US telecommunications regulator closes ‘sponsored data’ probe

Net neutrality rules imposed by the FCC in 2015 require broadband providers to treat all data equally.“These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace,” new FCC chairman Ajit Pai said in a statement.

The US telecommunications regulator said it was closing inquiries into sponsored data programs and TV services offered by AT&T Inc, Verizon Communications Inc, Comcast Corp, T-Mobile USA Inc without taking any action. Under the Obama administration, the Federal Communications Commission had sent letters raising concerns about whether some data practices by AT&T and Verizon violated net neutrality rules. The FCC had also sent letters to Comcast about its “Stream TV” service and to T-Mobile about its “Binge On” service in 2015.
Millions of mobile phone users benefit from free data video services but critics warn that the practice may prod users into avoiding competitors’ services. Net neutrality rules imposed by the FCC in 2015 require broadband providers to treat all data equally and bar service providers from slowing consumer access to web content.
Tom Wheeler, who was FCC chairman until January 20, told Reuters last month that its investigation found some free data practices were abusive and anticompetitive. But in an about-face on Friday, the regulator now under Republican control said it was closing its investigation. “These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace,” new FCC chairman Ajit Pai said in a statement.
Sponsored or zero-rated free data programs allow mobile phone users free data if they use certain video services. AT&T phone subscribers can watch DirecTV, which is owned by the company, on their phones without incurring data charges. Verizon also offers mobile phone subscribers some sponsored “go90” video content that does not count against data caps.
In a January 11 report, the FCC’s wireless bureau said Binge On did not violate net neutrality rules, but it found concerns with AT&T and Verizon’s data programs.
Pai voted against the net neutrality rules and said last month he thought the regulation’s “days are numbered.” “It is clear that net neutrality is public enemy number one for Chairman Pai,” Democratic US Senator Edward Markey said on Friday. “He is starting his campaign by protecting harmful zero-rating plans.”
Verizon spokesman Rich Young said the company has always believed its free data programs benefit customers. Joan Marsh, an AT&T’s senior vice president said the decision was a “win for the millions of consumers who are reaping the benefits of services made available through free data programs.” Comcast declined to comment, but has said its “Stream TV” is an IP-based cable service that is not covered by net neutrality rules.