Nation’s Regulators Issue Warning To AT&T, Verizon Over Zero-Rating Policy
U.S. regulators have singled out both Verizon and AT&T for allowing their video apps to be used without hitting their data caps on their customers’ phones and tablets.
This may not change anything in the way the wireless carriers work, but agency leaders that incoming president Donald Trump appoints could look favorably on these practices.
The Federal Communications Commission made these biggest wireless carrier companies aware that how they handle the “Zero Rating” practice could hurt consumers and competition. In November, the FCC had sent a warning to AT&T about its practice, and AT&T’s response back didn’t ease their concerns.
Services like Netflix and Hulu can pay AT&T and Verizon, allowing people to use the apps without taking a hit to their data. The FCC said this hurts the streaming services market because it makes it costlier for Internet companies to compete with the carriers’ owned video services.
The FCC noted a video service provider would need to pay AT&T $16 per month for customers to stream videos 10 minutes a day without using the cellular network’s data. That would be $47 a month for users watching video for 30 minutes a day.
By adding in these costs, it would make it hard for rivals to compete with the new online TV App from AT&T – DirecTV Now – that consumers can get for $35 a month. Consumers would need to purchase more data to watch video providers that didn’t zero-rate their services.
The FCC warnings come in the last few days of the Obama administration, which have passed procedures that would keep cable companies from playing preferences with the Internet services. The incoming administration is anticipated to enforcement more lenient measures.
The FCC hasn’t made a final ruling on whether or not these zero-rating practices were a real issue.
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