The FCC’s unwillingness to clearly ban zero rating as part of the net neutrality rules is starting to bite the agency — and consumers — squarely on the ass. Zero rating — or the practice of letting some content bypass an ISPs’ usage caps — is seen by many to be a major anti-competitive problem, given the act of giving some companies cap exempt status puts everybody else at a disadvantage. That’s why Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan have banned the practice.
But the FCC, in its infinite wisdom, decided that instead of banning zero rating, it would take a wait and see approach, addressing zero rating behavior on a case by case basis. And you can understand the logic; the FCC believes it’s best to let ISPs experiment with what they insist are just creative new pricing models. The problem is one of precedent. Allow any form of zero rating, and you’ve already opened the door to the role of ISP as warden and gatekeeper. The other problem? The FCC’s wait and see approach has so far involved doing absolutely nothing, even in the face of obvious anti-competitive behavior.
As a result, T-Mobile’s now exempting both select video and audio streaming services from caps as part of its Music Freedom and Binge On programs. AT&T and Verizon’s “Sponsored Data” programs charge companies a fee to have their content receive preferred, cap exempt status, putting any smaller companies that can’t afford the fee at a disadvantage. Comcast has been slowly expanding its usage caps, then exempting its own content from them, giving it an unfair advantage against Netflix.
Though they vary in severity, all four of these companies are using their power as middlemen to potentially give some companies an advantage over others, the very thing our net neutrality rules were supposed to put an end to. Comcast’s behavior is probably the most unapologetically anti-competitive of the bunch. Yet the FCC’s response to most of these so far has ranged from total silence to outright praise.
Well, at least until last week, when the agency finally fired off letters to Comcast, AT&T and T-Mobile (pdf), asking them for more detail on zero rating plans that have been fully detailed for months (in AT&T’s case, a few years). At an agency meeting last week FCC boss Tom Wheeler made it clear this was simply an inquiry, not an investigation, and the letter informs the companies the FCC’s just looking to better understand what ISPs are doing (the agency was, apparently, in cryogenic storage all year):
“We want to ensure that we have all the facts to understand how this service relates to the Commission’s goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources. We would also like to hear from you any additional perspectives you’d like to share about changes in the Internet ecosystem as a whole. To assist us in this review, we request that Comcast make available relevant technical…