FCC Inexplicably Hates Free Data For Consumers
December 13, 2016
Under the leadership of Chairman Tom Wheeler, the Federal Communication Commission (FCC) has interfered with the free market and allowing consumer-friendly initiatives to prosper. For example, while the FCC’s latest rules for net neutrality are making their way through the federal courts, the agency is using the rules to go after the private sector in terms of how they offer wireless data to their customers and what’s known as “Zero Rating.” Zero rating is a type of service that allows for providers to give “free data” for content to their customers. The way it works is that some content doesn’t get counted as part of data used in a customer’s plan with their wireless provider.
In short, a company offers something for free to their customers as part of their paid service. This is a great way to get more customers and have competitors contemplate offering similar services to fill the marketplace with more options. This all seems like a win for companies and consumers. But, Chairman Wheeler disagrees and apparently would prefer people pay for something they can receive for free.
Free data services offered up by providers has increased competition in the wireless market and has garnered applause from minority groups. Earlier this year, a Law360 article noted that “the Multicultural Media, Telecom and Internet Council told the Federal Communications Commission in a report Monday that the providing of free data through so-called zero-rating plans does not harm competition and could help close the digital divide, particularly benefiting minorities and low-income households.”
Digital Liberty noted that:
“To illustrate the competition this will bring to the market, in its earliest stages, there are already competing plans across networks. T-Mobile has its “Binge On” program that allows users exemptions from numerous sites. Verizon and AT&T also have their “FreeBee Data” and “Sponsored Data” programs respectively. Sprint has also recently added its “Unlimited Freedom” program to add to the competition. Consumers already have choices when it comes to this policy, and there is no indication that that will not continue if expanded.”
Recently, the FCC specifically took aim at AT&T engaging in zero rating offerings for a new service the company rolled out that will allow customers to stream DirectTV without using their data. In a letter sent to the company earlier this month, Wheeler challenged AT&T and used net neutrality rules as the basis for opposition. The letter stated that the free data offerings, “inhibit competition, harm consumers, and interfere with the ‘virtuous cycle’ needed to assure the continuing benefits of the Open Internet.”
Wheeler is calling on AT&T to provide additional information before any final determination is made in terms of what the Commission will do as it relates to their DirecTV streaming service. They are also gathering information about what other companies are doing as it relates to zero rating, including Verizon’s NFL mobile streaming service.
The real problem isn’t that providers are not following the rules of net neutrality; the real problem is that the FCC and Chairman Wheeler are interfering with the opportunity for consumers of all income levels to enjoy more content.
Instead of trying to come between providers and consumers, Chairman Wheeler should use what is (hopefully) his limited time left at the FCC to encourage more innovation in the wireless space by allowing providers to try new services with their consumers. The more offerings on the table, the better competition and the lower the cost will be for potential and existing customers.