FCC: AT&T, Ver­i­zon shouldn’t ex­empt own apps from data caps

Kuwait Times - - TECHNOLOGY -

US 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.

For ex­am­ple, the FCC es­ti­mates that a video ser­vice provider would have to pay AT&T $16 a month for a cus­tomer who streamed video for 10 min­utes a day with­out us­ing up his data on the cel­lu­lar net­work, or $47 a month for a user watch­ing a half-hour a day.

Adding in those costs makes it dif­fi­cult for a ri­val to com­pete on price with AT&T’s new on­line TV app, DirecTV Now, whose cheap­est bun­dle costs con­sumers $35 a month, wrote Jon Wilkins, the head of the FCC’s wire­less bureau. Com­pet­ing video providers would also be at a dis­ad­van­tage if they didn’t zero-rate their ser­vices at all, as con­sumers could need to pay for more data to watch.

AT&T Inc. said Fri­day that ex­empt­ing apps like DirecTV Now 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. Ver­i­zon lets wire­less cus­tomers watch its go90 video app and NFL foot­ball, for which it has ex­clu­sive mo­bile rights, with­out us­ing up data.

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 and 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 ze­rorat­ing 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.

—AP

PHILADEL­PHIA: In this Oct. 17, 2012, photo, an AT&T logo is dis­played on an AT&T Wire­less re­tail store front.

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