Zero-Rating Report Gets Zero From Industry Groups

Say it ignores pro-consumer benefits of sponsored data plans

Industry groups and others were pushing back on the FCC's advisory that AT&T and Verizon sponsored data plans were anticompetitive and likely a violation of the Open Internet order.

That FCC advice came in a Wireless Bureau report following a year-plus inquiry/investigation and a letter to concerned Senate Democrats from FCC chairman Tom Wheeler.

RELATED: Walden, Blackburn Hammer FCC Over Zero Rating Report

“Consumers have repeatedly expressed their support for free data," said Open Internet interim chair Diane Smith. "The so-called ‘guidance’ issued today by the staff of the Wireless Bureau is not about consumers. It is an effort to pick winners and losers based on the Washington-knows-best mentality. Rather than tipping the scales toward preferred business models, the FCC should let consumers decide for themselves which models, and free data, they prefer.”

The Information Technology & Innovation Foundation (ITIF) suggested the FCC was minimizing the benefits of data subsidies to consumers and competition

"Let’s hope the next FCC recognizes the benefit of genuinely new business models bringing additional competition in video distribution," said ITIF policy analyst Doug Brake. "We should not discourage models that by any measure increase the options to access Internet services, functionally increase video competition, and lower expenses for consumers."

Senior Republican and likely interim chair Ajit Pai signaled the report would not impact the next FCC's policymaking.

Adonis Hoffman, chairman of Business in the Public Interest and a former top FCC official, said the FCC advisory was confusing. "If the open internet order is all about competition, and consumers like the competitive data offerings by the two leading providers, what is the problem?  While the original intent of the open internet rule may have been noble, its enforcement in this case is anything but.  Sadly, this may become the Chairman's Dunkirk."

The FCC report said the agency does not oppose zero rating per se, but as it was applied in the two plans at issue, AT&T's DirecTV Now and Verizon's FreeBee 360. It was reviewing them under the Open Internet order's general-conduct standard, which is a way to review conduct that does not violate the three FCC rules against blocking, throttling and paid prioritization, but may impede the free and competitive flow of online info.

Both companies stood by their plans as pro-consumer and pro-competition.