The FCC Has Closed Its Investigation Into ‘Zero-Rating’ Data Policies

At the beginning of December, the FCC said that AT&T and Verizon were violating net neutrality rules with “zero-rating” data policies.

Jon Brodkin, Ars Technica:

With Sponsored Data, AT&T charges other companies for the right to bypass customers’ data caps on AT&T’s wireless network. At the time same, AT&T lets its subsidiary DirecTV stream on the mobile network without counting against data caps. DirecTV technically pays AT&T for the privilege, but the money is just shifting hands from one part of AT&T to another. AT&T is using DirecTV’s data cap exemption to market the new DirecTV Now streaming service.


The “primary participant” in Verizon’s zero-rated data program is Go90, a video service offered by Verizon itself, the FCC said. Ars wrote about Verizon’s treatment of Go90 compared to competing video services 10 months ago.

Seems pretty clear-cut, right? AT&T and Verizon both advantaged their own services by not counting data consumption used by those services, thereby putting competitors at a disadvantage.

Turns out that the new FCC Chairman Ajit Pai didn’t like this investigation at all.

Brodkin reports:

The FCC’s Wireless Telecommunications Bureau sent letters to AT&T, Verizon, and T-Mobile USA notifying the carriers “that the Bureau has closed this inquiry. Any conclusions, preliminary or otherwise, expressed during the course of the inquiry will have no legal or other meaning or effect going forward.” The FCC’s Wireline Competition Bureau also sent a letter to Comcast closing an inquiry into the company’s Stream TV cable service, which does not count against data caps.

The FCC issued an order that “sets aside and rescinds” the Wheeler-era report on zero-rating. All “guidance, determinations, and conclusions” from that report are rescinded, and it will have no legal bearing on FCC proceedings going forward, the order said.

You would be shocked — shocked, I tell you — to know that Chairman Pai used to be the associate general counsel for Verizon. As a result of this decision, the web is now, more than ever, a “pay to play” environment. More power than ever will be in the hands of the few biggest players on the web: large tech companies and American ISPs.