Posted by Alonso Arbulu.
In June 2016, a federal court of appeals upheld government net-neutrality rules. The Federal Communications Commission enacted this new ordinance under the past chairman, Tom Wheeler. According to this law, both the government and Internet providers should treat all data on the web as equal.
An issue arose, when T-Mobile, Verizon, and AT&T started offering zero-rating plans, in which they gave their customers free data when using certain apps. The FCC perceived that the implementation of these data plans violated the net-neutrality rules by favoring certain content owned by the internet providers. In Tom Wheeler’s words, these firms’ practices negatively affected competition through “potentially unreasonable discrimination in favor of their own affiliates.” Accordingly, the FCC under the supervision of Tom Wheeler started an investigation to determine whether or not these companies were adversely affecting consumer benefits by breaking net-neutrality rules. In response to the inquiry, the telecommunication firms claimed that their practices benefited customers by increasing competition, and provided free data and easily accessible content at a better price.
At the beginning of February this year, Ajit Pai was tapped to be chairman of the FCC. Despite the past leadership’s perspective of the zero-rating plans, Ajit Pai decided to close the investigation, dropping the charges against the Telecommunication companies. According to the FCC Commissioner Michael O’Rielly “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.” O’Rielly’s comments highlight the benefits of zero-rating plans and endorse Ajit Pai’s decision on this issue.
Alonso is an economic and finance student at the Stillman School of Business, Seton Hall University, Class of 2019.
Article links:
https://thetechportal.com/2017/02/04/fcc-against-net-neutrality-zero-rating-schemes-t-mobile-bingeon-att-sponsored-data/
Background information:
https://www.wsj.com/articles/fcc-approves-net-neutrality-rules-setting-stage-for-legal-battle-1424974319