Commentary

FCC Questions T-Mobile, Comcast And AT&T About Data Cap Exemptions

The Federal Communications Commission is asking T-Mobile, Comcast and AT&T for more information about their decisions to exempt some material from subscribers' data caps.

"We want to ensure that we have all the facts to understand how this service relates to the Commission's goal of maintaining a free and open Internet while incentivizing investment and innovation from all sources," Roger C. Sherman, chief of the FCC's Wireless Telecommunication Bureau, writes in separate letters to the three carriers.

The move has already drawn public opposition from Commissioner Ajit Pai, who voted against the net neutrality rules. "The era of permissionless innovation is over: FCC investigating companies' new broadband services," Pai tweeted this afternoon.

Two years ago, AT&T pioneered "toll-free data" by allowing partner companies to pay for their data to be exempted from consumers' monthly caps. Last week, Verizon announced that it too would launch a toll-free data program.

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T-Mobile recently rolled out its version of toll-free data with "BingeOn," which lets consumers stream as much data as they like from Netflix, HBO Go, Hulu and 20 other video providers. But there's a catch: T-Mobile is degrading the quality of all video on its network, unless users opt out of BingeOn.

That aspect of T-Mobile's initiative drew attention this week, when advocate Marvin Ammori accused the carrier of running afoul of net neutrality regulations. "Degrading video quality this way violates the FCC’s no-throttling part of the net neutrality rule, which forbids reducing the quality of an application or an entire class of applications," he wrote.

In November, Comcast unveiled its own zero-rating initiative, the $15-a-month Stream. That service, which already launched in Boston and Chicago, enables Comcast's broadband-only subscribers to use their Web connections to access many of the same programs that cable customers can watch. The lineup includes all broadcast channels and HBO.

In addition to watching shows in real-time while at home, Stream subscribers can also access a cloud-based DVR, which lets them watch recorded shows on any device, and on any broadband provider's network.

Importantly, videos watched through Stream will be exempt from the company's usage-based billing tests. Some Comcast subscribers in test markets can only consume 300 GB of data a month before they're charged overages of $10 per 50 GB.

Comcast's critics say that it shouldn't exclude its own services from users' data caps, while counting videos watched through Sling TV, Amazon or other companies.

The net neutrality rules, which took effect earlier this year, prohibit broadband providers from blocking or degrading service and from creating online fast lanes. The order also bans Internet service providers from engaging in conduct that interferes with people's ability to access Web content.

Zero-rating could potentially violate that prohibition depending on the circumstances; the FCC has said it intends to take a case-by-case approach the question. The agency has asked all three companies to make staff available for discussions by Jan. 15.

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