U.S. regulators are calling out AT&T and Verizon for exempting their own video apps from data caps on customers’ cellphones.
This may not result in any changes in how the wireless carriers operate, however, as agency leaders appointed by Donald Trump, the incoming president, are expected to look more favorably on such practices.
The Federal Communications Commission sent letters to the country’s biggest wireless carriers Thursday saying the way they handle the practice, known as “zero rating,” can hurt competition and consumers. The agency had warned AT&T in November and said in its Thursday letter that AT&T’s response did not ease its concerns.
Other services – say Hulu or Netflix – can pay Verizon and AT&T so that consumers could also use those apps without eating up cellphone data. The FCC says that could harm the market for streaming services as it makes it more expensive for internet companies to compete with video services that are owned by the carriers.
AT&T Inc. said Friday that exempting apps like its new DirecTV Now online TV app from data caps saves customers money, and the FCC shouldn’t put a stop to that. Verizon Communications Inc. said its practices are good for consumers and comply with regulations.
The warnings come in the final days of the FCC under President Barack Obama’s administration, which has enacted regulations intended to prevent cable companies from playing favorites with internet services.
The agency under Trump, along with a Republican-controlled Congress, are expected to roll back or enforce more leniently such measures.
Ajit Pai, a Republican commissioner at the FCC who is seen as a candidate to be the next FCC chairman, underscored that point in a statement Friday. He said the FCC’s zero-rating warnings were “yet another broadside against free data for consumers” and warned that actions taken by the FCC now could be undone by a newly staffed FCC after Trump takes office.
The FCC still has to make a final finding on whether the zero-rating practices of AT&T and Verizon are a problem. The companies could appeal that.