FCC Refers Free Data Plan Concerns to FTC

Tells senators FCC has never concluded they ran afoul of net neutrality
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FTC building, "Man Controlling Trade" sculpture

Talk to the Federal Trade Commission. That was FCC chair Ajit Pai's response to a trio of Democratic House members seeking an FCC investigation into wireless providers free data plans.

In a letter to Sens. Ed Markey (D-Mass.), Richard Blumenthal (D-Conn.) and Ron Wyden (D-Ore.), Pai said that they appeared to be referring to "the free-data programs that certain wireless providers offer—often with respect to smartphone-quality video services—that have been available since T-Mobile launched its Binge On service in 2015," which the senators referenced by reference to an article about that service.

Pai pointed out that the FCC has never concluded such services violated net neutrality rules, but that, nonetheless, he was referring the request to the Federal Trade Commission, which, he said, " has long policed the Internet economy for potentially deceptive and unfair practices and has the responsibility for doing so today."

The FTC inherited oversight of ISPs with the FCC's reclassification of them as information services no longer subject to common carrier regs and elimination of the FCC rules prohibiting blocking, throttling, and paid prioritization, plus a general conduct standard to get at conduct unbecoming an open internet but not falling under the rules.

The senators had asked the FCC back in February to investigate allegations that the major wireless carriers are throttling and prioritizing internet traffic, an allegation those carriers say is based on a misconception about what they are doing and why.

The senators pointed to a recent Wehe study that alleged the major carriers—AT&T, Verizon, T-Mobile and Sprint—were throttling popular video apps like Netflix, Amazon Prime and YouTube and that customers were often unaware of the practice.

The Wehe test found "throttling" on YouTube, Netflix and Amazon Prime video services. Sprint said it offers consumers various plans at various performance levels at different price points, including the option of standard rather than HD video or data allocations for specialized uses like peer-to-peer file sharing or WiFi hotspots, uses that will see reduced speeds after exceeding those monthly allotments. It said those are content neutral and customers are informed of the choices.

The senators had written the carriers back in November saying they thought they were not properly informing their customers and third-party video providers—like Netflix, say–about their "throttling" practices and asking for explanations.

Related: Dems Press Telcoms on Throttling Allegations

In the wake of the FCC's deregulation of internet access, those carriers have said they don't block or throttle, a pledge that the Federal Trade Commission could hold them to, as well as the FCC if they violated its transparency requirement that carriers tell their customers what they are doing now that the rules are gone prohibiting blocking, throttling or paid prioritization.

Essentially the carriers' response to the senators was that whatever they were doing was disclosed and fell under either reasonable management or consumer choice over how they wanted their service delivered, a distinction the Wehe test was not sensitive enough to recognize, they said, or, as T-Mobile put it, "reflect(s) some fundamental misunderstandings regarding the operation of wireless networks.

In its response, AT&T said the Wehe study was not an accurate measure since it gives customers a chance to opt for standard-definition video—a difference AT&T says is pretty much imperceptible on most handheld devices and a choice (its Stream Saver option), which it says the study misrepresents as a net neutrality issue, that saves bandwidth costs and would allow customers to stream more video.

Verizon told the senators that it does not throttle or "inappropriately prioritize" video traffic, or other traffic for that matter, based on content, application or service, and echoed AT&T's point about giving customers the option of managing their traffic.

T-Mobile told the senators that it does not "block, impair, or degrade lawful internet traffic, nor does it improperly favor or disfavor any type of traffic vis-à-vis other types of traffic."

Markey and company were not happy with those answers, prompting their February call for the FCC to step in and investigate whether the carriers had, indeed, violated the FCC transparency rules. They wanted to know by Feb. 27 whether Pai would investigate or not. Pai's letter providing that answer was dated March 29.

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