Senate Democrats Want FCC To Crack Down On 'Zero-Rating' Schemes

Democratic lawmakers are calling on the Federal Communications Commission to crack down on Internet service providers that exempt certain types of data from subscribers' monthly caps.

"Without proper oversight and enforcement action, zero-rating can discriminate against certain services, potentially distorting competition, stifling innovation and hampering user choice and free speech," Sens. Ed Markey (Massachusetts), Ron Wyden (Oregon), Al Franken (Minnesota), Bernie Sanders (Vermont), Elizabeth Warren (Massachusetts), Richard Blumenthal (Connecticut) and Tammy Baldwin (Wisconsin) write today in a letter to FCC Chairman Tom Wheeler. "When ISPs, not the consumer, choose online winners and losers, the very core tenants of net neutrality could be disrupted."

In the last several years, a growing number of broadband providers have started "zero-rating" data from specified companies -- meaning that those companies' video streams aren't counted toward subscribers' caps.

AT&T pioneered the practice in 2013, when it allowed companies to pay for their data to be exempted from consumers' monthly caps. Since then other Internet service providers -- both wireless and wireline -- have launched their own versions of zero-rating services.

Comcast, for instance, now offers Stream, a $15-a-month service that lets broadband-only subscribers use their Web connections to access many of the same programs that cable customers can watch. Material accessed through Stream is exempt from Comcast's data caps. (The company currently imposes caps of 1 TB per month in many parts of the country; users who exceed the cap are charged additional fees.)

AT&T recently said it plans to zero-rate video offered through DirecTV's app. The FCC said last week that doing so may violate net neutrality rules. Those 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. Carriers could potentially violate that last prohibition by excluding certain material from data caps, but the FCC has said it will take a case-by-case approach to the question.

The lawmakers are urging the FCC to definitively state that broadband providers violate net neutrality by zero-rating their own content, or unaffiliated content, but excluding competitors.

Markey and the other lawmakers also argue that ISPs shouldn't be allowed to charge fees to companies in exchange for zero-rating their content. "Paid zero-rating gives established, well-funded applications and services an unfair competitive advantage over start-ups, small businesses, and anyone else seeking to share their creations with the world," the lawmakers write.

But the lawmakers suggest that zero-rating is acceptable, provided that it is carried out in an "application agnostic" way.

"Application agnostic plans in which ISPs do not require payment from zero-rated applications or favor specific content distributors should be reviewed, but do not necessarily raise major Open Internet concerns," they write. "This includes zero-rating of low bandwidth applications or zero-rating at certain times of day."

It's not yet known whether the FCC will take a position on zero-rating practices before the end of the year. Earlier this week, 
Republicans on Capitol Hill asked the FCC to hold off on "controversial" decisions until the Trump administration takes over. After receiving that letter, the FCC deleted many items that had been on the agenda for this month's open meeting, which took place on Thursday.

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