The Federal Communications Commission will keep a watchful eye on AT&T’s sponsored-data offering, but it is not ready to pass any quick judgments.
AT&T announced a new offering Monday at the Consumer Electronics Show in Las Vegas that allows brands to subsidize data used by consumers to view their sponsored content. The announcement provoked an instant reaction among network-neutrality advocates who fear it will create an unlevel playing field.
“The announcement of a sponsored-data program by AT&T puts it in the business of picking winners and losers on the Internet, threatening the open Internet, competition and consumer choice,” Rep. Anna Eshoo. D-Calif., said.
But the FCC wasn’t so quick to judge. The five commissioners addressed the issue carefully in two separate panels at the electronics show on Wednesday.
FCC Chairman Tom Wheeler said “we are ready, willing, and have legal jurisdiction to intervene,” but wants to see how AT&T’s offering will develop first.
“My attitude is let’s take a look at what this is. Let’s take a look at how it operates,” Wheeler said. “If it interferes with the operation of the Internet, if it develops into an anticompetitive practice, if it does have some kind of preferential treatment, then that is cause for us to intervene.”
The four commissioners reiterated Wheeler’s prudent approach.
“I don’t want to pass regulatory judgment right now,” said Democratic Commissioner Mignon Clyburn, who served as acting chairwoman for six months until Wheeler’s confirmation in November.
Ajit Pai and Mike O’Reilly — he two Republican commissioners — were unsurprisingly hesitant to make any judgment calls.
“We need to let things develop,” agreed Pai. “The FCC shouldn’t a priori declare business models out of bounds.”
The legality of Open Internet Order — established by the FCC in 2010 to codify the principle that all Internet traffic should receive equal treatment — is being challenged by Verizon in a federal Appeals Court. It is widely believed that the D.C. Circuit Court’s decision is imminent, and many experts expect the court to strike down part or all of the open Internet rules.
The FCC’s Internet nondiscrimination rules only apply to Internet traffic and do not extend to wireless broadband, but the principle holds.