Verizon, AT&T questioned over zero-rated data

FCC headquarters
FCC headquarters

FCC Chairman Tom Wheeler isn’t throwing in the towel over zero-rated wireless data quite yet.

The Commission sent letters to both Verizon and AT&T warning the carriers that their policies for zero-rated content could harm competition and consumers, The Wall Street Journal reported this morning. The model enables users to consume specific types of video and other content on mobile devices without incurring wireless data charges.

AT&T zero-rates data for its wireless customers through DirecTV Now, the OTT video offering it launched this week. Verizon does the same with Go90, an OTT video service targeted primarily at millennials.

Zero-rated services have come under fire from net neutrality proponents who claim they allow deep-pocketed media companies to pay for access to mobile subscribers, giving them an unfair advantage over smaller players. The model is becoming increasingly controversial as wireless carriers expand into digital media, giving them an opportunity to push their own content over that of third parties.

Backers of zero-rated offerings say the model enables consumers to access content and services they might not otherwise be able to afford. The FCC has said it continues to review such offerings, but the Commission has yet to intervene in a significant way.

Indeed, the Commission’s letter to Verizon claims the company’s policies regarding zero-rated content have “the potential to hinder competition and harm consumers,” according to the Journal. The FCC also wrote that such policies “interfere with the ‘virtuous cycle’ needed to assure the continuing benefits of the open internet.”

The FCC included “a list of detailed questions for AT&T,” the Journal reported, and asked both of the nation’s largest carriers to respond by Dec. 15.

It seems increasingly unlikely that the FCC will take a heavy-handed approach to zero-rated data policies, however. Net neutrality has been a top priority with Wheeler at the helm of the FCC, where Democrats have outnumbered Republicans 3-2. That edge will almost surely disappear once President-elect Donald Trump moves into the White House, however, and Wheeler is replaced as chair.

Indeed, all three of Trump’s advisers on his FCC landing team have vocally opposed net neutrality rules, saying they’re unnecessarily burdensome on service providers. Mark Jamison, a former Sprint lobbyist on Trump’s FCC transition team, wrote in June that net neutrality “is backfiring” and should be dropped. “This means letting the industry make business decisions and regulating only when monopolies take over,” he wrote.