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There are two big trends in data and streaming. The first is data caps, which limit how much bandwidth you can use in a month without paying extra. The other is zero-rating, where certain video services come to an arrangement with carriers to be exempt from those data caps. In theory, it’s a win for everyone: consumers, carriers, and streaming companies. But nobody, including the FCC, is quite sure if it’s actually, y’know, legal.
That’s why the FCC has sent letters to AT&T, T-Mobile, and Comcast asking them to come in to the office for a little chat about the way they exempt streaming services from data caps. Everyone has been asked to schedule a meeting by January 15.
Here’s the background: The still-contested Open Internet Rule — net neutrality, to most of us — prohibits any internet company from discriminating among services in the traffic they carry. It applies to fixed broadband, like the network that comes to your home, as well as to the mobile carriers that make your phone go. They can’t permit or force YouTube to load faster than Netflix, or Spotify more slowly than Pandora, no matter who wants to pay them truckloads of money to do so. But the rule doesn’t have any specifications in it about data limits, or exempting certain services from them.
That’s zero-rating. It was a big, fat open question left hanging when the FCC approved net neutrality back in February, and it still is today. But it is basically universally true that when something isn’t explicitly against the rules, and could be a source of revenue, people and companies will try it. And so they have.
T-Mobile has made the biggest splash with their services. They launched Music Freedom, which exempts a whole bunch of audio streaming services from data caps, way back in 2014. Last month, it was joined by Binge On for video, which launched with about two dozen services, large and small, already included.
AT&T, meanwhile, offers separate-but-related sponsored data, and is pursuing plans to work out deals with certain video apps to charge them for exemption from data caps as well.
The mobile market isn’t alone; we’re seeing examples of zero-ratings popping up in home broadband plans too, as data caps proliferate (to consumers’ chagrin). Comcast recently launched a pilot streaming-only service, and it, naturally, is exempt from Comcast’s data caps, where services like Netflix are not.
Last month FCC chair Tom Wheeler described the plans as “highly innovative and highly competitive” offerings… but that doesn’t mean the FCC isn’t interested in making sure they’re kosher.
The FCC is “asking [AT&T, Comcast, and T-Mobile] to come in and have a discussion with us about some of the innovative things they are doing,” Wheeler said during a press conference yesterday.
“This is not an investigation,” Wheeler stressed. “This is not any enforcement. This is, ‘Help us stay informed as to what the practices are.'”
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