Zero Rating ≠ Net Neutrality

Last week, the FCC Wireless Telecommunications Bureau released its Policy Review of Mobile Broadband Operators’ Sponsored Data Offerings for Zero-Rated Content and Services.  The report examined the 2016 sponsored data and zero-rating initiatives of mobile broadband providers.  Specifically, the Commission examined T-Mobile’s Binge One, AT&T’s Data Perks, AT&T’s Sponsored Data, and Verizon’s FreeBee Data 360.    The focus of the evaluation was “the potential harm to consumers and competition in downstream industry sectors that could result from upstream network operators’ unreasonably discriminating in favor of select downstream providers that are affiliates”. 

The FCC found that T-Mobile’s Binge One and AT&T’s Data Perks “did not discriminate against or disadvantage edge providers or end users.”  However, the FCC found that AT&T’s Sponsored Data to third party content providers were offered at less favorable terms and conditions compared to what was offered to DIRECTV (benefiting DIRECTV NOW), an AT&T affiliate.   (Note: Verizon’s sponsored data plan was also shown to benefit its affiliate service, go90, but since go90 is much smaller than DIRECTV NOW, the magnitude of the current anticompetitive harm was estimated to be much less.)

The Commission concluded that “Given the powerful economic incentives of network operators to employ these practices to advantage themselves and their affiliates in various edge service markets, we are equally concerned that – absent effective oversight – these practices will become more widespread in the future.”

Why shouldn’t Pennsylvania get to keep the CAF Phase II money?

A brief overview of the Connect America Fund (CAF).  As an extension of the Universal Service Fund, CAF is the FCC's program to expand access to voice and broadband services to un[der]served, rural communities.  Phase I, which began in 2012 and ended a year later, combined millions of public and private funds to expand broadband services to unserved, rural areas.  Phase II began in 2015.  In the second phase, the FCC will provide over $1.5 billion per year for six years to price-cap carriers to subsidize their “cost of building new network infrastructure or performing network upgrades to provide voice and broadband service in areas where it is lacking” (fcc.gov).  

The support comes with strings attached.  After all, there is NO SUCH THING AS A FREE LUNCH!  If a carrier accepts CAF Phase II money, it must provide the broadband service at speeds of at least 10 megabits per second (Mbps) downstream and 1 Mbps upstream, and at reasonably comparable rates found in urban areas.  Verizon evaluated the tradeoff as not being worth it.  But, where does that leave residents of rural communities in the state of Pennsylvania?   The PUC and Sen. Bob Casey believe that the PA funds should not be at risk for leaving the state in a competitive bidding process.  Instead, the state should be entitled to “keep” the CAF funds.  Specifically, other providers in the state who have agreed to participate in the program (like CenturyLink or Windstream) should get the money.  Let’s see what the FCC thinks of that idea.

https://www.fcc.gov/reports-research/maps/connect-america-phase-ii-final-eligible-areas-map/

Blackout averted, for now!

There was no resolution, just delay, in the contract talks between Charter, the MVPD, and Comcast, the content owner, over carriage of NBC-U programming on Charter's distribution pipes.

See:  http://delivermyshows.com/