Innovative or unfair? Better to play it safe if you don’t know.
FCC Commissioner Michael O’Rielly this week said the Commission’s indecision on zero rating is putting a damper on experimentation within the telecommunications industry.
In comments delivered at the International Bar Association Conference, O’Rielly said the FCC’s decision to initially embrace zero rating only to turn around and launch an investigation into the offerings has led to uncertainty in the market. As a result, he said, zero rating offers “live under a perpetual cloud of doubt” that causes innovative offers to be shot down by cautious counsel.
“These services live under a perpetual cloud of doubt where the Commission can dictate – apparently at any time – that the provider terminate the offering and, adding insult to injury, potentially be sent to the FCC’s Enforcement Bureau for staggering penalties. What may be even worse is that these companies would have to turn to their consumers to explain that the offering that they use is no longer available to them,” O’Rielly said.
“This is clearly not a structure that leads to experimentation and innovation,” he continued. “It is never a good thing when lawyers are dictating technology winners and losers, no offense to the lawyers in the room.”
As O’Rielly pointed out, the FCC currently reviews zero rating and sponsored data offers on a case-by-case basis under the Open Internet Act’s “general conduct standard.”
While O’Rielly said the current system was better than an outright ban, he said he warned the Commission of the repercussions of such a “mother-may-I approach to regulation.”
“Clearly, it’s impossible for companies to keep in compliance and avoid regulatory ‘flags’ when the overall game is not explained in advance,” he said.
Despite the uncertainty, though, the major U.S. wireless carriers appear to be carefully pushing forward with zero-rated sponsored data offerings. T-Mobile led the way with its Music Freedom and Binge On services, and was joined by Verizon and AT&T’s sponsored data offers as well as a zero-rating offer from Sprint during the Copa America soccer tournament.