AT&T, Verizon defend zero-rated data ahead of FCC transition

FCC Chairman Tom Wheeler, left.

The nation’s two largest wireless carriers have told the FCC to ease up on its probe of zero-rated mobile data policies. But the issue may soon be moot anyway under President-elect Donald Trump’s administration.

The commission recently sent letters to both Verizon and AT&T warning that their policies for zero-rated content could harm competition and consumers. 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 content from its recently launched DirecTV Now for its wireless customers; Verizon does the same with its Go90 offering.

AT&T fired back this week in a filing with the FCC’s Wireless Telecommunications Bureau, telling chief Jon Wilkins that the business model helps consumers access content they may not otherwise be able to afford.

“Data Free TV is precisely the kind of pro-consumer initiative this Commission should be encouraging,” AT&T lobbied. “It delivers real value to consumers and provides another video streaming alternative to cable. Other video providers can be expected to respond to this innovation either by sponsoring their own content with AT&T and/or other wireless providers or by finding different ways to improve and differentiate their offerings and generate consumer value.”

The carrier pointed to T-Mobile, which launched an effort this week to co-opt DirecTV Now by giving a free year of the service to customers who switch from AT&T. T-Mobile also added the service to Binge On, which was the first major zero-rated video service offered by a U.S. wireless operator.

Meanwhile, Variety reported that Verizon Senior Vice President Kathleen Grillo penned a letter to the wireless bureau defending the carrier’s FreeBee service, which enables content providers and other businesses to pay the freight of transmitting data to customers.

“Offering customers free services is a well-known competitive tactic,” Grillo wrote, according to Variety’s report. “There is no evidence that FreeBee—or Go90’s participation in FreeBee—has injured or could harm consumers or competition. In fact, FreeBee data provides tangible benefits to consumers by increasing the amount of what they can do and watch online, at no cost to them.”

Critics claim zero-rated data policies violate net neutrality principles because they give some content providers an advantage over others. The issue has become increasingly contentious as wireless carriers expand into media, enabling them to offer their own content to customers at no cost.

Net neutrality has been a top priority at the FCC under Chairman Tom Wheeler, who has led the agency since 2013. Wheeler said this week he will step down next month as Trump is inaugurated, however, and the industry is likely to see rollbacks of Obama-era regulations under the new administration.