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12 Jan

FCC Concludes That Free Data For DirecTV Now Violates Net Neutrality

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The open internet rule of 2015 (commonly called as Net Neutrality) was much controversial and is probably going to be rolled back or ignored under the administration of Donald Trump. With just few days left for the existing FCC leadership, they have decided to conclude that the decision of AT&T not to charge their wireless users for accessing DirecTV Now streaming is probably against regulations and may harm consumers and competition.

The Net Neutrality rule does not take a fixed position in the case of “zero rated” or sponsored programs in which someone other than the end user pay for some of the data that is consumed by the user every month. FCC has acknowledged that there can be pro-consumer benefits for some of the programs and so they have decided to have a case-by-case approach in finding out if a specific zero rated offering comply with the neutrality regulations.

Previously, the head of Wireless Bureau of FCC sent letters to Verizon and AT&T to express his concerns on Verizon’s FreeBee Data 360 sponsored data program and DirecTV Now services. The FreeBee Data 360 program from Verizon allows content businesses to pay for some of the wireless that is consumed by the users on the Verizon network.

As per the recent reports from FCC, AT&T offered no new information to support their claims that they offer zero-rated data to third parties at the same rate that they charge DirecTV. In December, FCC had pointed out that there is a difference between money paid by the third party providers and the money that is just transferred from one asset of AT&T to another, even though the amounts are same.

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“Unaffiliated mobile video service providers must pay a significant, clearly identifiable amount of money for the sponsored data needed to offer streaming video programming to AT&T Mobility’s subscribers on a zero-rated basis,” reads the report.

“By comparison to AT&T, which need not incur a comparable out-of-pocket expenditure to offer DIRECTV Now on a zero-rated basis. Rather, any imputed ‘charges’ that DIRECTV ‘pays’ AT&T Mobility for sponsored data, even if formally recorded on the corporate books as internal transfer payments, would result in no net expenditure at the holding company level,” FCC added.

The wireless bureau concludes from the information that they got from AT&T that, “Such arrangements likely obstruct competition for video programming services delivered over mobile Internet platforms and harm consumers by inhibiting unaffiliated edge providers’ ability to provide such service to AT&T’s wireless subscribers.”

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