FCC reaches preliminary conclusion that AT&T is violating net neutrality with DirecTV data cap exemption
and it's warning Verizon, too Jake Smith / ZDNet : FCC doesn't like AT&T, Verizon ‘zero rating’ their own video apps T.C. Sottek / The Verge : This insane example from the FCC shows why AT&T and Verizon's zero rating schemes are a racket Tweets: Dan Gillmor / @dangillmor : Far too late, FCC realizes carriers are punching giant holes in net neutrality. http://www.theverge.com/... (Trump will kill it anyway.) See also Mediagazer
Context & Ripple Effects
This closes a month-old loop: in early November the FCC first flagged that AT&T's exemption of DirecTV traffic from wireless data caps might break its net neutrality rules, and today it moves from question to preliminary finding — while putting Verizon on notice for the same practice with its own video apps.
The stakes are bigger than one carrier's bundle. The same corpus shows how quickly this kind of enforcement evaporates: within three months a new FCC chair had dropped the parallel probe into Verizon, which promptly expanded data cap exemptions to the FiOS Mobile App — a preview of how the AT&T case was likely to end under the incoming administration.
First-order effects
- AT&T faces a formal preliminary violation finding on its DirecTV zero-rating, forcing it to either defend the exemption before the FCC or unwind it for customers who stream on capped plans.
- Verizon receives an explicit warning over zero-rating its own video apps, freezing any further expansion while the inquiry is live.
Second-order effects
- Carriers with no owned video service to exempt are put at a competitive disadvantage against AT&T and Verizon bundles, pressuring them to acquire or partner for exemptible content rather than compete on raw data value.
- Rival ISPs watch the enforcement outcome as their cue: if zero-rating survives politically, sponsored-data and app-exemption schemes become standard pricing architecture rather than a regulatory risk.
Third-order effects
- Net neutrality enforcement proves contingent on who chairs the FCC rather than on the rules themselves — a probe opened under one administration is closed under the next, and carriers time expansions to the political calendar, as Verizon did after its probe was dropped.
- If bundled-video exemptions become the norm, wireless data shifts from a metered utility to a carriage business where carriers favor their own video, echoing the structural logic the 2018 appeals court ruling endorsed by giving the FCC wide leeway on ISP competition questions.
The trend: Zero-rating is becoming the wedge through which carriers re-bundle video with connectivity, with enforcement rising and falling on which party controls the FCC.