×
You will be redirected back to your article in seconds

FCC Drops Pursuit of Wireless Firms for Offering Free Data Plans

The FCC is dropping an inquiry into whether free data plans offered by AT&T and Verizon violated net neutrality rules, a signal that the agency under new chairman Ajit Pai will take a much friendlier view of such offerings than his predecessor.

In a statement, Pai said that the “plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data.”

Public interest groups have sounded the alarm over free data, or so-called “zero-rating” plans, offered by wireless firms in which subscribers can stream certain affiliated content without having it count against their data caps. Critics have said that such plans stand to violate the spirit of net neutrality rules, as it may give an unfair advantage to some video services over others.

The current rules are based on the idea that all internet traffic should be treated equally, and they prohibit internet providers from selling to content companies so-called “fast lanes” to give them speedier access to the consumer. But the question of whether a mobile firm’s offering of “zero rating” plans — now becoming more commonplace — was left to the FCC to consider on a case-by-case basis.

In the case of AT&T, its mobility service offers a “data free TV” feature that allows its subscribers to view unlimited DirecTV and DirecTV Now content with no impact to their monthly mobile data allotment. DirecTV is a subsidiary of AT&T.

But the acting chief of the FCC’s Wireless Bureau informed the companies on Friday that they were closing the inquires, and will take no further action.

They also are rescinding a policy review report that was made public on Jan. 11, just weeks before Pai’s predecessor, Tom Wheeler, departed the FCC.

That report concluded that AT&T’s DirecTV zero-rating offering had a “potentially anticompetitive impact.” The Wireless Bureau then cited the fact that unaffiliated companies  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” to offer zero rated content on the mobile platform.

The Wireless Bureau didn’t have as much concern over Verizon’s offering of a data plan called FreeBee Data 360, but wrote that there was the “same potential for discriminatory conduct in favor of affiliated services, and its competitive impacts in the short-form portion of the market exist today.”

The report also concluded that “sponsored data offerings by vertically integrated mobile broadband providers may harm consumers and competition in downstream industry sectors by unreasonably discriminating in favor of select downstream providers, especially their own affiliates.”

The move to close the inquiry is not much of a surprise: Pai has been critical of Wheeler’s probe of zero rating services, and of the FCC’s approach to net neutrality in general.

Joan Marsh, AT&T’s senior vice president of federal regulatory, said in a statement that the FCC’s decision to close the matter “is a win for the millions of consumers who are reaping the benefits of services made available through free data programs. We’re pleased that these innovative products will be able to continue to flourish in the marketplace.”

More Biz

  • THE MASKED SINGER: L-R: Monster (T-Pain)

    New-Model Murdochs: Fox Corporation to Emerge Tuesday

    A new era for the Murdoch clan and the media business begins with the debut of Fox Corporation on Tuesday, a day before Disney completes its acquisition of 21st Century Fox. The new-model Fox will begin trading Tuesday on the NASDAQ under the FOXA symbol. On Tuesday, 21st Century Fox will initiate a complex transfer [...]

  • mark Beaven

    If Spotify Is Holding Town Halls for Songwriters, They Must Be Open (Guest Column)

    Earlier this month, Amazon, Google, SiriusXM and Spotify challenged the Copyright Royalty Board’s decision to increase the compulsory mechanical rates paid to songwriters by 44% over the next five years. The streamers have come under fierce criticism for the move, which they claim is over the complexities of the CRB’s rules but is widely assumed [...]

  • iHeartMedia Promotes Angel Aristone to Executive

    iHeartMedia Promotes Angel Aristone to Executive VP of Communications

    Angel Aristone has been promoted to executive vice president of communications for iHeartMedia, the company announced today. According to the announcement, Aristone will continue to position iHeart as a media and entertainment leader through proactive strategic communication efforts on both a local and national level. She will also continue to oversee media relations and external [...]

  • Kevin Tsujihara

    Kevin Tsujihara Out as Warner Bros. Chief Amid Sexual Impropriety Scandal

    Kevin Tsujihara has resigned his post as chairman-CEO of Warner Bros. following an investigation into his relationship with actress Charlotte Kirk and allegations he used his clout to help her find work at the studio. In a statement, Tsujihara said he realized “my continued leadership could be a distraction and an obstacle to the company’s [...]

  • TV Ad Sales Upfronts

    NBCUniversal, Sky Make Joint Ad Offering as TV Upfront Looms

    NBCUniversal and Sky PLC will offer joint packages of advertising services, a new effort to monetize the European satellite broadcaster, which was purchased by parent Comcast Corp. for $39 billion last year. Advertisers will be able to reach customers in sundry international markets as well as the United States, using inventory across NBCU and Sky [...]

  • Robert Iger and Rupert Murdochcredit: Disney

    Wall Street Applauds as Disney Nears Finish Line on Fox Acquisition

    Wall Street is rooting for Disney as the media giant reaches the finish line this week in its 15-month quest to acquire most of Rupert Murdoch’s film and TV empire. Fox shareholders, on the other hand, are being a little more cautious. Disney is poised to close the $71.3 billion deal that took many twists [...]

  • Sony Music Names Amanda Collins Head

    Sony Music Names Amanda Collins Global Head of Corporate Communications

    Amanda Collins has been named executive vice president and global head of corporate communications for Sony Music Entertainment, effective immediately, it was announced today by CEO Rob Stringer. According to the announcement, in this role she will be responsible for the company’s global internal and external communications strategy and its implementation around the world, working [...]

More From Our Brands

Access exclusive content