FCC Probes Permissionless Innovators

WASHINGTON — The Federal Communications Commission has begun to triangulate its position on what constitutes interrupting the virtuous circle of Internet innovation, and Comcast, AT&T and T-Mobile will get to be the canaries in the mineshaft.

Network-neutrality proponents have criticized FCC chairman Tom Wheeler for suggesting that Binge On, T-Mobile’s video zero-rating plan, was the kind of highly innovative approach that critics of the agency’s new net-neutrality rules predicted those regulations would thwart, but clearly haven’t.

Wheeler has followed up on that pronouncement with letters seeking information from ISPs with zero-rating or sponsored-data plans.

In addition to Binge On, the FCC wants data from Comcast about Stream TV and from AT&T about sponsored data plans, which generally shield a particular data service from being counted under subscriber-usage limits. The requests are in the interest of learning more about the innovative practices he said the FCC would examine in relation to new open Internet rules, Wheeler said.

Wheeler said the requests were not investigations, but simply an opportunity for the FCC to learn more about these plans. But the letters weren’t thank you notes, either, according to copies of two of them obtained by Multichannel News.

“As you may be aware, concerns have been expressed about these programs,” Wireless Bureau chief Roger Sherman wrote to AT&T. “For example, some have argued that sponsored data unfairly advantages incumbent content providers.”

The letter also asked AT&T to make “relevant technical and business personnel” available for meetings with the FCC.

In a similar letter to Comcast from Wireline Bureau chief Matthew DelNero, the FCC set the same Jan. 15 deadline for meetings about the Stream TV service, which allows Xfinity Internet subscribers to stream video without it counting against monthly data-use limits. Comcast has said that Stream TV is an IP cable service that does not use high-speed Internet bandwidth.

Given Comcast’s tests of Stream TV and its plans to roll it out this year, DelNero said the FCC wants to make sure it has “all the facts” and understands how the service relates to the agency’s goal of a “free and open” Internet that still incentivizes innovation and investment.

The FCC’s new rules don’t prohibit sponsored-data or zero-rating plans. But they give the agency wiggle room to crack down on virtually any ISP practice deemed to interrupt the virtuous circle of edge provider to ISP to customer (with the caveat that the agency won’t go after edge providers).

At last week’s International CES in Las Vegas, Wheeler told a panel-session audience that one reason for the new Title II-based net-neutrality regulations was to allow the FCC to respond to changing broadband technologies. However, it was not to require ISPs to have to ask permission to innovate, he added.

Critics of the rule are more worried about the innovations that could come back to bite them if they guess wrong about whether the FCC would be OK with pushing ahead without permission.

The caveat that “this is not an investigation” didn’t assuage Daniel Lyons, a law professor at Boston College and an adviser to free-market think tank The Free State Foundation.

The inquiry is likely to “put a damper on Internet providers’ efforts to meet evolving consumer demand though zero-rating and sponsored data programs,” he said in a blog post last week, adding: “The commission’s next steps in this inquiry, and its response to advocates’ continuing pressure to impose a uniform ‘dumb pipe’ model on the broadband industry, may determine how far the agency will go to sacrifice consumer choice out of fear that consumer preferences may somehow harm Internet-based edge provider companies.”

The FCC gave ISPs until “no later than Jan. 15” to make staffers available for discussions — voluntarily, of course.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.