FCC Expanding Zero-Rating Probe To Look at New Verizon Service, Wheeler Says

“We’re right now in a process of gathering information,” Wheeler said during a news conference after the FCC meeting. Wheeler said the probe is at the bureau level now. “I’m not at these meetings,” he said. “Nobody from the office of the chairman is at these meetings. It’s gathering information and we’ll see what happens from there.”

Commissioner Ajit Pai said during a separate news conference that he continues to believe the zero-rating investigation is “wholly unnecessary.” Pai said Wheeler in November (see 1511190045) “blessed” T-Mobile’s Binge On plan as “highly competitive and highly innovative.” Commissioner Mike O’Rielly agreed with Pai. “This is exactly what we predicted when we talked about the net neutrality item in regards to the 'mother-may-I' situation,” he said. O’Rielly said he's trying to gather information from the FCC “inquisitors” who are conducting the probe: “We’re trying to understand what their process is and understand where they plan to go.”

Chris Lewis, Public Knowledge vice president-government affairs, and Walter McCormick, president of USTelecom, discussed zero rating during an episode of C-SPAN’s The Communicators, scheduled to be televised this weekend (it will be online here). PK has particular concerns about Comcast’s and AT&T’s zero-rated offerings, since neither is tied to reducing network congestion, Lewis said. “We’re watching it closely,” he said. “We’ve written on zero rating … and in studying it we felt that the FCC needed to take a strong look at it and learn more about how companies are applying these practices."

The big question before the FCC on zero rating is “who should bear the costs of the Internet,” McCormick said. “We believe that all of the costs should not necessarily simply be borne by the end user.” The FCC’s role is to protect the consumer, he said. “This should be looked at from the standpoint of the consumer.” PK cares about consumers but is concerned that zero rating will lead to the creation of a two-tier Internet, Lewis replied.

USTelecom is “very optimistic” that the U.S. Court of Appeals for the D.C. Circuit will overturn parts of the FCC net neutrality order, McCormick said elsewhere in the segment. “The court understood that no one was opposed to open Internet standards,” McCormick said. “There weren’t even any questions about whether or not there should be open Internet standards.” The questions from judges focused on central issues of FCC authority raised by industry, McCormick said. “First of all, does an agency have authority to just determine what the scope of its jurisdiction is going to be?” he said. “Does it need to get that delegation from the Congress?” USTelecom believes that, based on the questions asked, “the court was zeroing in on the real, key legal issues,” he said.

Lewis disagreed, saying 4 million people weighed in in favor of net neutrality rules. PK was encouraged by questioning from Judge David Tatel in particular, who asked whether questions about the FCC ability to change its mind hadn’t already been settled, Lewis said.

“There are a lot of folks who are watching this and wanted to make sure that the Internet remained open,” Lewis said. ISPs are rolling out a lot of “business methods,” and they “need to be tested against these basic Internet principles,” he said. If Congress addresses net neutrality, it should be aware of unintended consequences, Lewis said. “There are basic values around communications networks that need to be protected."

A problem with the net neutrality rules is that companies are forced to seek advisory opinions from the Enforcement Bureau whenever they offer a new, innovative service, McCormick said. “This is the kind of 'mother-may-I' approach to innovation that we wanted to see to avoid with regard to the Internet."