Senator Wyden Warns That AT&T's New Merger Poses A Massive Threat To Net Neutrality

from the nickel-and-dime dept

Thu, Nov 3rd 2016 10:44am — Karl Bode

As AT&T fires up its lobbyists and various policy tendrils to sell the company's $100 billion (including debt) acquisition of Time Warner, the focus of the conversation has very quickly shifted to net neutrality and zero rating. AT&T already exempts its own content from the company's usage caps, and its DirecTV Now streaming service, launching later this month, is expected to follow suit. Once AT&T acquires Time Warner and its various properties (HBO, CNN), the worry is that this content will also get a leg up by being cap-exempt, creating an unlevel playing field for competing content and streaming services.

Senator Ron Wyden this week made it abundantly clear that he sees the new AT&T merger as a significant threat to net neutrality. In a letter to FCC boss Tom Wheeler (pdf), Wyden specifically points to AT&T's ever-expanding usage caps and the practice of zero rating as "anti-competitive practies that harm consumers" and small businesses alike:

"I am deeply concerned that if AT&T acquires Time Warner's content, the new mega-company will have incentives to prioritize its own content over content created by small business, independent artists or by its rivals."

As we've noted more than a few times, Wyden also highlights how usage caps are arbitrary and unnecessary constructs in the first place:

"Nearly all data caps, and particularly those attached to wireline broadband plans, have nothing to do with network management and everything to do with profiting from an ever-more-consolidated broadband market. Data cap plans that zero rate data at the discretion of the ISP violate the principle of net neutrality by creating an internet where one bit is favored over another bit absent user control...I am deeply concerned that if AT&T acquires Time Warner's content, the new mega-company will have incentives to prioritize its own content over content created by small business, independent artists, or by its rivals."

The problem, as we've long noted, is that while the FCC passed net neutrality rules last year, it failed to prohibit zero rating, and has yet to take any meaningful stand on usage caps. Usage caps aren't just price hikes on uncompetitive broadband markets, they're incredibly effective at giving incumbent ISP content a leg up in the market using zero rating. And while the FCC claimed it would be launching an "informal information exercise" to examine the negative repercussions of caps and ratings, that inquiry has resulted in jack shit in terms of actual enforcement.

As a result, we've now got AT&T, Comcast and Verizon all using caps to give their own content an unfair advantage, while Sprint and T-Mobile happily sell "unlimited" data plans that throttle games, music, and video unless consumers pay a premium. The FCC's failure to ban these peripheral behaviors, as we warned, opened the door to all of this, and AT&T's new mega-merger has the potential to take the problem to an entirely new level.

Wyden was quick to note on Twitter that he'll introduce legislation if the FCC fails to act:

Should it be necessary, I will introduce legislation to protect consumers & the open internet. #NetNeutrality #ATTTimeWarner
— Ron Wyden (@RonWyden) November 1, 2016

The problem is that in a nation where the majority of consumers don't even know what a gigabyte is, zero rating is simply too confusing. Most consumers (and many reporters) still labor under the illusion that zero rating gives them something for free, ignoring that usage caps are an entirely arbitrary construct layered on top of what's already some of the most expensive wireless data rates in the developed world. Without consumers understanding how anti-competitive usage caps and zero rating truly are, there's less political pressure to do something about it -- which is why the FCC continues to twiddle its thumbs on the sidelines.

The debate over the AT&T merger is thankfully bringing this entire conversation to the foreground, but it's also going to be a wonderful opportunity for AT&T, its lobbyists, and loyal politicians to confuse consumers even further.

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Filed Under: competition, merger, net neutrality, ron wyden, zero rating
Companies: at&t, time warner

12 Comments

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Anonymous Coward, 3 Nov 2016 @ 11:10am

I fully expect a statement from AT&T (or someone paid by AT&T) along the lines of "Without Data Caps the Internet wouldn't exist. You wouldn't want China and Russia to use up all of the Internet would you?"
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Anonymous Coward, 3 Nov 2016 @ 11:13am

This is exactly why I voted for Wyden again.
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Michael, 3 Nov 2016 @ 11:46am

Re:
Which would be meaningful if your E-Voting system was not hacked and your vote changed.

Damn Russians.
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Anonymous Coward, 3 Nov 2016 @ 12:41pm

it's a shame that there is no mention of how AT&T, as well as other telecom/ISPs restrict the implementation of better services, all done to protect themselves and how there are multiples of Congressmen/Women who have all aided this in whatever way they have been told to. perhaps he needs to raise this in Congress because it's no good having a go at Wheeler and the FCC if their efforts are kicked into touch by Wyden's fellow members
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Anonymous Coward, 3 Nov 2016 @ 12:51pm

Hillary's already bought & paid for by ATT
Podesta forgot to tell clueless Senator Ron Wyden.
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Anonymous Coward, 3 Nov 2016 @ 12:53pm

Does AT&T's New Merger Pose A Massive Threat To Net Neutrality?
Not wittingly.
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Ed Allen, 3 Nov 2016 @ 1:25pm

Re: Does AT&T's New Merger Pose A Massive Threat To Net Neutrality?
They know fully well that a neutral network leaves them without the power to extort
additional fees from content providers for access to viewers who also must pay extra for access
they already paid for.

Netflix makes a profit, they think that it is only FAIR for them to get a percentage.

The only way AT&T et. al. can increase profits without investing in improving service is by
cutting current service off so that all parties will pay whatever they must to get it turned back on.
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Anonymous Coward, 3 Nov 2016 @ 1:29pm

When did internet service stop being "too cheap to meter". It started being too cheap to meter as residential broadband started rolling out. I remember paying hourly rates for a dial up connection including a discount for off peak hours because my ISP had a limited modem pool.

Also as metered connections are coming back into vogue why haven't we been seeing more discussion from state departments of weights and measures ensuring accuracy of the meters. I would expect government agencies to be looking for more regulatory authority. Which would then rapidly turn into regulatory capture and used to keep new entrants out of the market.
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Anonymous Coward, 3 Nov 2016 @ 2:08pm

Re: Re:
Wyden is an Oregon senator. We vote by mail. No E-Voting systems.
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Eldakka (profile), 3 Nov 2016 @ 7:52pm

Re: Re:
I doubt the Russians have any incentive to change votes.

I mean, the current US political system is just as captured as the previous Soviet system. The only difference is in the Soviet system you had to be a member of the communist party. In the US system you have to be a member of one of 2 parties.

I'd suggest the CIA or NSA have a greater vested interest in changing e-votes than the Russians.
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Anonymous Coward, 4 Nov 2016 @ 9:28am

isn't Wyden pro TPP?
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Anonymous Coward, 4 Nov 2016 @ 10:28am

ATT / Comcast / Others?
Is there a difference between any of them when zero rating their own "services"? Isn't the chief complaint with all of these services that their networks would be overburdened if EVERYONE could access video (or whatever) from other providers? So, for instance, if ALL of ATT's customers paid for and started viewing ATT's zero rated video on their phones the network wouldn't suffer. Hmmm -- sounds like a diversion tactic to me.

So, why, then, Wyden, just pick on ATT?
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