Now that the US District Court has affirmed the net neutrality ruling in its entirety it’s worth considering where the FCC will go next. Up until now it’s been clear that they have been somewhat tentative about strongly enforcing net neutrality issues since they didn’t want to have to reverse a year of regulatory work with a negative court opinion. But there are a number of issues that the FCC is now likely to tackle.
Zero-Rating. I would think that zero-rating must be high on their list. This is the practice of offering content that doesn’t count against monthly data caps. This probably most affects the customers in the cellular world where both AT&T and T-Mobile have their own video offerings that don’t count against data caps. With the tiny data caps on wireless broadband there is no doubt that it is a major incentive for customers to watch that free content, and consequently drive ad revenues to their own carrier.
But zero-rating exists in the landline world as well. Comcast has been offering some of its content on the web to its own customers. They claim this is not zero-rating, but from a technical perspective it is. However, now that Comcast has raised the monthly data cap to 1 terabit then this might not be of much concern to the FCC right now.
Privacy. The FCC has already proposed controversial rules that apply to the ISPs and consumer privacy. In those rules the FCC proposes to give customers the option to opt-out of getting advertisement from ISPs, but more importantly consumers can opt-out of being tracked. This would put the ISPs at a distinct disadvantage compared to edge providers like Facebook or Google who are still free to track online usage.
Last year the FCC also started to look at the ‘super-cookies’ that Verizon was using to track customers across the web. This privacy ruling (which is now on a lot more secure footing based upon the net neutrality order) could end the supercookies and many other ways that ISPs might track customer web behavior. Interestingly, both Verizon and AT&T have been bidding on buying Yahoo and this potential privacy ruling puts a big question mark on how valuable that acquisition might be if customers can all opt out from being tracked. I think Verizon and AT&T (and Comcast) all are eyeing the gigantic ad revenues being gained by web companies and this ruling is going to make it a challenge for them to make big headway in that arena.
Lifeline. I think that the net neutrality ruling also makes it easier for the FCC to defend their new plans to provide a subsidy to low-income data customers in the same manner they have always done for voice customers. Now that data is also regulated under Title II it fits right in to the existing Lifeline framework.
Data Caps. At some point I expect the FCC to tackle data caps. It’s been made clear by many in the industry that there are no network reasons for these caps, even in the cellular world. The cellular data plans in most of the rest of the world are either unlimited or have extremely high data caps.
The FCC said in establishing net neutrality that they would not regulate broadband rates. And in the strictest sense if they tackle data caps they would not be. The regulatory rate process is one where carriers must justify that rates aren’t too high or too low and has always been used, as much as anything, to avoid obvious subsidies.
But data caps – while they can drive a lot of revenues for ISPs – are not strictly a rate issue, and in facts, the ISPs hop through a lot of verbal hoops to say that data caps are not about driving revenues. And so I think the FCC can regulate data caps as an unnecessary network practice. It’s been said recently that AT&T is again selectively enforcing its 150 monthly gigabit cap, and so expect the public outcry to soon reach the FCC again, like happened last year with Comcast.