Free Data Sounds Great, but the FCC Has Questions

Federal regulators are questioning three major Internet providers about programs that exempt certain services from monthly data caps.

Digital-rights advocates have argued that the policies of Comcast, AT&T, and T-Mobile might violate the Federal Communications Commission’s net-neutrality regulations, which require Internet providers to treat all traffic equally.

While the policies mean customers can watch more videos without triggering pricey overage fees, net-neutrality advocates warn they could tilt the Internet in favor of the biggest companies. Small start-up services might have a harder time qualifying for favorable treatment from Internet providers, the advocates argue.

Speaking to reporters Thursday, FCC Chairman Tom Wheeler emphasized that the commission is not conducting a formal investigation of the practices. Instead, he said, he is asking the companies to “come in and have a discussion with us about some of the innovative things that they are doing.”

T-Mobile’s Binge On program, which it announced last month, allows customers on certain qualifying data plans to stream Netflix, Hulu, HBO, ESPN, and other video services without counting it towards their monthly data usage. Any video service that complies with certain technical requirements can participate in the program, T-Mobile says.

AT&T has a similar “sponsored data” program that allows other companies to pay to exempt their services from data caps. And Comcast recently said it won’t count its own video-streaming service, Stream TV, towards its customers’ monthly data usage.

The head of the FCC’s wireless bureau sent letters Wednesday to AT&T and T-Mobile asking for more information on the programs, while the head of the wireline bureau sent a letter to Comcast.

“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 innovation and investment from all sources,” the FCC officials wrote in each letter.

The net-neutrality rules, which the FCC enacted earlier this year, don’t explicitly ban so-called “zero-rating” programs that exempt services from data caps. But the commission promised to scrutinize the policies under a broad provision that bars Internet providers from “unreasonably interfering” with the ability of Internet users to access the content of their choice.

In statements Thursday, the companies promised to cooperate with the FCC, but insisted their policies don’t violate any rules. “Our Stream TV service does not go over the public Internet—it is a cable service that only works in the customer's home. It is not a so-called 'zero-rated' service,” Comcast said.

T-Mobile said it supports net neutrality and argued that its Binge On program “provides both great customer choice and industry innovation that encourages competition.” AT&T said it remains “committed to innovation without permission and hope[s] the FCC is too.”

The two Republican FCC commissioners, Ajit Pai and Michael O’Rielly, criticized the letters, arguing that the FCC is intimidating Internet providers from offering creative pricing plans that are good for consumers. “The era of permissionless innovation is over,” Pai claimed on Twitter.