U.S. telecommunications regulator closes 'sponsored data' probe

Fri Feb 3, 2017 6:05pm EST
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By David Shepardson

WASHINGTON (Reuters) - The U.S. telecommunications regulator said on Friday it was closing inquiries into sponsored data programs and TV services offered by AT&T Inc, Verizon Communications Inc (VZ.N: Quote), Comcast Corp (CMCSA.O: Quote), T-Mobile USA Inc (TMUS.O: Quote) without taking any action.

Under the Obama administration, the Federal Communications Commission had sent letters raising concerns about whether some data practices by AT&T and Verizon violated net neutrality rules. The FCC had also sent letters to Comcast about its "Stream TV" service and to T-Mobile about its "Binge On" service in 2015.

Millions of mobile phone users benefit from free data video services but critics warn that the practice may prod users into avoiding competitors' services. Net neutrality rules imposed by the FCC in 2015 require broadband providers to treat all data equally and bar service providers from slowing consumer access to web content.

Tom Wheeler, who was FCC chairman until Jan. 20, told Reuters last month that its investigation found some free data practices were abusive and anticompetitive.

But in an about-face on Friday, the regulator now under Republican control said it was closing its investigation.

"These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace," new FCC chairman Ajit Pai said in a statement.

Sponsored or zero-rated free data programs allow mobile phone users free data if they use certain video services. AT&T phone subscribers can watch DirecTV, which is owned by the company, on their phones without incurring data charges. Verizon also offers mobile phone subscribers some sponsored "go90" video content that does not count against data caps.

In a Jan. 11 report, the FCC's wireless bureau said Binge On did not violate net neutrality rules, but it found concerns with AT&T and Verizon's data programs.   Continued...

People walk past the AT&T store in New York's Times Square, June 17, 2015. REUTERS/Brendan McDermid