FCC chairman has no issue with carriers’ zero-rating of data, drops inquiries

We were talking just the other week about the practice of carrier’s zero rating data for particular services, and in particular, Telstra partnering with Apple to offer unmetered access to Apple Music for Telstra Mobile customers. Zero-rating is a key concept in the discussion of net neutrality, something which has been well within the FCC’s spotlight in the US in recent times. Well, until now.

Under the Obama administration, the FCC was sufficiently concerned about these practices to carry out some inquiries with major carriers, but with the appointment of Trump’s new FCC chairman, Ajit Pai, the carriers have been let off the look, told that the FCC won’t be a hinderance any further.

In an announcement today, the FCC said that they are putting an end to “the past Commission’s zero-rating inquiries”, and recommitting themselves to “permissionless innovation.” The FCC went on to say:

“While this is just a first step, these companies, and others, can now safely invest in and introduce highly popular products and services without fear of Commission intervention based on newly invented legal theories.”

In a letter to major carriers T-Mobile, AT&T and Verizon, the FCC reiterated that it has officially closed the inquiry and that, “any conclusions, preliminary or otherwise, expressed during the course of the inquiry will have no legal or other meaning or effect going forward.”

Newly annointed FCC Chairman Pai — who is on the record for opposing net neutrality — released a second statement, saying the FCC would take a more hands-off approach when looking at free-data programs:

“Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers’ free-data offerings. These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace.

Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.”

Under the Obama administration, former FCC chairman Tom Wheeler conducted informal inquiries into carrier’s zero-rating schemes. The issue is that by zero-rating their own services over others, carriers were creating an unfair advantage, a slippery slope and something that had the potential of violating net neutrality laws.

While the FCC’s decisions have limited impact on us in Australia, where net neutrality really hasn’t become as big an issue, zero-rating of data is something we’re seeing more and more of from mobile carriers. Some offer free music streaming, others offer free video streaming … but it depends on which carrier you’re with. Being that the likely candidates for zero-rating are enormous companies as it is, zero-rating here is not likely to have a significant anti-competitive impact.

Still, it’s always interesting to see what’s happening across the Pacific.