FCC drops all inquiries into Binge On and other zero-rating programs

As the FCC moves into a new era that, under new Chairman Ajit Pai, looks to cut down on regulations that purportedly impede innovation, it has reported that all inquires into sponsored data programs will be stopped.

Under Tom Wheeler, who former President Barack Obama appointed Chairman in 2013, the FCC began sending letters to the top U.S. network providers, including T-Mobile, AT&T and Verizon, on their use of "sponsored data programs" that either allowed companies to pay for the right to forgive the cost of certain blocks of traffic, or "zero-rate" traffic from an entire website or app.

T-Mobile has made this the most consumer-facing with its Binge On promotion, which under its new T-Mobile One plan doesn't count any video from most sources, including YouTube, towards one's monthly allotment. That video, however, is streamed at a lower bitrate than it otherwise would be, and preferences large media companies that have the power to negotiate deals with T-Mobile and its competition.

In a letter sent to the companies above, and a statement posted on its website, the FCC makes its intentions under this administration very clear:

Today, the Commission finally puts an end to the past Commission's zero-rating inquiries and recommits to permissionless innovation. 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.

That it "recommits to permissionless innovation" is a good thing for consumers in its eye, but the language around "just a first step" implies that under Pai, the FCC will dismantle Title II and the net neutrality clauses that are held within it.

Daniel Bader
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  • Well, this may or may not be good, I dont know. But I am not sure how stopping net-neutrality (if the next step is stopping those rules) will help consumers but I hope somehow things will. Carrier data is still so expensive...
  • You know the saying "________ is a slippery slope that leads to _____"? This is good for the consumer, but this sort of behavior can be abused quite easily. To the point where it actually affects how you use the internet. For example, if Verizon bought something like Netflix, they could have it be free on their networks, and either drop support on other ISPs, or force you to pay whatever they want. Essentially forcing you to Verizon. Or they could slow the connection way down on other ISPs. Not saying it will happen, but considering how trusty and reliable the ISPs have been thus far, I wouldn't be surprised. Things like Steam, Adobe CC, YouTube, Spotify, and virtually anything that can connect to the internet could be affected.
  • Think...bigger.  Consider that most ISPs are also cable companies. Time Warner, AT&T, Cox, Xfinity, etc. Now...consider that their cash cow , is television.  What's been killing that market ? Cable cutters who get their media through streaming television.  So with net neutrality gone, those ISPs could charge you so much per kb to access netflix and hulu that if you want media at all, it'll be cheaper to buy cable. For those of you too young to remember the last time this happened, look up the Cable Companies being deregulated in the 1990s. And then...count how many providers service your area.  They didn't compete like they promised, they simply cut the market into pieces and monopolized each individual piece.
  • Live in a country that doesn't screw over the consumer then.
  • @Studentoflife MD, you've laid out most of the pieces, but missed the biggest -- it's government regulation (albeit local, not federal) that prevents competition between cable companies locally. Company A (say, Comcast) wants to install cable to your neighborhood. Your short-sighted or greedy mayor, selectboard, or whatever says, "Sure, but you'll have to pay our town for the privilege of getting access to our citizens," to which Company A, responds, "OK, but if we have to pay, then we need exclusivity to make it worth the cost." To which the aforementioned government folks who aren't capitalists and don't think about the long-term implications of lack of competition accept those terms and both legislate and engage in contracts that ensure Company has no competition. As far as your local government is concerned in that scenario, it's a huge win: they successfully brought cable service to their town and they secured a nice sum or revenue stream. The future handcuffs as technology changes what the cable companies can provide never enter into their thinking. Unintended consequences. This is exactly why government needs to stay out of business and why regulations, including the future unintended consequences of Net Neutrality, generally do far more harm than good. They're not all bad and certainly rules to keep the players honest are important to a functioning system, but when you start telling businesses what they can charge and what kinds of deals they can forge with prospective partners, that's pure meddling and destructive. It's lack of competition, which is forced by government-protected local monopolies, that is the underlying problem. De-regulation is fine, it just has to include de-regulating the last-mile connections to homes.
  • The purpose of government is not to "help consumers" at the expense of businesses.  The purpose of government is to protect freedom.  Net Neutrality rules are the opposite of freedom.  Lack of competition for providers has been caused by government treating phone companies and cable companies as public utilities, giving them monopolies over territories in exchange for being regulated.  If you are unhappy with competition in Internet access (and you should be), blame government for creating monopolies (something else that was done in the name of helping consumers that has done exactly the opposite).
  • Exactly right. Well said.
  • In Australia we've had this for donkeys, different providers give you different perks, it's great.
  • Can people use the program, or is it only for donkeys?
  • To be honest there isn't much difference around here.
  • Ah Australia, best known for their blazing fast internet speeds!
  • I can smell sarcasm. That being said though we actually have an incredibly fast mobile data network relative to many parts of the World, it's just our fixed system that is a POS.
  • Kidding, kidding... Let's just hope I don't have to pay extra to watch netflix on comcast..
  • Don't feel bad, you weren't wrong our fixed internet is horrendous and one of the worst in the World. Mobile is great but it costs an absolute fortune so you can't get decent download limits unless you are spending a hundred bucks a month and even then you could chew through it in days with video streaming. In fact you remind me of when Netflix first showed off their Australian system and they streamed a 4K video... it didn't work because our internet couldn't handle the bandwidth so they had to switch to 1080P.
  • Net neutrality?  Goodnight sweet prince.
  • Well - someone who made is fortune out of people is in charge of the country.. who thought he would suddenly fight for the people.
  • Net Neutrality has been a complete mess. Some of what it did has been good, other parts of it bad. For example, if you have an AT&T cell plan, they would not count streaming DirectTV against your data limits. How can that be bad? However, some things like Netflix having to pay to data operators to make sure their data is delivered at full speed rather than reduced is completely bad. The last administration through the FCC completely screwed up so many things that it is good for a change. For example, their plan to allow any device to tap into cable, only to reverse that a few days later because the cable co's promised to allow streaming to devices of their choice. Their continued enforcement of regional monopolies, and so much more. Glad to see a change.
  • Not counting DirectTV against your data limit while charging other companies to opt in to the same service is bad because it lets AT&T decide what content gets preference based on if they own the content or what a third party can pay. These changes might be good for consuners who only want content that is fed to them as they save money at the expense of choice.  But many don't care because they don't undestand the big (brother) picture.  In the long run, when the distributors control all the content, the "free and open" aspects of the Internet that currently remain will go extinct.
  • Too bad direct TV doesn't make a w10m app so I can take advantage of that feature....
  • This is the best example of why this is bad for people. Now At&t controls your choice. DirecTV streams for free or Netflix you pay for. Which do people choose? They make their own DirecTV service successful and hurt choice.
  •   I use AT&T as my mobile carrier, but I don't ever plan on using DirecTV as my TV service. I rarely stream Netflix from my phone, but I do YouTube quite often. While this would be a definite perk to not have to worry about data limits if I had DirecTV already, that is not enough of a reason to switch. And as far as I can tell, DirecTV's streaming service isn't even a direct competitor with Netflix anyway. It's more of a Playstation Vue/Slingbox competitor. I have the 4K Netflix plan to take advantage of my UHD TV, and the DirecTV streaming service cost 3 times as much per month. From someone who is on the outside looking in, as far as this free streaming is concerned, I have no problem with offering benefits to consumers. As long as the carriers aren't unfairly charging content providers or capping data speeds for those content providers who don't opt into this program, I personally don't consider this as a violation of the concept of "net neutrality."
  • There are no bad parts to net neutrality.  Is there a paywall between you and websites you visit?  That's net neutrality in action.  Any change to that is a change for the worse.  Unless you want to leave in a world where the Internet is chopped up like cable TV.  Also, you're confusing zero rating with net neutrality. 
  • Apple tax!!
  • *live not leave.  Oops.
  • The biggest problem with undoing Net Neutrality is that it allows companies like Verizon to slow down or completely block content from Comcast or comvast owned entertainment for example. Or perhaps Microsoft and Comcast could work together and block Steam for all comcast subscribers so they can only download games from the windows store. Or Apple could do the same and get any ISP to block google or microsoft forcing people to buy iphones. These are extreme examples of course but without net neutrality, it opens the door for a lot of anti consumer practices.
  • Att&t Comcast TMobile   Which one do you work for again?
  • I expect we'll see net neutrality scrapped but my hope is that after awhile some carrier will decide that to stand apart from the crowd they'll offer net neutral plans. 
  • Or maybe even worse, they'll let you opt for a "net neutral" data plan that may cost more money. Something similar to Amazon's Kindle "with ads" or "without ads" options, which consumers seem fine with. Most people will do anything to save a buck but don't realize the repercussions...
  • Those are fine -- that lets the market sort it out, which is the right way to handle this, not the innovation-destroying heavy hand of government regulations. I don't use Google because I hate the idea of being the product Google sells to their customers, the advertisers. But I'm obviously in the minority, and millions of people benefit from the free stuff Google provides because they don't mind trading their privacy and an ad-free life for free or cheap services. Unlike laws that pick one group's preferences and force them on everyone, the market gives everyone a fair say in how the services companies offer evolve.
  • Real innovation isn't freezing out the competition. Net neutrality encouraged actual innovation from the small players most likely to have new ideas.
  • @wshwe, government programs that prevent companies from creatively structuring deals does not foster innovation. It prohibits it, literally and explicitly. The unintended (and therefore unforeseen) consequences of trying to make business better through legislation are almost always worse than the problems they seek to solve. In this case, the root cause that motivated the net neutrality movement is lack of competition for cable in communities, which itself is the result of local governments granting monopolies to cable companies. If there's a federal government program you should support, it would be smashing those local government-granted monopolies. Cable companies should be allowed to recoup the costs for deploying to the communities and make a reasonable profit before having to open up their lines to competition, but if you're determined to see federal regulation at all, then that's the best place to look.
  • Ha! 'Creative Structuring'!  Welcome to the alternative facts version of Competition Strangling..  The number of cable companies is irrelevant to a website trying to break into an uncompetitive market.  If the cable companies have their preffered provider that has a reduced cost for the consumer built in, then competitors by default have a higher cost of entry into the market.  THAT stifles innovation far more than anything else. 
  • @SlideWRX (do you drive a WRX, or is that name unrelated to the car? I drove WRXs for about 12 years -- awesome piece of machinery) - you are entirely correct that if, say, Google and Comcast merged into ComcastGoogle, then ComcastGoogle would have an interest in prioritizing YouTube delivery over Netflix to maximize their ad revenue. All else being equal, that would clearly be in their best interest. But, that's only evaluating the incentives from a single perspective, and while that is definitely an incentive, it's a lesser incentive than the one that pushes in the opposite direction when there is true freedom of competition. So, continuing with the above example, if there were a demand for Netflix and Hulu and ComcastGoogle throttled them or charged extra to protect their YouTube revenue, then ComcastGoogle would be punished by losing customers to the competing ISP who didn't do that. That is a much larger incentive, and over time the primary driver. This is exactly why T-Mobile and Sprint and now Verizon and AT&T are back to offering unlimited data plans. Obviously, if there were no need to make that change, they would prefer to charge for every byte of data used (same incentive as ComcastGoogle has to maximize its YouTube revenue), but T-Mobile and Sprint went unlimited to attract customers from the big guys, and to remain competitive, Verizon and AT&T are forced to do the same. The problem with cable companies is that customers have no place else to go. There is no competition at that level, so there is no countervailing incentive. Net Neutrality offers a solution to this, but it's solving the wrong problem. It's replacing one government-induced problem (local monopolies protected by bad laws) with another, and still missing the core issue -- lack of competition because of the local monopolies.
  • I hope Ajit Pai gets into a fatal car accident.
  • Zero-rating is only a thing because of the reliance on data caps by ISPs.
  • Net neutrality really sucks in the US.
  • Good. Get the feds out of the equation.
  • Hmm, on a philosophical level I agree with the moves to deregulate and dismantle net neutrality, but I fear the underlying problem will not be solved. That problem is the dearth of choices and competition in internet providers, which I believe is caused by individual cities granting monopoly rights. Think about different plans that could be available if these restrictions were removed: One that focuses on low-latency for gamers, one that has a high or no data limit for media consumers, and one with high bandwidth for... People hosting web servers? Sure one isp could slow or block content from one site, but with more options you could switch to another kind of like SIM providers in Europe? The point I'm trying to make is that forcing business to behave in one certain way can stifle innovation. Any constructive criticism?
  • @sudoKode, good point about the local monopolies. Certainly the euphemistically named "Net Neutrality" is terrible for innovation and therefore ultimately bad for both businesses and consumers. However, the base problem it purports to solve -- large cable companies giving preferential bandwidth treatment to specific content sources -- will likely remain. The irony is that these are caused by other government programs granting cables monopolies in geographic regions. The right way to achieve the objectives of Net Neutrality would be to prevent local governments from granting monopolies for longer than it takes for the cable company to earn back its deployment costs plus X% profit, at which point competition must be permitted. I'm not sure exactly how that would work in really rural areas where it might be decades before costs are recouped, but even following this same rule  would at least be an improvement over what's there now. It would serve as an added incentive to run cable to those rural areas (bringing better Internet) that currently only have satellite TV as an option and are often still stuck with dial-up.
  • Finally! Something different.
  • I love Binge-On. It allows me to use my Idol 4s as my only multimedia device that I can take anywhere. I don't have to worry about data overages. Just plug into any TV or monitor with the display adapter= instant entertainment.
  • Net Neutrality is a disaster.  If you believe in freedom, you should detest Net Neutrality.  Glad to see it being weakened.