FCC Republicans try to protect AT&T and Verizon in net neutrality case

With Trump about to take over, FCC pursues controversial zero-rating probe.

Jon Brodkin

Mike Mozart

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The two Republican members of the Federal Communications Commission criticized the FCC for investigating AT&T and Verizon in a net neutrality case centering on data cap exemptions. Any action taken now will be overturned under President Donald Trump, they promised.

The FCC's Wireless Telecommunications Bureau last week said it reached a preliminary conclusion that AT&T is violating net neutrality rules by using data cap exemptions (or "zero-rating") to favor DirecTV video on its mobile network. The FCC also kicked off a similar examination of Verizon's data cap exemptions. AT&T and Verizon are exempting their own video services from mobile data caps while charging other companies for the same zero-rating treatment.

But Republicans, who opposed the net neutrality rules and will gain the FCC majority from Democrats after the inauguration of President-elect Donald Trump, are trying to protect AT&T and Verizon from FCC action.

"Chairman [Tom] Wheeler launched yet another broadside against free data for consumers, notwithstanding the objections of Republican commissioners," Republican Commissioner Ajit Pai said Friday. "This end-run around Congress’s clear instruction is sad—and pointless. For any unilateral action taken by the Wireless Telecommunications Bureau at the Chairman’s direction in the next 49 days can quickly be undone by that same bureau after January 20, 2017."

Sen. John Thune (R-S.D.), chairman of the Senate Commerce Committee, recently urged Wheeler to "avoid directing its attention and resources in the coming months to complex, partisan, or otherwise controversial items that the new Congress and new Administration will have an interest in reviewing." Other Republicans in Congress said the FCC should focus "only on matters that require action under the law" and an ongoing spectrum auction.

Wheeler agreed to halt any controversial rulemakings in his remaining time as chair, but he did not say that he would stop investigating potential violations of current rules. The FCC's Republicans want Wheeler to hold off on both rulemakings and the investigation of AT&T and Verizon.

"In light of the multiple directives we have received from Congress to avoid directing attention and resources to complex or controversial matters, the staff of the Wireless Telecommunications Bureau is inappropriately pressing forward and escalating its investigation of certain providers’ zero-rated video services," Republican Commissioner Michael O'Rielly said. "It would be difficult to come up with a better example of a complex, controversial policy at the current Commission than this attempt to intimidate providers in order to shut down popular offerings to consumers." Any action taken now "can be reviewed and potentially reversed within weeks," he said.

The Republicans aren't necessarily opposed to any enforcement action taken in Wheeler's last couple months. The FCC on Friday also proposed a fine against NECC Telecom for allegedly charging excessive and unlawful universal service fees to customers; Pai and O'Rielly haven't publicly objected to that action.

But whether zero-rating schemes should be outlawed has been controversial, even among Democrats. The FCC's net neutrality rules don't ban zero-rating, but they let the commission decide on a case-by-case basis whether a particular implementation harms consumers or competitors.

Some small ISPs are worried about data cap exemptions offered by large providers. AT&T's proposed purchase of Time Warner, the owner of HBO, CNN, and Warner Bros., would help AT&T expand zero-rating of its own content and further disadvantage small ISPs, according to the Wireless Internet Service Providers Association (WISPA).

"AT&T has recently begun to 'zero-rate' (i.e. exempt from data caps) its DirecTV content, and it has stated its intention to expand zero-rating to the Time Warner content it would obtain through this proposed merger," said WISPA, which represents hundreds of small ISPs. "Allowing any ISP to favor certain content has a direct, harmful impact on thousands of small, competitive ISPs that do not own content and lack the ability to negotiate fair, reasonable and non-discriminatory access to content."