The FCC has formally informed both AT&T and Verizon that its “zero-rated” programs are violations of net neutrality and they’re not fans. But the CEOs aren’t sweating it—and they’re probably, sadly, right to do so.
This week Jon Wilkins, the commission’s chief of wireless telecommunications, sent separate letters to the heads of Verizon and AT&T highlighting their concerns about recent promotions from the companies. Namely that Verizon’s “FreeBee Data 360” and AT&T’s Sponsored Data program both create unfair playing fields that leave the FCC “very concerned.”
It’s a firmer stance than we’re accustomed to seeing from the commission, who have historically been a bit reticent about coming down decisively on the practice of ISPs allowing some services to not count towards a data cap. But in both letters, Wilkins expresses concern that programs like these “denies unaffiliated third parties the same ability to compete over AT&T’s network on reasonable terms,” and leaves them facing “a significant competitive disadvantage in trying to serve Verizon’s customer base without zero-rating.”
AT&T and Verizon both responded to Engadget, noting that these are very popular programs that are good for customers and consistent with current rules. And normally it’d seem like we’re headed for a showdown, as the FCC moves the wheel towards regulating zero-rating. Like anything in net neutrality it’d be a close fight, with the Republican members of the commission already sticking up for the ISPs. But this time it’s different.
After all, this time we’re almost a month out from a new president, which starts the clock on when a new acting FCC chairman takes over for Tom Wheeler. And as Michael Fitch writes for the Beyond Telecom Law Blog, the current FCC modus operandi has been a 3-2 vote in favor of net neutrality. That’s not only a pretty slim majority to slip away, it’s historically unprecedented:
In prior administrations, most telecommunications policy-making at the FCC has been largely non-partisan. Policy differences between Democratic and Republican Commissioners were usually more differences of emphasis or priorities rather than on fundamentals, with both parties generally supporting a significant amount of deregulation and changes to introduce and support new technologies and services.
Historically, there has been a high degree of comity among the FCC Commissioners across party lines most of the time. Typically, negotiations between and among Commissioners’ offices tried to eliminate or reduce as much as possible strong disagreements on decisions. There were exceptions of course, but they were exceptions not the normal course of business month in and month out.
The current FCC has operated very differently. At most of its monthly public meetings, major FCC decisions have been adopted by party-line 3-2 votes. The divisions have been marked by strong dissents that attack both the substance and process of the FCC decision-making. Moreover, there has been the same kind of unyielding disagreement between the majority Democratic Commissioners and the Republican Chairs of Congressional Committees and Subcommittees responsible for telecommunications in the House and Senate.
It’s possible that after eight years of highly politicized decisions from the commission, partisan voting has just become the new status quo. As Fitch notes, that’s unlikely to sustainably advance the interests of either side. Many, for instance, see the next chapter of the FCC as one that largely outdoes (or has the power to undo) the work of the past eight years of regulation.
As Davis Wright Tremaine’s Open Internet Law Advisor notes, the stars and political power has aligned for conservatives to walk back net neutrality:
At the very least there will be a strong de-regulatory push on tech and telecom policy by a Trump administration and FCC. Big industry players and the Republican minority on the FCC have long complained that the Obama administration and FCC have been so regulation-happy that they have hindered broadband and other infrastructure investment.
While nothing moves quickly in Washington and there will be strong resistance from Democrats, public interest groups and some industry players, one highly likely target of the next Republican Congress and a Trump FCC will be the Open Internet Order (also known as “net neutrality”), which Chairman Tom Wheeler and the Democratic-majority FCC pushed through over the bitter opposition of the two Republican FCC commissioners and the Republican congressional majority last year…If they are reversed, either by the new Congress or the new FCC, it could free ISPs from FCC regulation, including a new system of Internet privacy and data security regulation that the Democratic FCC enacted just weeks before the election.
Which is likely why AT&T, Verizon, and their telecommunication brethern aren’t quaking in their boots at the FCC’s strong words. Whether it’s by the FCC themselves or legislation through Congress, net neutrality laws—as they stand now—don’t seem long for this world. All three of Trump’s transition officials have publicly opposed the rules, leaving AT&T CEO Randall Stephenson not just confident in the new world of net neutrality enforcement but of the Time Warner merger AT&T has been aiming for.
The FCC is still due to make a final finding on AT&T and Verizon’s zero-rating programs, but it’s possible that before too long those will be worth just about zero.