Zero chance of FCC zero rating opinion mattering

by Steve Blum • , , ,

Just leave it in the in-box.

AT&T’s and Verizon’s practices of offering video programming and then giving subscribers free – zero rated – bandwidth to watch it “present significant risks to consumers and competition” according to a report prepared by Federal Communications Commission staff and destined for a quick trip to the recycling bin. Zero rating wasn’t explicitly banned by the commission’s 2015 decision to classify broadband as a common carrier service, but it wasn’t given a clean bill of health either. Instead, it was left in the case-by-case review category.

FCC staff looked also looked at T-Mobile’s zero rating program, and concluded it’s probably okay.

AT&T lets certain DirecTv subscribers watch programming without it counting against their data caps. The report dismissed AT&T’s contention that DirecTv is actually paying for the bandwidth used, saying, in effect, that it was an accounting ploy and “would result in no net expenditure at the holding company level”. It’s a different story, though, for competing video service providers…

AT&T imposes hefty per-gigabyte charges on unaffiliated third parties for use of Sponsored Data. All indications are that AT&T’s charges far exceed the costs AT&T incurs in providing the sponsored data service. Thus, it would appear that AT&T’s practices inflict significant unreasonable disadvantages on edge providers and unreasonably interfere with their ability to compete against AT&T’s affiliate, in violation of the General Conduct Rule [of the 2015 common carrier/net neutrality decision].

And that handwringing is pretty much all that’s going to come of the report. FCC chairman-in-waiting Ajit Pai was quick to shred the findings…

This report, which I only saw after the FCC released the document, does not reflect the views of the majority of Commissioners. Fortunately, I am confident that this latest regulatory spasm will not have any impact on the Commission’s policymaking or enforcement activities following next week’s inauguration.

Pai’s dismissal echoed the comments AT&T made when it blew off FCC staff during the review process that led to the report.