FCC: AT&T, Verizon shouldn’t exempt apps from data caps

Tali Arbel
Associated Press

New York — U.S. regulators are calling out AT&T and Verizon for exempting their own video apps from data caps on customers’ cellphones.

The Federal Communications Commission sent letters to the country’s biggest wireless carriers Thursday saying the way they handle the practice, known as “zero rating,” can hurt competition and consumers. The agency had warned AT&T in November and said in its Thursday letter that AT&T’s response did not ease its concerns.

Other services — say Hulu or Netflix — can pay Verizon and AT&T so that consumers could also use those apps without eating up cellphone data. The FCC says that could harm the market for streaming services as it makes it more expensive for internet companies to compete with video services that are owned by the carriers.

AT&T said Friday that exempting things like its new DirecTV Now online TV app from data caps saves customers money, and the FCC shouldn’t put a stop to that. Verizon said its practices are good for consumers and comply with regulations.

The warnings come in the final days of the FCC under the Obama administration, which has enacted regulations intended to prevent cable companies from playing favorites with internet services.

But the agency leaders appointed by Donald Trump, the incoming president, along with a Republican-controlled Congress, are expected to roll back or enforce more leniently such measures.

The FCC still has to make a final finding on whether the zero-rating practices of AT&T and Verizon are a problem. The companies could appeal that.