The Federal Communications Commission staff has finally determined that AT&T and Verizon are likely violating net neutrality rules by offering their own video services without data charges.
However, in taking more than a year to weigh in, the agency has likely lost its chance to rein in the practice. President-elect Donald Trump has clearly indicated he opposes net neutrality as a whole, let alone this specific issue of zero-rating.
The staff report released Wednesday finds that both AT&T and DirecTV are using zero-rating practices to favor their own video services over those provided by rivals. AT&T, for example, offers subscribers to its own DirecTV service the ability to watch video without it counting against a customer’s data limits, while Verizon takes a similar approach with its Go90 service.
Both companies have argued that they are taking advantage of sponsored data programs also offered to other video providers. As we pointed out last year, that argument is pretty weak.
AT&T and Verizon can zero-rate their own video services without real money changing hands. Another video provider would have to pay AT&T and Verizon to make their video services available at no charge to customers.
“We have serious concerns that AT&T Mobility’s Sponsored Data program presents competitive problems and, to date, nothing in AT&T responses to the Bureau’s requests for information has addressed our concerns,” the FCC staff said in the report. “Based on the information gathered to date, we believe there is a substantial possibility that some of AT&T’s practices may violate the General Conduct Rule.”
However, AT&T and Verizon don’t seem too worried by the staff report, given Trump’s arrival.
“The staff’s positions are duly noted,” Verizon said in a statement. “We don’t agree with their view on free data and we don’t think our customers do either. Hopefully the next FCC will take into account the views of our customers who greatly benefit from watching professional football, soccer, basketball and other great content on go90 free of data charges.”
AT&T said “it remains unclear why the Wireless Bureau continues to question the value of giving consumers the ability to watch video without incurring any data charges.”
The commission report notes that it doesn’t believe zero-rating is inherently bad or necessarily a violation of FCC rules. The same staff report concluded that two other programs, including T-Mobile’s Binge On, don’t harm consumers. T-Mobile offers its customers the ability to stream a range of services, none of them from T-Mobile, for free as long as they agree to view them in standard, rather than high-definition, format.
Ajit Pai, one of two Republicans on the commission, blasted the report.
“It is disappointing that the FCC’s current leadership has yet again chosen to spend its last days in office the same way it spent the last few years — cutting corners on process, keeping fellow Commissioners in the dark, and pursuing partisan, political agendas that only harm investment and innovation,” he said. “Fortunately, I am confident that this latest regulatory spasm will not have any impact on the Commission’s policymaking or enforcement activities following next week’s inauguration.”
This article originally appeared on Recode.net.