FCC Gives Free Pass to Divide Up Internet to AT&T and Verizon

AT&T and Verizon have been given a big pass by the new sheriff in town at the Federal Communications Commission.

The so-called zero-rating offers that allow customers to watch video from certain applications from their mobile devices without it counting against their monthly data caps that were being offered by the company were being investigated by the FCC and the agency has ended that investigation, the FCC said.

Without counting that data against their monthly data caps, AT&T lets its wireless customers stream its $35 a month DirecTV video service over the AT&T wireless network. Verizon lets doesn’t charge for data usage and allows customers stream its Go90 video service.

Measures to dismantle policies adopted by the Democrats under the previous administration is being taken by the new chairman, Ajit Pai, who was appointed last week by President Donald Trump and the news is part of those measures.

Among other controversial policies, such as expansion for the Lifeline program, which provides subsidies for broadband and phone service to low-income families, expected to be on the chopping blocks is the controversial 2015 net neutrality rules, which now treats broadband service like a public utility.

The zero-rated plans offered by these companies have been popular with consumers, Pai said in a statement.

“Going forward, the Federal Communications Commission will not focus on denying Americans free data,” he said. “Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.”

The agency’s net neutrality rules, which requires all services on the Internet to be treated the same is violated according to critics while the practice offers some benefits to customers. They claim highlights the fact that data caps are unnecessary and it puts smaller competitors at a disadvantage.

Notifying them that it has also closed inquiries into their practices, the FCC also sent letters to Comcast and T-Mobile. A preliminary accusing AT&T and Verizon of violating the FCC’s net neutrality rules by favoring their own video services over services of competitors was issued by the FCC in December, then under Democrat Tom Wheeler’s leadership, even as the agency initially launched its informal investigation into these four companies more than a year ago.

AT&T and Verizon are free to continue offering their services without charging for data usage now that the inquiry is closed and the FCC didn’t impose a penalty when it issued its report in December.

The move was called “a win for millions of consumers” by AT&T in a statement. Verizon it is “very encouraged that the FCC agrees” and it says that it always believed its free data programs benefited consumers.

However not so optimistic were consumer advocates who have opposed the zero-rating offers, and who fought for more than a decade to get the FCC to adopt net neutrality. The FCC’s move was called as “deeply troubling” by the Washington, D.C.-based consumer watchdog group Public Knowledge.

“The FCC is saying that AT&T and Verizon are allowed to zero rate their own video services, and effectively charge customers more to access competing services,” Ryan Clough, general counsel for Public Knowledge said in a statement. “The 2015 net neutrality rules are still the law, but that doesn’t mean very much if the FCC refuses to enforce them.”

(Adapted by CNBC & CNet)

 

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Categories: Economy & Finance, Entrepreneurship, Regulations & Legal

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