WASHINGTON — The Federal Communications Commission is getting flooded with comments asking it to “please protect our free data.”

The FCC is currently investigating zero-rating plans — in which some video content does not count against broadband-usage caps — from a handful of top ISPs as part of its general- conduct standard of review for business practices that could impede a free and open Internet. The review was also prompted by a complaint fi led against Comcast’s Stream TV.

A check of the FCC docket on open Internet issues finds a flurry of form letters — the majority of the several thousand comments filed over the past couple of weeks — in two different variations, but making the same point. Many appear to have been generated from an online form set up by Phone2Action, a boutique firm providing grassroots online activism tools for clients and headed by, among others, former Washington, D.C., Mayor Adrian Fenty.

“Free data plans are new and innovative services that give you ‘free’ content as part of your existing wireless data plan,” reads one of the letters, which then details their many upsides.

The dark cloud on that sunny horizon, the commenters suggest, is Washington, D.C. “We must act now to protect these free data plans from regulators and policymakers,” the letter reads, adding that companies should be encouraged to find more ways for users to feed their growing mobile appetites, not less, and for Washington to allow the Internet “we all love and rely upon” to “grow and evolve.”

Broadband providers argue that zero-rating plans are a user-friendly way to differentiate service — for example, T-Mobile zero-rated Pokémon Go as a way to differentiate its service as the wildly popular VR game swept the nation. On the other side, opponents argue zero rating is a pay-to-play way for some services to get an unfair advantage and divide the net into haves and have nots.

It might not be an either-or proposition. The FCC could decide that the plans are OK in some circumstances, but anticompetitive in others.

Former Democratic FCC chairman Reed Hundt has said he thought the FCC would have to allow for some form of zero-rating plans. Asked at the Multicultural Media, Telecom and Internet Council’s 14th annual Access to Capital and Telecom Policy Conference in Washington, D.C., about the FCC’s current investigation into zero-rating plans, Hundt said he thought the agency was going to have to decide that people — in this case, broadband providers that carve specific services out from usage-based pricing plans — are going to have to be allowed to give things away for free.

“Being against free is not very popular,” Hundt added — except with such groups as MoveOn.org, Color-Of- Change, Center for Media Justice, Fight for the Future, Demand Progress, Free Press and Open Technology Institute. They told the FCC that zero-rating plans could “break the net,” urging action be taken on the strength of more than 100,000 comments critical of the practice.

FCC chairman Tom Wheeler in June said the FCC continues to investigate the rating plans, but did not signal any imminent decision on them.

WASHINGTON — Former Federal Communications Commission chairman Reed Hundt signaled Wednesday he thinks the agency is going to have to allow for some form of zero-rating plans.

Hundt, a Democrat who headed the FCC during President Clinton’s first term, was paired in a lively discussion with current Republican FCC commissioner Michael O'Rielly at the Multicultural Media, Telecom and Internet Council’s 14th annual Access to Capital and Telecom Policy Conference in Washington Wednesday (July 13).

Asked about the FCC’s current investigation into zero-rating plans under its network-neutrality general conduct standard, Hundt said he thought the agency was going to have to decide that people — in this case, broadband providers that carve specific services out from usage-based pricing plans — are going to have to be allowed to give things away for free.

“Being against free is not very popular,” he added.

O’Rielly said he did not want the FCC to foreclose the kind of experimentation represented by zero rating plans. He said the agency’s investigation has caused companies to keep some offerings on the sideline while awaiting a decision, and complained that the general-conduct standard has no process for concluding debate.

The pair diverged sharply over the FCC's recent court victory in Internet-service providers’ challenge to that general conduct standard and other parts of the Open Internet order.

Hundt said the FCC’s legal victory was second only to the ruling establishing the agency’s jurisdiction over telephone regulation, which came during his tenure. Had the U.S. Court of Appeals for the D.C. Circuit not not also upheld the FCC's jurisdiction over regulating a free and open Internet, the commission would be essentially out of business, and wouldn’t be able to serve as a watchdog for innovative minority entrepreneurs.

O'Rielly, who voted against the order, said the court should not have blessed the FCC's adoption of prescriptive rules absent any evidence of a problem, saying the zero-rating debate vetting under the general conduct standard was a prime example of companies trying to innovate and build a new business, but having to worry that the FCC could jump in anytime, on anything, and decide after the fact it was out of bounds.

O'Rielly said he had talked to manufacturers who had changed product lines because of the decision.

Each was asked which FCC priorities they would like to see under the next presidential administration. O'Reilly said he would like to see some humility and collegiality. Citing a former boss, he said if neither side is asked to bend on principles, there should room for common ground in the middle, within the bounds set by Congress in statute.

Hundt, who pointed out he was a former law school classmate of presumptive Democratic nominee Hillary Clinton (who would not go out with him, he added), was more specific.

He pointed out that as the FCC is rolling out its plan for freeing up spectrum for 5G this week, and said buildout rules would need to be in place to insure the new technology is rolled out everywhere and to everyone, regardless of income or geography.

Hundt also said that the FCC might look for more progressive ways to fund its programs (he conceded such funding was essentially a tax). He did not say exactly which programs he was talking about, but did talk elsewhere about Lifeline and e-rate subsidies. He said he did not want to give away too much about what Mrs. Clinton was thinking, but suggested that “those who have a lot of money could pay a greater proportion.”

Nonprofit group Demand Progress is looking to flood the Federal Communications Commission with complaints about zero-rating plans as the FCC considers how to treat those business models under its network-neutrality general-conduct standard.

The group has already concluded the zero-rating plans violate the rules. “We need to make sure the FCC knows we’re watching and sets the precedent that violating net neutrality has real consequences,” it said in a June 1 email solicitation that linked to an online form letter complaining to the FCC.

As a condition of its deal to acquire Time Warner Cable, Charter is forbidden to use zero-rating plans, and FCC chairman Tom Wheeler has signaled that the plans, at least in the context of that merger, are anticompetitive.

Demand Progress has advised its supporters to personalize its complaint form letter, but if the docket fills with comments that begin, “AT&T, T-Mobile, Verizon and Comcast are trying to sneak past net-neutrality rules,” it would be courtesy of the group’s one-stop-grousing online effort.

The FCC is currently vetting plans by Comcast, T-Mobile, Verizon and AT&T, but Demand Progress said it is mostly hearing from those companies and not others opposed to the plans.

Zero-rating plans are ones in which some services, particularly bandwidth-heavy video services, don’t count toward usage-based pricing caps (usage is not actually capped, but overages incur extra charges).

The FCC did not prohibit those under its net-neutrality rules, but under the general conduct standard can look at anything that potentially has an anticompetitive effect.

Young Entrepreneur Builds an App to Find OTT ‘Budget Bundles’

Entrepreneurial 21-year-old Griffin O’Brien is out to help people put together the right mix of paid streaming services to get the television they want (and can afford) without having to go the full cable, telco or satellite TV route.

He’s working on a “Budget Bundle” app consumers could use to sift through 30 primary over-the-top options — too many options for anyone to keep straight in their heads. There are places to find streaming reviews but “a glaring gap” between the glut of services and the consumer’s ability to cut the cord or graduate from being a cord never to a smart streamer.

O’Brien — son of former Time Warner Cable executive and serial investor Dan O’Brien — is getting attention via social-sharing of a write-up on Facebook, where he’s taking signups for a newsletter, and he would like to launch the app, with some help on the business side from his brother Matt, in the next several weeks. He’s learning how to take his idea from a database to an actual, developed product (and looking into protecting the algorithm legally). He’s also starting a summer internship at Turner in Atlanta and has another year to go in college before he graduates.

If it all comes together, O’Brien said he could stay with it in the fall, saying, “I’m really passionate about the service and think it could become something really great.”

Millennials who are leaving college, and Hispanics, who are big consumers of streaming products, are potential key audiences, and advertising or referral payments from OTT providers are potential revenue sources, he figures.

— Kent Gibbons

ISPs Get an Indie Label

An independently funded searchable database of Internet provider data has produced its own broadband nutrition labels, using the form the Federal Communications Commission provided for ISPs who want to make sure they provide all the network-management and pricing info required under the agency’s net-neutrality rules.

Rather than relying on those ISPs to come up with their own individual labels, the groups did their own research to create labels for a host of providers and posted them online. “We really just wanted to create more transparency in a market where there is a lot of gray area for most consumers,” said Alex Harrison, content coordinator for Broadband Search.

The overall goal of the 10-month-old site is to “help consumers make the best, most-educated choice when searching for Internet and TV,” Harrison told The Wire. “Think a mixture of Kayak and Angie’s List but for Internet and TV providers.”

— John Eggerton

Edge providers and public activist groups got together on a letter Tuesday (May 24) calling on the FCC to bring its investigation of zero-rating plans out into the open.

Last fall, FCC chairman Tom Wheeler announced that the agency had begun investigating the zero-rating plans of T-Mobile, Comcast, Verizon and AT&T under its Open Internet general conduct standard, but the groups want the FCC to open a formal proceeding with a chance for outside input from stakeholders.

"In the Open Internet Order, the FCC declined to issue a bright-line rule against zero-rating, noting a lack of consensus on the issue in the record," they wrote in a letter to Wheeler. "However, in the time since the Order was released, ISPs have created a broad enough set of test cases that a decision on each of them would have much the same effect as a new rule, only without the same public participation and transparency.

"Making decisions on these cases would set precedents for future practices, and would have implications for the Internet ecosystem that reach far beyond the stakeholders directly affected by these individual plans," they added. "These decisions are too important to happen behind closed doors."

They cited the very public nature of the Open Internet rule process that generated the general conduct standard now being applied, and said the zero-rating issue should get similar wide and deep participation.

"The FCC’s process in this critical area would be immeasurably enriched by the participation of diverse stakeholders, many of whose input helped shape the Open Internet rules," they said. "Together, we stand ready to contribute to your careful evaluation of this important issue, to protect an open Internet where innovation, competition and civil rights can thrive."

Among those standing ready were Mozilla, Kickstarter, Pinterest, Vimeo, Etsy and Yelp, as well as Common Cause, Fight for the Future and the Future of Music Coalition.

Internet service providers such as Comcast, AT&T and Verizon are setting the stage for a battle among streaming content providers such as Netflix and Amazon that will impact the ISPs' own future revenue and could generate more regulatory scrutiny, according to an economic analysis from University of Florida academics. 

Their new study "Should Online Content Providers be Allowed to Subsidize Content?"  finds that controls -- such as the throttling that Netflix acknowledged last week -- could create "a digital marketplace with fewer consumer options," which in turn could trigger future regulatory review.

For their analysis, the Florida researchers developed a game theory model where major content providers may be forced into a bidding war, which the scholars concluded could lead to a monopolistic digital content landscape and test the limits of net-neutrality laws. They cited the newly implemented “zero-rating” data subsidization plans, where consumers can stream digital content from selected content providers for free. Content providers pay for consumers’ data usage fees in hopes of attracting new customers.

The ISPs' profit is always maximized when content providers are subsidizing data usage fees, according to the researchers' modeling.

“In effect, the content providers are in a classic ‘Prisoner’s Dilemma,'” according to one of the study's authors, Subhajyoti Bandyopadhyay, an associate professor at the University of Florida's Warrington College of Business. Competing content providers can afford to pay, but would prefer not to pay.

"But [they] know that if they don’t pay," another content supplier will pay "and drive them out of the market. So the ISP, which knows all this before the game starts, decides on a pricing strategy that forces both of them to pay,” said Bandyopadhyay.

The report also cites the consumer and regulatory dilemmas triggered by the situation in which some content appears to be free and other content is not. Bandyopadhyay noted that the Federal Communications Commission is monitoring content subsidy practices to see if they violate net-neutrality laws, which mandate that every packet of information that traverses the internet be treated equally.

“Here, they are technically being treated equally — no packet is prioritized over any other,” he explained.

But according to the economic model that Bandyopadhyay and his two colleagues created, a powerful content provider under certain market conditions could drive out other content suppliers, leaving fewer options for consumers. With one dominant content provider controlling the market, it would be virtually impossible for new entrants to gain a foothold, Bandyopadhyay said.

 “With digital content, it’s a self-perpetuating cycle, where the stronger content provider becomes even stronger over time,” he added. “So, in the long term, from a content diversity point of view, such arrangements make less sense."

He cited the value of  encouraging innovative streaming ventures, but added, "You don’t want them to use their market power to preclude future competition."

Bandyopadhyay said he hopes the FCC will consider the new research during its continuing review of net-neutrality policy. His previous research was cited in the early Open Internet reviews.

“The difficulty in such situations is, who knows what may happen in the future?" Bandyopadhyay said. "Content might be disseminated in a very different way, and there might be different kinds of ISP competition in the future. So you cannot regulate future innovation based on what exists currently."