2025 7:16 am PST by
While the so-called "iPhone 17 Air" is not expected to launch until September, there are already plenty of rumors about the "ultra-thin" device. Overall, the "iPhone 17 Air" is shaping up to be a mixed bag. Due to its thinness, the device is expected to have some limited specifications compared to the iPhone 17 Pro models, including only a single rear camera, only a single speaker, no SIM...
Generic iOS 18

Everything New in iOS 18.3 Beta 3

Thursday January 16, 2025 12:39 pm PST by
Apple provided the third beta of iOS 18.3 to developers today, and while the betas have so far been light on new features, the third beta makes some major changes to Notification Summaries and also tweaks a few other features. Notification Summary Changes Apple made multiple changes to Notification Summaries in response to complaints about inaccurate summaries of news headlines. For...
Generic iOS 19 Feature Mock Light

iOS 19 Leak Reveals All-New Design

Friday January 17, 2025 2:42 pm PST by
iOS 19 is still around six months away from being announced, but a new leak has allegedly revealed a completely redesigned Camera app. Based on footage it obtained, YouTube channel Front Page Tech shared a video showing what the new Camera app will apparently look like, with the key change being translucent menus for camera controls. Overall, the design of these menus looks similar to...
Apple Card iPhone 16 Pro Feature

Three Companies Are Now in the Running to Take Over the Apple Card

Thursday January 16, 2025 8:18 am PST by
Apple is in talks with Barclays and Synchrony about becoming its new financial partner for the Apple Card, according to Reuters sources. The report today added that Apple has also been holding discussions with Chase Bank owner JPMorgan since last year, so there are at least three potential companies in the running to take over the Apple Card from current partner Goldman Sachs. Goldman...
MacBook Air 15 Inch Feature Blue

MacBook Air Likely Apple's First Product Update of 2025: What to Expect

Wednesday January 15, 2025 8:49 am PST by
There is a good chance that Apple's first product announcement of 2025 will be updated 13-inch and 15-inch MacBook Air models with the M4 chip. Last month, Apple released macOS Sequoia 15.2, and in doing so it accidentally confirmed new MacBook Air models are coming this year (unsurprisingly). Bloomberg's Mark Gurman said the new MacBook Air models will be announced "earlier" than some...
iPhone 17 Pro Dual Tone Feature 1

iPhone 17 Pro Launching Later This Year With These 8 New Features

Thursday January 9, 2025 5:45 am PST by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. iPhone 17 Pro concept based on rumors Below, we recap key changes rumored for the iPhone 17 Pro models as of January 2025: More aluminum: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models ...
iPhone 17 Pro Dual Tone Horizontal Single Feature

iPhone 17 Rumored to Feature Major Thermal Design Upgrade

Friday January 17, 2025 4:33 am PST by
The iPhone 17 lineup will feature a vapor chamber heatsink to improve thermal performance, according to a new report. The news comes from Chinese tech news site MyDrivers, which claims that the entire iPhone 17 lineup, consisting of the iPhone 17, iPhone 17 Air, iPhone 17 Pro, and iPhone 17 Pro Max, will adopt the improved thermal heat spreader. Vapor chamber technology is already used...
HomePod mini and Apple TV

Apple Expected to Launch 20+ Products This Year: Here's the Full List

Friday January 17, 2025 5:30 am PST by
2025 promises to be quite a big year for Apple, with the company rumored to be planning more than 20 product announcements this year. Apple's rumored smart home hub will be its second all-new product to launch in as many years, following the Apple Vision Pro headset last year. And of course, we will get several new iPhone and Apple Watch models, like every year. Beyond that, Apple could...

Top Rated Comments

mrbrown Avatar
106 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
106 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
106 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
106 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
106 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
106 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)