U.S. regulator says telcos’ zero-rated services may harm unaffiliated OTT providers.

The U.S. Federal Communications Commission (FCC) late on Wednesday published a report repeating its accusation that certain zero-rated services offered by AT&T and Verizon violate net neutrality rules.

The telco watchdog also examined T-Mobile US’s zero-rated Binge-On video service and concluded that it probably doesn’t break the rules.

The same cannot be said for AT&T and Verizon though.

In its report, the FCC said that AT&T’s Sponsored Data service, which lets customers use participating OTT services without eating into their data allowance, "presents competitive problems and, to date, nothing in AT&T responses to the [Wireless Telecommunication] Bureau’s (WTB’s) requests for information has addressed our concerns. Based on the information gathered to date, we believe there is a substantial possibility that some of AT&T’s practices may violate the General Conduct Rule."

The General Conduct Rule is a section of the FCC’s net neutrality rules that prevents telcos from unreasonably disadvantaging online service providers’ ability to make content, applications, and services available to end users.

One of the big issues the FCC has is that AT&T offers zero-rated access to its mobile video streaming service, DirecTV Now, and charges rival services far more for access to Sponsored Data than the cost of actually providing the service.

"Thus, it would appear that AT&T’s practices inflict significant unreasonable disadvantages on edge providers and unreasonably interfere with their ability to compete against AT&T’s affiliate," the FCC said.

The FCC drew a similar conclusion about Verizon’s FreeBee Data 360 scheme, which offers OTT companies that compete with its Go90 mobile video service the opportunity to cover the cost of a consumer accessing their service, app or Website.

"We are aware of no safeguards that would prevent Verizon from offering substantially more costly or restrictive terms to enable unaffiliated edge providers to offer services comparable to Verizon’s Go90 on a zero-rated basis," the FCC said. "And we have no data to confirm Verizon’s unsupported assertion…that the FreeBee Data 360 sponsored data programme offers third parties prices and terms equivalent to the economic net cost by Verizon to zero-rate its affiliated Go90 video service."

In contrast, T-Mobile’s Binge On service does not pose a problem as far as the FCC is concerned, because "T-Mobile does not charge edge providers or end users to participate in or use Binge On."

However, with FCC chairman Tom Wheeler due to step down once Donald Trump takes office, and with net neutrality opponents among Trump’s FCC transition team, it is unlikely that the FCC’s report will make any difference.

Such was the view put forward in a statement from dissenting FCC commissioner Ajit Pai.

"This report, which I only saw after the FCC released the document, does not reflect the views of the majority of commissioners," he claimed.

"Fortunately, I am confident that this latest regulatory spasm will not have any impact on the Commission’s policy-making or enforcement activities following next week’s inauguration," he said.