Zero-rated programs from vertically integrated providers may cause harm: FCC report

A branch of the Federal Communications Commission (FCC) said it had concerns with the differential pricing practices used by Verizon Communications Inc. and AT&T Inc. as it wrapped up a review of sponsored data and zero-rating. A report published Wednesday by the United States regulator’s Wireless Telecommunications Bureau said that “in particular, sponsored data offerings by vertically integrated mobile providers may harm consumers and competition in downstream industry sectors by unreasonably discriminating in favour of select downstream providers, especially their own affiliates.” As part of the review, the bureau scrutinized T-Mobile US Inc.’s Binge On, Verizon’s FreeBee Data 360 and AT&T’s Data Perks and Sponsored Data, finding nothing about T-Mobile’s offering or AT&T’s Data Perks as cause for concern. However AT&T’s Sponsored Data offering indicated a “substantial possibility” that some of its practices “may violate the General Conduct Rule,” the report said. “Our concerns about the potentially anticompetitive impact of AT&T’s conduct are based in part, but not entirely, on the fact that unaffiliated mobile video service providers must pay a significant, clearly identifiable amount of money for the sponsored data needed to offer streaming video programming to AT&T Mobility’s subscribers on a zero-rated basis,” the bureau said. It expressed similar concerns with Verizon’s program, saying it was “aware of no safeguards that would prevent Verizon from offering substantially more costly or restrictive terms to enable unaffiliated edge providers to offer services comparable to Verizon’s go90 on a zero-rated basis.” The department asked Verizon and AT&T for more information on their programs last month. In a statement published on the FCC’s website, commissioner Ajit Pai said the report “does not reflect the views of the majority of Commissioners” and that he was “confident that this latest regulatory spasm will not have any impact on the Commission’s policymaking of enforcement activities following next week’s inauguration” of president-elect Donald Trump. Doug Brake, a telecom policy analyst with the Information Technology and Innovation Foundation (ITIF), an American think tank, also criticized the report in a press release Wednesday. “Let’s hope the next FCC recognizes the benefit of genuinely new business models bringing additional competition in video distribution,” Brake said in the statement. “We should not discourage models that by any measure increase the options to access Internet services, functionally increase video competition, and lower expenses for consumers.”

Zero-rated programs from vertically integrated providers may cause harm: FCC report

Brief | January 12, 2017

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Zero-rated programs from vertically integrated providers may cause harm: FCC report

Brief | January 12, 2017

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