FCC: Verizon, AT&T Probably Violate Net Neutrality

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AT&T and Verizon are likely violating net neutrality laws by letting subscribers of their mobile data plans stream some audio and video content without it counting towards their data caps, the Federal Communications Commission said Wednesday.

In a report sent to members of Congress, the FCC said that both wireless carriers operate sponsored data programs that are in violation of the commission's 2015 Open Internet Order, which prohibits network operators from offering sponsored data to third party content providers at less favorable terms than those they offer to their subsidiaries and affiliates.

In AT&T's case, the decision applies to its Sponsored Data program, which lets companies pay to exempt their streaming audio and video content from subscribers' data caps. That's allowed under net neutrality rules, but the problem, according to the FCC, is that AT&T also exempts its streaming video from DirecTV (which it owns) from data caps. AT&T told the commission that it doesn't favor DirecTV over the third-parties, but provided little evidence to back up its claims.

"The limited information we have obtained to date, however," the FCC wrote, "tends to support a conclusion opposite from AT&T's contentions – namely, that AT&T offers Sponsored Data to third party content providers at terms and conditions that are effectively less favorable than those it offers to its affiliate, DirecTV."

Verizon's FreeBee data program is structured the same way: other companies, which the FCC refers to as "edge providers," can pay it to exempt their content, but Verizon also offers its own exempt streaming content, called Go90.

"We are aware of no safeguards that would prevent Verizon from offering substantially
more costly or restrictive terms to enable unaffiliated edge providers to offer services
comparable to Verizon's Go90 on a zero-rated basis," the FCC wrote.

AT&T and Verizon did not immediatley respond to requests for comment.

Meanwhile, T-Mobile's Binge On is not in danger of violating net neutrality rules because the carrier doesn't charge third parties to exempt their content and offers little content of its own, the FCC said.

The commission's report is more of a warning than an official sanction, since it already agreed to postpone all important business until President-elect Donald Trump takes office later this month. Trump is not a fan of net neutrality regulations, so AT&T and Verizon may never face penalties under an FCC controlled by his administration.

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