The Federal Communications Commission's new Republican leadership has rescinded a determination that AT&T and Verizon Wireless violated net neutrality rules with paid data cap exemptions. The FCC also rescinded several other Wheeler-era reports and actions.
The FCC released its report on the data cap exemptions (aka "zero-rating") in the final days of Democrat Tom Wheeler's chairmanship. Because new Chairman Ajit Pai opposed the investigation, the FCC has now formally closed the proceeding.
The FCC's Wireless Telecommunications Bureau sent letters to AT&T, Verizon, and T-Mobile USA notifying the carriers "that the Bureau has closed this inquiry. Any conclusions, preliminary or otherwise, expressed during the course of the inquiry will have no legal or other meaning or effect going forward." The FCC's Wireline Competition Bureau also sent a letter to Comcast closing an inquiry into the company's Stream TV cable service, which does not count against data caps.
The FCC issued an order that "sets aside and rescinds" the Wheeler-era report on zero-rating. All "guidance, determinations, and conclusions" from that report are rescinded, and it will have no legal bearing on FCC proceedings going forward, the order said.
AT&T and Verizon allow their own video services (DirecTV and Go90, respectively) to stream on their mobile networks without counting against customers' data caps, while charging other video providers for the same data cap exemptions. The FCC under Wheeler determined that AT&T and Verizon unreasonably interfered with online video providers' ability to compete against the carriers' video services, as we've previously reported. If Democrats had maintained control of the FCC, the commission could have tried to punish the carriers and force them to stop the offending behavior.
The FCC also examined T-Mobile's zero-rating but determined that it isn't anti-net neutrality because T-Mobile offers data cap exemptions to third parties free of charge and "provides little streaming video programming of its own," giving it less incentive to disadvantage video companies that need to use the T-Mobile network.
The net neutrality rules passed under Wheeler don't ban data cap exemptions, but the FCC evaluates zero-rating on a case-by-case basis to determine whether specific implementations harm consumers or competitors.
Pai opposed Wheeler's zero-rating investigation, saying that free data offerings are "popular among consumers precisely because they allow more access to online music, videos, and other content free of charge." He has also vowed to overturn the FCC's net neutrality rules and hasn't committed to enforcing them while they remain in place.
"While this is just a first step, these 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," Republican FCC Commissioner Michael O'Rielly said today.
Separately, the FCC today also rescinded a set of recommendations for boosting broadband infrastructure that was issued in Wheeler's final days. Among other things, the FCC also rescinded a notice of inquiry in a proceeding on 5G wireless network and device security; rescinded a white paper on cybersecurity risk reduction; revoked the designation of nine companies as Lifeline broadband providers; and rescinded a report on modernization of the E-rate program.
Mignon Clyburn, the commission's only remaining Democrat, called today's actions a "take out the trash day" and "Friday news dump."
"Today, multiple bureaus retract—without a shred of explanation—several items released under the previous administration that focus on competition, consumer protection, cybersecurity and other issues core to the FCC’s mission," Clyburn said.
Clyburn pointed out that Pai was previously critical of the FCC "for not providing sufficient reasoning behind its decisions."
“My office requested more than the allotted two days to review the dozen items released today. We were rebuffed," Clyburn said. "Then, we simply asked to have the bureaus comply with the reasoned decision-making requirements of the APA [Administrative Procedure Act]. No deal. It is disappointing to see this chairman engage in the same actions for which he criticized the prior chairman."
Pai issued a statement of his own, saying the FCC's previous leadership "released a series of controversial orders and reports" during "the waning days" of the Obama administration.
"In some cases, commissioners were given no advance notice whatsoever of these midnight regulations," Pai said. "In other cases, they were issued over the objection of two of the four commissioners. And in all cases, their release ran contrary to the wishes expressed by the leadership of our congressional oversight committees. These last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward. Accordingly, they are being revoked.”
Yesterday, Pai announced a new initiative to publicly release the text of rulemakings before they are voted on, something he unsuccessfully pushed Wheeler to do.
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