AT&T has had to 'shelve a bunch of stuff' because of net neutrality

A top AT&T (NYSE: T) executive said the carrier has "had to shelve a bunch of stuff" because it was unsure whether its planned offerings would comply with the FCC's new net neutrality guidelines. According to Politico, AT&T's Bob Quinn said recently that the carrier didn't want to be the first operator to offer services similar to T-Mobile US' (NYSE:TMUS) new Binge On video optimization service because AT&T executives were unsure how the FCC would react to the action.

"Since the Open Internet Order came out we've had weekly calls with the business units and literally 15 lawyers who are all trying to figure out whether that stuff we've invested in... would be a violation of the order," Quinn said, according to a Politico article cited by Ars Technica. "We've had to shelve a bunch of stuff because we've got to wait and see."

AT&T has previously argued that the FCC's net neutrality actions would stifle innovation, and the company is among a wide range of telecommunications players that are now challenging the rules in court.

AT&T's mention of Binge On is significant considering FCC Chairman Tom Wheeler recently described T-Mobile's new service as "pro-competition" and "pro-innovation." However, the FCC hasn't specifically taken a stance on the so-called practice of zero-rating: Binge On essentially makes video streaming from select providers free for users to access by removing those data transmissions from customers' monthly data allotments. The FCC's net neutrality rules don't specifically take issue with zero rating, but the agency is reportedly investigating Binge On and other such services for possible violations. For its part, T-Mobile has argued Binge On does not impinge on the FCC's net neutrality guidelines.

Interestingly, AT&T currently engages in a zero-rated service called Sponsored Data. Under that offering, first announced early last year, advertisers and others can "sponsor" access to their videos and data, thus allowing AT&T customers access to that information without the associated data costs counting toward their monthly data buckets.

The new statements by AT&T's Quinn are also noteworthy considering the FCC's net neutrality guidelines are facing their first real legal challenge starting tomorrow. Lawyers from the US Telecom Association, supported by AT&T, CTIA and others, will argue against FCC's top lawyer, Jonathan Sallet, over whether the agency can implement the Open Internet guidelines it issued earlier this year.

And mobile will likely be a key topic of discussion during those arguments. As the NationalJournal points out, AT&T and others contend that Internet connections on smartphones are really a "private mobile service" that is exempt from the Title II guidelines that form the legal underpinnings of the FCC's latest net neutrality guidelines.

It's unclear how the legal challenge to the FCC's net neutrality guidelines will proceed. The NationalJournal said this is the third time the FCC has attempted to implement net neutrality guidelines, and the agency is hoping that this latest attempt is crafted in such a way as to address the legal issues that pulled down its previous efforts. However, opponents are hopeful that the three judges -- Sri Srinivasan, Stephen F. Williams and David Tatel -- on the D.C. Circuit Court of Appeals will side with their arguments. Tatel previously ruled against the FCC's earlier net neutrality guidelines.

For more:
- see this Ars Technica article
- see this NationalJournal article

Related articles:
Analysts: T-Mobile likely to win over consumers with Binge On video streaming offer
AT&T calls FCC's proposed $100M fine for throttling 'unprecedented and indefensible'
Time Warner Cable slammed with first official net neutrality complaint

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