Net Neutrality: FCC Chair Tom Wheeler Accuses AT&T, Verizon Of Violating Law With Zero-Rating Programs

Federal Communications Commission (FCC) chairman Tom Wheeler will step down from his post when President-Elect takes office but has one last word of warning before he goes. Wheeler accused AT&T and Verizon of violating net neutrality with zero-rating practices.

The finger wave came in the form of a letter sent from Wheeler to a number of senators—Edward Markey, Ron Wyden, Al Franken, Bernie Sanders, Elizabeth Warren, Tammy Baldwin and Richard Blumenthal—in response to a letter sent in November calling on the FCC to take action against zero-rating policies offered by a number of internet service providers.

In the note, Wheeler outlined his views and concerns regarding zero-rating—a practice of exempting certain services from data caps and providing an unfair advantage over competitors—in which he states the practice doesn’t inherently violate the principles of net neutrality.

However, Wheeler points out that two particular programs, AT&T's Sponsored Data and Verizon's FreeBee Data 360, “present significant risks to consumers and competition.”

Accompanying the letter from Wheeler is a report published by the FCC Wireless Telecommunications Bureau that details the practices of programs from AT&T and Verizon and concludes the companies are in violation of net neutrality rules that prohibit the discrimination of any form of data—including blocking entirely, throttling speeds, or exempting certain data from charges that others are subject to.

The issue for both AT&T and Verizon stems from the fact the companies allow unlimited streaming of their own video services, DirecTV Now from AT&T and Go90 from Verizon, while other streaming services count against a subscriber’s data cap. Other services can be exempted from the data cap as well, but they are required to pay the carrier for the privilege.

Wheeler noted AT&T failed to provide complete responses to questions posed by the FCC, leaving the commission to examine the carrier’s practices without its input. In any case, the commission found both AT&T and Verizon’s programs to be of concern and potentially in violation of net neutrality.

Will Johnson, the senior vice president of federal regulatory affairs for Verizon, told IBTimes, “The staff’s positions are duly noted. We don’t agree with their view on free data and we don’t think our customers do either. Hopefully the next FCC will take into account the views of our customers who greatly benefit from watching professional football, soccer, basketball and other great content on go90 free of data charges.”

Joan Marsh, AT&T’s senior vice president of federal regulatory, issued the following statement in response to the FCC report:

“It remains unclear why the Wireless Bureau continues to question the value of giving consumers the ability to watch video without incurring any data charges. This practice, which has been embraced by AT&T and other broadband providers, has enabled millions of consumers to enjoy the latest popular content and services – for free. We hope the government continues to support a competitive marketplace that lowers costs and increases choice for consumers.”

AT&T has already blown off warnings from the FCC about its decision to exempt its own streaming TV service DirecTV Now against data caps. In a letter sent in December 2016, AT&T asserted the FCC had no authority to prevent it from offering its zero-rating policy and said, “whatever judgment the Bureau purports to pass on this program before January 20 will very likely be reversed shortly thereafter.”

AT&T has also indicated it feels confident that its proposed purchase of Time Warner, the programming entity that owns CNN and HBO, will be approved under a Trump administration after being blocked by the FCC under President Obama.

While the report and letter from Wheeler are stern and provide legislators with the framework to pursue further action, the FCC itself likely won’t be in a position to do so itself. Wheeler is set to step down when President-Elect Trump takes office on Jan. 20, and the Senate failed to reconfirm one of the current board members who voted in favor of net neutrality rules.

The Trump transition team has appointed three opponents of net neutrality to oversee changes to the FCC, including two former lobbyists for major mobile carriers. Republican appointed members of the FCC who will hold their positions through the transition have already advocated for rolling back net neutrality rules implemented under Wheeler’s leadership during the Obama administration.