• by Wendy Davis , Staff Writer @wendyndavis, March 28, 2016

Internet service providers are undermining "the spirit and the text" of net neutrality rules by rolling out new so-called zero-rating services, which exempt certain material from consumers' monthly data caps, a coalition of advocacy groups says in a new letter to the Federal Communications Commission.

Data-cap exemptions "enable ISPs to pick winners and losers online or create new tolls for Web sites and applications," the groups argue. "As a result, they present a serious threat to the Open Internet: they distort competition, thwart innovation, threaten free speech, and restrict consumer choice -- all harms the rules were meant to prevent."

The letter, signed by more than 50 organizations, takes aim at the data-cap policies of four broadband carriers -- Comcast, Verizon, AT&T and T-Mobile. Those companies all offer plans that limit the amount of data subscribers can use in a given month, but don't count all data equally when calculating the total amount consumed.

In Comcast's case, the advocates focus on Stream -- a new $15-a-month service that gives broadband-only subscribers access many of the same programs that cable customers can watch. Videos watched through Stream are exempt from the company's hugely unpopular usage-based billing, which now affects 15% of Comcast's customers. People subject to usage-based billing can only consume 300 GB of data a month before they're charged overages of $10 per 50 GB. (Subscribers in some markets can pay an extra 30 or $35 a month for unlimited data.)

Comcast has argued that Stream doesn't violate net neutrality principles for several reasons, including that it's a "cable" service, and therefore not subject to net neutrality rules.

The letter also addresses T-Mobile's relatively new Binge On, as well as "sponsored data" offerings from AT&T and Verizon.

BingeOn now exempts video streams offered by around 50 companies from data caps, but also throttles all video to 1.5 Mbps. Binge On is activated by default, but users can always turn it off.

AT&T and Verizon zero-rate data from companies that pay to sponsor it, and in Verizon's case, from its own video service, go90.

"These practices distort competition, stifle innovation, limit user choice, harm free speech, and drive up prices," the groups write. Organizations signing the letter include the Center for Media Justice, Daily Kos, Electronic Frontier Foundation and Free Press. "In their current iterations, each of these plans run afoul of both the spirit of net neutrality and of the Open Internet rules."

The letter comes several weeks after the advocacy group Public Knowledge filed a complaint with the FCC about Comcast's Stream. Public Knowledge -- which wasn't among the signatories to today's letter -- asked the FCC to order Comcast to either stop capping broadband data or to stop zero-rating Stream.

At the same time, criticism of T-Mobile's Binge On appears to have decreased in recent weeks, as more companies have joined. At first, Binge On was only available to around two dozen companies that streamed video. But since then, the program has grown to include around 50 companies -- including Google, which was excluded at launch. Google initially was among the loudest critics of Binge On, but now says it supports T-Mobile's initiative.

The CTIA chimed in today that free data services are "pro-consumer, innovative offerings that we should all embrace." That organization urged the FCC to "reject efforts to take away from consumers these free data services and options.”

Questions surrounding zero-rating systems have been in the news for months, but it's still not clear whether the FCC views those initiatives as problematic. The net neutrality rules prohibit broadband providers from blocking or degrading service and from creating online fast lanes. The regulations also broadly ban 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 advocates who wrote to the FCC today predict that zero-rating plans "will continue to expand," unless the agency takes action.

"We urge the FCC to respond to the proliferation of these plans, fulfill its mandate to protect Internet users, and enforce its Open Internet rules," the groups write.