FCC says AT&T, Verizon are violating net neutrality with sponsored data plans

This week the FCC sent letters to both AT&T and Verizon, stating that zero-rated data — plans and services that don't count against users' monthly allotment — is a violation of net neutrality rules. For AT&T, this applies to their new DirecTV Now streaming video service, and for Verizon it's their own Go90 video service. The FCC's wireless communications chief Jon Wilkins wrote that the telecoms' practices "inhibit competition, harm consumers, and interfere with the 'virtuous cycle' needed to assure the continuing benefits of the Open Internet."

Since AT&T owns DirecTV, it now allows wireless subscribers to use the new DirecTV Now streaming service without the data counting against monthly caps. The same goes for the standard DirecTV mobile app when used on AT&T's mobile network. The FCC points out that this is an inherent benefit for AT&T's own video service, and puts rival service at a distinct disadvantage.

For Verizon, it's the carrier's "FreeBee Data 360" program, which gives free data usage for its own Go90 video service. Any providers that don't offer their content on Go90 are left out of the zero-rating benefits, and thus can't be accessed by users without a cost premium.

In both cases, unaffiliated third parties must either pay extra to the carriers in order to compete on equal footing with their own in-house services, or suffer the disadvantage of users being charged for data when accessing their content. Since users frequently gravitate towards content and services that don't count against data caps, the latter option is clearly intended to be anti-competitive.

The FCC has asked that both carrier respond to the letter and answer a number of questions by December 15th. Spokespeople for AT&T and Verizon have issued statements saying that they will respond to the inquiry, but firmly believe that their services do not violate net neutrality rules, and are loved by consumers because they save them money.

SOURCE Ars Technica, The Verge