Senator Wyden Warns That AT&T's New Merger Poses A Massive Threat To Net Neutrality

As AT&T fires up its lobbyists and various policy tendrils to sell the company's $100 billion (including debt) acquisition of Time Warner, the focus of the conversation has very quickly shifted to net neutrality and zero rating. AT&T already exempts its own content from the company's usage caps, and its DirecTV Now streaming service, launching later this month, is expected to follow suit. Once AT&T acquires Time Warner and its various properties (HBO, CNN), the worry is that this content will also get a leg up by being cap-exempt, creating an unlevel playing field for competing content and streaming services.

Senator Ron Wyden this week made it abundantly clear that he sees the new AT&T merger as a significant threat to net neutrality. In a letter to FCC boss Tom Wheeler (pdf), Wyden specifically points to AT&T's ever-expanding usage caps and the practice of zero rating as "anti-competitive practies that harm consumers" and small businesses alike:

"I am deeply concerned that if AT&T acquires Time Warner's content, the new mega-company will have incentives to prioritize its own content over content created by small business, independent artists or by its rivals."

As we've noted more than a few times, Wyden also highlights how usage caps are arbitrary and unnecessary constructs in the first place:

"Nearly all data caps, and particularly those attached to wireline broadband plans, have nothing to do with network management and everything to do with profiting from an ever-more-consolidated broadband market. Data cap plans that zero rate data at the discretion of the ISP violate the principle of net neutrality by creating an internet where one bit is favored over another bit absent user control...I am deeply concerned that if AT&T acquires Time Warner's content, the new mega-company will have incentives to prioritize its own content over content created by small business, independent artists, or by its rivals."

The problem, as we've long noted, is that while the FCC passed net neutrality rules last year, it failed to prohibit zero rating, and has yet to take any meaningful stand on usage caps. Usage caps aren't just price hikes on uncompetitive broadband markets, they're incredibly effective at giving incumbent ISP content a leg up in the market using zero rating. And while the FCC claimed it would be launching an "informal information exercise" to examine the negative repercussions of caps and ratings, that inquiry has resulted in jack shit in terms of actual enforcement.

As a result, we've now got AT&T, Comcast and Verizon all using caps to give their own content an unfair advantage, while Sprint and T-Mobile happily sell "unlimited" data plans that throttle games, music, and video unless consumers pay a premium. The FCC's failure to ban these peripheral behaviors, as we warned, opened the door to all of this, and AT&T's new mega-merger has the potential to take the problem to an entirely new level.

Wyden was quick to note on Twitter that he'll introduce legislation if the FCC fails to act:

Should it be necessary, I will introduce legislation to protect consumers & the open internet. #NetNeutrality #ATTTimeWarner

- Ron Wyden (@RonWyden) November 1, 2016

The problem is that in a nation where the majority of consumers don't even know what a gigabyte is, zero rating is simply too confusing. Most consumers (and many reporters) still labor under the illusion that zero rating gives them something for free, ignoring that usage caps are an entirely arbitrary construct layered on top of what's already some of the most expensive wireless data rates in the developed world. Without consumers understanding how anti-competitive usage caps and zero rating truly are, there's less political pressure to do something about it -- which is why the FCC continues to twiddle its thumbs on the sidelines.

The debate over the AT&T merger is thankfully bringing this entire conversation to the foreground, but it's also going to be a wonderful opportunity for AT&T, its lobbyists, and loyal politicians to confuse consumers even further.

Permalink | Comments | Email This Story