More than 50 advocacy groups today asked the Federal Communications Commission to stop zero-rating systems implemented by Comcast, AT&T, Verizon Wireless, and T-Mobile USA.
Zero-rating plans, which exempt certain content from monthly data caps, “enable ISPs to pick winners and losers online or create new tolls for websites and applications,” said a letter sent to FCC Chairman Tom Wheeler. “As a result, they present a serious threat to the Open Internet: they distort competition, thwart innovation, threaten free speech, and restrict consumer choice—all harms the rules were meant to prevent.”
Letter signers included the Electronic Frontier Foundation, Free Press, MoveOn.org, the Institute for Local Self-Reliance, the New America’s Open Technology Institute, and the Rural Broadband Policy Group.
The FCC is examining zero-rating but hasn’t taken any action yet. The commission’s net neutrality rules don’t specifically ban zero-rating, but they allow the FCC to stop implementations on a case-by-case basis if such ratings harm consumers or online content providers.
The ISPs have taken slightly different approaches to zero-rating. Comcast exempts its own streaming TV service from its monthly data cap on cable Internet, but the company says the video product is “an IP cable service” that isn’t delivered over the Internet and thus isn’t subject to the net neutrality rules.
The other ISPs exempt third-party content from mobile caps. AT&T’s Sponsored Data program charges third parties, such as advertisers, for the right to deliver data without counting against consumers’ mobile data limits. Verizon Wireless also lets companies pay for data cap exemptions while zero rating its own “Go90″ video service and certain AOL content.
T-Mobile doesn’t charge for data cap exemptions, but it exempts certain music and video services from data limits and throttles video unless customers opt out of the video zero-rating.
The consumer groups’ letter took on each of the carriers’ zero-rating systems.
Net neutrality rules “say that ISPs can’t charge websites and applications for access to a fast lane,” the letter said. “Yet, AT&T and Verizon created a new toll by instead charging websites and applications for exemption from customers’ data caps. These ‘sponsored data’ plans motivate ISPs to keep data caps low in order to create pressure for companies to pay to circumvent the caps.”
Comcast, the letter said, “directly favors its own content over competitors’.” Exempting its own streaming TV service from caps “while counting all competing services toward those caps… is a textbook case of an ISP abusing its power for its own competitive advantage,” the groups wrote.
Though T-Mobile doesn’t charge companies for data cap exemptions, video providers must meet “substantial—and proprietary—technical requirements” to qualify for T-Mobile’s video zero-rating, the letter said. “These requirements make it difficult for many startups, small players, and noncommercial speakers to participate in the program.”
“In every case, websites that have not negotiated with a particular ISP now face new barriers to reaching that ISP’s Internet users,” the letter said. “These practices distort competition, stifle innovation, limit user choice, harm free speech, and drive up prices. In their current iterations, each of these plans run afoul of both the spirit of net neutrality and of the Open Internet rules.”
The groups claimed that damage from zero-rating disproportionately hurt poor people and minorities, because they are more likely to rely on mobile networks for their primary access to the Internet.
The letter concluded by urging the FCC to “fulfill its mandate to protect Internet users and enforce its Open Internet rules.”
FCC staff recently met with carriers to discuss their zero-rating implementations. With broadband providers’ lawsuit against the FCC’s net neutrality rules still pending, the FCC could be waiting for a federal appeals court decision before making any major moves.
“Commission staff continues to learn about the new offerings, and meetings with stakeholders are ongoing,” an FCC spokesperson told Ars today.
CTIA, which represents AT&T, Verizon, T-Mobile, and other mobile carriers, defended the zero-rating programs. “Free data services are pro-consumer, innovative offerings that we should all embrace,” the group said in a statement issued today. “It should also come as no surprise that mobile consumers love free data so they can watch videos, listen to music or use the Internet without charges to their monthly data allowance. The FCC should reject efforts to take away from consumers these free data services and options.”