AT&T and Verizon offer sponsored data programs that lets companies pay so that the carrier customers can use their apps without touching their high-speed data. That may sound great for those customers, but the FCC isn’t thrilled about those offerings.
The FCC has sent letters to both AT&T and Verizon concerning their zero-rating services. Specifically, the FCC feels that AT&T and Verizon’s programs strongly favor their own streaming video offerings — DirecTV Now and go90, respectively — while limiting the ability of other services to compete fairly.
“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,” the FCC said in its letter to AT&T. A similar letter was sent to Verizon.
In its letter to AT&T, the FCC explains that with AT&T’s Sponsored Data program, a video service would have to pay AT&T $16 per month to zero-rate the data used by a customer watching 10 minutes of LTE video per day. AT&T, meanwhile, doesn’t have to pay anything since it owns DirecTV Now.
Here is AT&T’s response to the FCC’s letter:
“These are incredibly popular free services available to millions of customers. Once again, we will provide the FCC with additional information on why the government should not take away a service that saves consumers money.”
And Verizon’s response:
"We will review and respond to the inquiry as requested. In the meantime, we remain quite confident that our practices are good for consumers, non-discriminatory and are consistent with current rules."
Zero-rating services like AT&T’s Sponsored Data and Verizon’s FreeBee Data have been targets of those in favor of net neutrality who believe that all data should be treated equally. Now the FCC is stepping in, but it remains to be seen if anything will actually come of these FCC inquiries. AT&T and Verizon both believe that what they’re doing is good for consumers, and I’m sure that a lot of consumers would say that they like AT&T and Verizon’s zero-rating, so I’m sure that the carriers will fight any accusations of net neutrality violations.
AT&T and Verizon have until December 15 to respond to the FCC’s letters.