FCC Warns AT&T, Verizon They're Violating Net Neutrality With Zero Rating Schemes

from the nice-timing,-hero dept

Tue, Dec 6th 2016 6:22am — Karl Bode

Last month, we noted how the FCC had finally woken up from a deep slumber to realize that zero rating (an ISP exempting its own or a partner company's content from usage caps) can be anti-competitive. The FCC's net neutrality rules don't specifically ban zero rating, but the agency had said it would act on a "case by case basis" should the practice be used anti-competitively. But a year came and went, and the FCC consistently failed to act as ISPs from Comcast to Verizon began giving their own content an unfair leg up in the market.

That was until last month, when the FCC sent AT&T a letter warning it that exempting its DirecTV Now content from AT&T wireless usage caps raised "serious concerns" about the open internet. Apparently unfazed by AT&T's defense of its behavior, the FCC last week sent an additional letter to AT&T (pdf) saying it believes that AT&T's implementation of usage caps hurts competition:

"...Your submission tends to confirm our initial view that the Sponsored Data program strongly favors AT&T's own video offerings while unreasonably discriminating against unaffiliated edge providers and limiting their ability to offer competing video services to AT&T's broadband subscribers on a level playing field. We have therefore reached the preliminary conclusion that these practices inhibit competition, harm consumers, and interfere with the "virtuous cycle" needed to assure the continuing benefits of the Open Internet."

Again, why it took the FCC the better part of a year to realize this isn't clear, but the agency sent a similar letter to Verizon (pdf). In that letter, the FCC criticizes Verizon's "Free Bee" sponsored data service that lets competing content companies enjoy the same cap-exempt status Verizon's own content enjoys -- if companies are willing to pay a steep premium:

"Under either option for competing with Verizon' s Go90 or other affiliated edge services, unaffiliated edge providers appear to confront significant disadvantages when trying to compete with Verizon from the combined impact of Verizon's FreeBee Data 360 fees and zero-rating of its own Go90 offerings. We are therefore concerned that this combination could present anti-competitive effects."

That's great, FCC, we're so glad you could join the rest of us in realizing the obvious. But while the FCC's letters urge both AT&T and Verizon to offer up further justifications before December 15, there's no indication any FCC enforcement or punishment for these violations will survive the Trump administration. We've noted how all of Trump's telecom advisors not only have deep ties to the broadband industry, but have actively stated they want to gut net neutrality rules entirely in addition to hamstringing and defunding the FCC.

In fact Ajit Pai, a current Commissioner in the running for new FCC boss issued a statement (pdf) reminding the FCC that whatever it does can (and likely will) be undone by the new administration:

"Chairman Wheeler launched yet another broadside against free data for consumers, notwithstanding the objections of Republican commissioners. This end-run around Congress’s clear instruction is sad—and pointless. For any unilateral action taken by the Wireless Telecommunications Bureau at the Chairman’s direction in the next 49 days can quickly be undone by that same bureau after January 20, 2017."

So again, it's great that the FCC finally realized that using caps to give your own content an unfair market advantage is anti-competitive, but the enforcement (if you can call it that) comes too little too late for consumers, given the incoming administration has made every indication it intends to either refuse to enforce the existing rules, or work to scrap net neutrality protections entirely.

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Filed Under: competition, fcc, net neutrality, zero rating
Companies: at&t, verizon

29 Comments

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Anonymous Coward, 6 Dec 2016 @ 6:33am

and AT&T and Verizon are just going to ignore this long enough until Trump has managed to gut the FCC.
Because we care about our US customers soooo much.
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Anonymous Coward, 6 Dec 2016 @ 6:43am

State Actors get Notice
They are both essentially part of the government at this point since they sell wholesale all of our data in real time without warrant or court order. These type of legal notices are too little, too late.
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Anonymous Coward, 6 Dec 2016 @ 6:48am

Proving my point...
"The FCC's net neutrality rules don't specifically ban zero rating, but the agency had said it would act on a "case by case basis" should the practice be used anti-competitively."

This is ONE of the reasons the new rules suck. This is nothing more than we pick and choose winners and losers based on their ability to kiss our ass or bless our pocket books or whatever form of preferred corrupt dujour of the day is.

"But a year came and went, and the FCC consistently failed to act as ISPs from Comcast to Verizon began giving their own content an unfair leg up in the market."

let me point out again....

"and the FCC consistently failed to act" or act in the public interest...

we could have just published an article like that once a week since 1934 and there would be no point in time where this would not have been true!
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Anonymous Coward, 6 Dec 2016 @ 7:16am

Ajit Pai is quite possibly the biggest piece of shit in the world.
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Anonymous Coward, 6 Dec 2016 @ 7:18am

Comcast excuse for FAIRNESS is of course a whole pile of crap! It's always been about protecting their bottom line with TV service and all the extra fee's for that and not just becoming a dumb pipe. That's the whole point of CAP's on at least wired Networks. Quite frankly, I see no reason to even get faster speeds because the CAP is the same no matter what speed you have and faster speeds just mean you'll hit the CAP faster and then get charged more money unless you pay a extra $50 to get unlimited, something you already had but now have to pay a extra $50 for. Talking about a scam.

Biggest problem is we've had these Government created monopolies forever and they're the ones that keep writing the rules and screwing the people for more and more money. Why shouldn't their be Comcast and TWC and anyone else in the SAME CITY's fighting it out for customers!!!
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Anonymous Coward, 6 Dec 2016 @ 7:44am

Re:
Exactly. We can rundown Trump all we want, but the current administration has done nothing of value in the last 8 years so why are we panicking now?
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PaulT (profile), 6 Dec 2016 @ 7:47am

Re: Proving my point...
Yet, you never answer the question of what the preferred alternative should be. Strange, isn't it?

"This is ONE of the reasons the new rules suck"

As opposed to the old rules which, unless I'm missing something, wouldn't have banned the practice at all?
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Anonymous Coward, 6 Dec 2016 @ 8:09am

Re: Re: Proving my point...
You are a liar, the answer has been given many times and not just by me... you along with many others just keep rejecting it and then repeat AGAIN that an alternative was never given, you sound just like a politician! Or rather... you are a clear example of what the type of mush the political process has done to citizens like you.

The solution RAYMOND!!! is to bring back the free-markit, institute anti-monopoly and anti-trust rules ONLY, and then directly tie the agencies funding directly to their performance. In this way people will get competition and the government will prevent the oligarchy because it cannot have any money if it allows one.

Good luck getting it though! People like you have already fallen for the stupid and have bought into Big Government and crawl around on your groveling bellies begging for the nanny state to save you and would never in a million billion years ever vote for the right candidate. Instead you will vote for either a Hillary or a Trump but never a George or Franklin!
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I.T. Guy, 6 Dec 2016 @ 8:10am

FCC = Crappy parent
You all know that person with the terror of a child.
The one that yells "wiLLie!!! wiLLie!!! Stop doing that!!!"
Without ever imposing any kind of punishment for repeatedly bad behavior.

It's like that.
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I.T. Guy, 6 Dec 2016 @ 8:12am

Re: Re: Re: Proving my point...
Why don't you sign as whatever anymore?
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I.T. Guy, 6 Dec 2016 @ 8:14am

Re: Re: Re: Proving my point...
"but never a George or Franklin!"

So... who was YOUR George or Franklin over the past 16 years?
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Anonymous Coward, 6 Dec 2016 @ 8:16am

Re: Re:
Exactly, but it is more fun to rundown the politician you do not side with while giving your own a pass because at one point in time they offered a little hot air lip service to your cause or beliefs.

I have found that often times people's greatest hurdles are their friends present paying nothing more than lip service while only weighing the boat down with their lard as you paddle furiously to the finish line!
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PaulT (profile), 6 Dec 2016 @ 8:28am

Re: Re: Re: Proving my point...
"You are a liar, the answer has been given many times and not just by me"

Rather than call me names, do you have a citation? It's not my fault you don't want to identify yourself in any way, meaning that it's impossible to go back on your posting history.

I may have missed something, so without a provided resource I have to go on my assumption that you're the same person I notice always avoids answering that question. Maybe I'm just confusing you with another anonymous anti-FCC poster? If so, I will apologise.

"bring back the free-markit, institute anti-monopoly and anti-trust rules ONLY"

So, nothing that will stop zero rating or a number of other problems being discussed that gets you ranting about the FCC?

"In this way people will get competition and the government will prevent the oligarchy because it cannot have any money if it allows one"

So, lobbying, collusion and such things don't occur in your world? Also, your comments suggest that you're anti-"big government", but you claim that the government need to be the ones to prevent oligarchy. That's an interesting set of stances.

I'm mistaken. It's not that you haven't given an answer, it's that the answer you give is laughable and will do nothing to stop the problems being discussed.

"People like you have already fallen for the stupid and have bought into Big Government and crawl around on your groveling bellies begging for the nanny state to save you and would never in a million billion years ever vote for the right candidate"

Who was the "right candidate" in this last election? Why do you feel they would be a better candidate for the specific issue you obsess about daily? More importantly, how would they magically create a free market without "big government" intervention?
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PaulT (profile), 6 Dec 2016 @ 8:29am

Re: FCC = Crappy parent
Again, few people are saying they're being effective, but what is your solution? The mystical magical unobstructed free market is not a real-life option.
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Anonymous Coward, 6 Dec 2016 @ 8:30am

Re: Re: Re: Re: Proving my point...
There has not been one, but the closest I could thing of would be Ron Paul.

Not a single founding Father would make it in the Polls today over their Foreign Policy and Central Bank views. Additionally, if any of them did get elected, they would be assassinated because they would wreck havoc on the inJustice system in place today. Police would revolt and businesses would pour all effort into wrecking the economy in an effort to teach the citizens a lesson just like the great depression and the lead up to it.
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PaulT (profile), 6 Dec 2016 @ 8:49am

Re: Re: Re: Re: Re: Proving my point...
"Not a single founding Father would make it in the Polls today over their Foreign Policy and Central Bank views."

Well, I certainly wouldn't want someone with a view of global finance and politics from 200+ years ago. Perhaps things have changed somewhat since they were around?
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Anonymous Coward, 6 Dec 2016 @ 8:50am

Re: Re: Re: Re: Proving my point...
I will capitulate on the liar accusation, because it is true you have no true way to tell what I have written in the past.

I am indeed that anti-FCC poster but you have no need to apologize, I allowed myself to become too excited, something I am working to resolve.

You are mistaken about a few things so let me set you straight.

It will not be possible to expunge the forces that seek to bribe, extort, lobby, or corrupt the political and business atmospheres. At best we can place barriers in the way to make such things more difficult to take place. Regulatory agencies lead to capture as proven by history and present day America and the many other countries that operate in the world.

Ron Paul might have been the closest but some of his extreme views get in the way for many people which is shocking considering that Trump got elected.

And about free-market... that and big government cannot co-exist... they are polar opposites so you have the question wrong on its face. It's not...

"More importantly, how would they magically create a free market without "big government" intervention?"

The proper question is...

"How COULD they magically create a free market without 'big government' intervention?" And that answer is... they cannot because big government is the destruction of free-market.

You may consider my answers laughable but that is because you have no wisdom. Intelligence yes, knowledge yes, wisdom almost none. Only the OLDEST persons alive has even seen a free market in force in America, that was destroyed decades ago and many no longer even know what it is any more other than text on a page or an idea some crackpot came up with.

The founding fathers were wise because they already saw back then that the problems of today would occur and did their best to stave them off with the Constitution. But look at the facts. The Constitution is dead. Not even a strong minority of citizens support it. Not a single shred of it remains intact in the face of the current government and the citizens at large think that the vote for president is more important than their duty to jury service.

People are looking for a King and there is only one way that goes down! Suffering! And you and the rest will dunning-kreuger this whole fiasco into the dirt until someone has to finally get tired of it and war or civil war once again visits this land.

Every Nation gets the Government it deserves. Remember that the next time the FCC fails yet again to regulate the industry in the public's favor. They never have, I wait for the day they will ever, even once, serve the public favor. All they have ever done is sucker the unwise into believing they performed a service of value to the American people.
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Anonymous Coward, 6 Dec 2016 @ 9:02am

Re: Re: Re: Re: Re: Re: Proving my point...
That just means you are unwise.

There is truly nothing new under the sun. The basic principals for a sound economy have nothing to do with current day knowledge.

George Washington has already predicted our state of affairs in his farewell address... and additionally predicted the civil war. An exceptional impressive leader for any time. The tricks used by the current day government and economic leaders are the same tricks that occurred as far back as ancient Rome and Greece.

You just stupidly think that because a computer is involved something magical has changed. It only shows how ignorant you are despite the readily available knowledge and history at your disposal.
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PaulT (profile), 6 Dec 2016 @ 9:03am

Re: Re: Re: Re: Re: Proving my point...
"It will not be possible to expunge the forces that seek to bribe, extort, lobby, or corrupt the political and business atmospheres. At best we can place barriers in the way to make such things more difficult to take place"

But, what are those barriers. "Free market" doesn't magically happen because you remove regulation, and things like anti-trust and anti-monopoly only work if you have government agencies that will implement them. Which goes completely against your anti-government stance.

"You may consider my answers laughable but that is because you have no wisdom"

No, it's because I'm aware of facts. Truly free markets led to destitution, the "company store", child slavery and rivers on fire. Government stepped in to stop that. Yet, you think that a free market will prevent these things? That only works if there are competitive reasons to avoid them. Which won't happen if all the corporations agree that the same anti-consumer behaviour is beneficial to their bottom line. Especially since you're already starting form a place where they have all the advantages.

"All they have ever done is sucker the unwise into believing they performed a service of value to the American people."

Yet, without them, you make them depend on the kindness of corporations and the free market.
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Anonymous Coward, 6 Dec 2016 @ 9:16am

Re: Re: Re: Re: Re: Re: Proving my point...
Yes, you are correct that anti-trust and anti-monopoly goes against my anti-government stance. I have zero illusion that mankind is default good and could ever operated without a King or Government to force them to behave.

Therefore I select the the bare minimume to accomplish that which is necessary. Capitalism and Free-Market with Socialist Anti-Monopoly and Anti-Trust forces to help count the most terrible aspects of each one. Strong Socialism creates monopoly just sanctioned by the government. Complete free-market creates monopoly just unsanctioned by the government.

Yes the company store should have been put down by the law but it did not did it? Why not? Even though it had the power. Instead, the law let it get bad enough to get you to agree to giving it more power than necessary so it IT could instead force you into governments version of the company store instead.

Yes, I see the facts are strong with you. I am sure you caught the dripping sarcasm.

You have facts, and knowledge, but your lack of wisdom only allows you to trade from one master to the other master because you are easily tricked. Those with wisdom seek freedom from a master not a trade to a new one!

Consider the following.

If tyranny comes to this land it will be under the guise of fighting a foreign enemy.

This can be made to apply to your employer if you just consider them a foreign enemy even if they are your fellow citizens.

The unmitigated desire for mankind to enslave one another through all manor of law, government, employment, trade, or agreement is never ending. No economic policy can protect anything 100% from this, but some are more capable than others. That is where you lack wisdom... the inability to see that you find your destiny on the road you take to avoid it!
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Anonymous Coward, 6 Dec 2016 @ 9:26am

Re: Re: FCC = Crappy parent
"unobstructed free market is not a real-life option."

This is where I consider you to be dishonest. Keep in mind that free-market and regulation are peddled as ideas.

Free-Market principles do not necessarily mean "unobstructed". There will always be an obstruction of some kind, we mainly mean the principle of it. Same goes for regulation, we are against the 'principle' of it, but do accept that are are just certain "regulation" that cannot be avoided if you seek to have a functional economy. The trick is a balance of the two. That best balance is strong free-market with the terror of its monopolist desires put in check.

Or rather, it is best to say the problem is not monopoly or regulation, but the actors behind them. Which one is the problem? If you answered both then you are correct. So how do you pick one or the other? You realy don't you employ them BOTH! You just employ the parts of each that are of greatest benefit.

Right now, we currently only employ the WORST of both, which leads us to our predicament. We do not enforce our current anti-monopoly/trust laws and regulation now instead or preventing them, grants them, just to the highest bidder.

Liberty is the #1 principle of America... and no one here believes it in any longer!
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Anonymous Coward, 6 Dec 2016 @ 11:36am

Re: Re: Re: FCC = Crappy parent
When you have a market that depends on an infrastructure, like pipe line or cable runs on poles or underground, you have something that needs to be regulated. That is the main tool used by cable companies to cement their local monopolies, control over the infrastructure and associated rights of way.
How do you propose that that problem is solved, other than by a regulatory agency?
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Anonymous Coward, 6 Dec 2016 @ 1:16pm

Re: Re: Re: Re: FCC = Crappy parent
You are talking about a natural monopoly and that should fit right under the anti-monopoly problem which mean everything but the last mile become publicly owned infrastructure like the roads used to be.

Now-a-days the government sells them to private industries to tax travelers tolls to travel the roads which is bullshit.

Look for the day when the FCC takes over all of that, sells them to a private business and charges your smarmy asses for it... O wait... they already did! The FCC a long time ago agreed to letting the telco's have natural monopolies. Great regulating there brain child, you just got screwed by the people that were supposed to spare you!

You clearly did not understand a thing I said!
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Stosh, 6 Dec 2016 @ 1:16pm

Totally unfair article...the FCC moved at the normal speed of any bloated government bureaucracy
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Anonymous Coward, 6 Dec 2016 @ 1:31pm

Re: Re: Re: Re: Re: FCC = Crappy parent

which mean everything but the last mile become publicly owned infrastructure

The last mile is the choke point that is being abused by the ISPs. It is where the most regulation is required to avoid an anarchistic rats nest of cables. It is easy to keep routes between towns out of each others way, but how do several ISP's serve neighboring houses, while keeping their cables clear of each others, unless they share regulated poles, or better yet, make the last mile connection public controlled property available to any ISP?
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OldGeezer (profile), 6 Dec 2016 @ 2:02pm

Trump's plan
Trump to whoever wrote that letter: YOU'RE FIRED!
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Wendy Cockcroft, 7 Dec 2016 @ 6:12am

Re: Re: Re: Re: Re: Re: Proving my point...
Dr. Paul is Libertarian and actually wanted to go right back to the Articles of Confederation. Not a Founding Father type at all.
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Rekrul, 7 Dec 2016 @ 10:25am

Many science fiction shows and movies paint a future where corporations rule in place of governments. This is how it starts.
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Frozen Njal (profile), 13 Dec 2016 @ 6:12am

Re: Re: Re: Re: Re: Re: Re: Proving my point...
Long on Chinese cracker philosophy, short on practical solutions that aren't just anti-government froth.

B+ for polite, reasonable style, D- for content.

It's also funny reading diatribes like this when many of us are NOT American, especially those you are debating with.
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