Wireless phone companies and TV stations are among the big winners in a bevy of decisions that the FCC — under its new chairman, Ajit Pai — released today as it begins to reverse policies supported by his predecessor, Tom Wheeler.
Pai halted the agency’s investigation into so-called zero rating programs that enable wireless companies to waive subscribers’ data charges when they access company-owned services.
The FCC had challenged the practice as a violation of the spirit, if not the letter, of its net neutrality protections. For example, AT&T customers don’t have to pay data charges when they subscribe to DirecTV Now, but do when they subscribe to a rival service such as Dish Network’s Sling TV or Netflix.
FCC Chairman Scraps Plan To Promote Set-Top Box Competition
But Pai says that free-data plans “have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace.”
As a result, the FCC “will not focus on denying Americans free data” and will “concentrate on expanding broadband deployment and encouraging innovative service offerings.”
AT&T SVP of Federal Regulatory Joan Marsh calls the announcement “a win for the millions of consumers who are reaping the benefits of services made available through free data programs.”
The quick decision, coming less than two weeks after President Trump designated Pai as FCC chairman, suggests that “the new FCC will in fact significantly scale back the net neutrality rules,” Cowen and Co’s Paul Gallant says.
Indeed, he adds, Pai might go much farther and empower internet providers to charge subscribers usage based fees — putting a meter on broadband so heavy users pay more than light users do.
“We mention this because Netflix last year asked the Democratic FCC to completely ban [usage based pricing] by wireline ISPs, and to ban ‘unreasonably low’ UBP by wireless carriers,” Gallant says.
In addition to the zero rating decision, Pai rescinded a ban on TV station Joint Sales Agreements (JSAs), designed to prevent strong stations from wielding undue market power. And the FCC’s Media Bureau set aside efforts to investigate complaints that charged several stations with failing to adequately disclose information about buyers of political ads.
The moves cheered the National Association of Broadcasters. It says the JSA restrictions “unfairly punished smaller broadcasters attempting to conserve resources to reinvest in localism and high quality programming.”
The change regarding political ads, the trade group says, indicates that the “appropriate place for consideration of new rules and regulations is at the Commission level and not through orders applying to individual parties.”
The FCC’s lone remaining Democrat, Mignon Clyburn, says that she asked for more than two days to review about a dozen policy changes made today. “We were rebuffed. Then, we simply asked to have the Bureaus comply with the reasoned decision-making requirements of the [Administrative Procedure Act]. No deal. It is disappointing to see this Chairman engage in the same actions for which he criticized the prior Chairman.”
Consumer groups also blasted Pai’s Friday afternoon announcements.
“With these strong-arm tactics, Chairman Pai is showing his true stripes,” Free Pres Policy Director Matt Wood says. “The public wants an FCC that helps people. Instead, it got one that does favors for the powerful corporations its chairman used to work for.
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