When AT&T recently announced it will attempt to acquire Time Warner, the news fired up a debate over zero-rating. While zero-rating technically doesn't go against the current net neutrality rules in place in the US, one could argue that it goes against the spirit of those regulations. Namely, the existing framework regarding net neutrality prevents Internet service providers from favoring certain data sources over others in a manner that discourages consumers from accessing the latter. Because of that, there are currently many voices arguing that zero-rating undermines the very substance of net neutrality rules and pleading for the Federal Communications Commission (FCC) to prevent the said merger.
That debate prompted the FCC to send a letter to AT&T earlier this month. In the letter, the FCC raised some concerns regarding the company's current zero-rating practices pertaining to DIRECTV, a video streaming service acquired by the second largest wireless carrier in the country in 2015. Today, AT&T responded to these inquiries and as The Wall Street Journal reports, the Dallas-based telecom giant claimed that zero-rating its own video streaming service is both perfectly in line with existing laws and beneficial to consumers. As Robert Quinn, Senior Vice President of External & Legislative Affairs at AT&T put it, zero-rating practices "are precisely the kind of pro-consumer challenges to cable [TV providers] that the Commission heralded in approving AT&T’s acquisition of DirecTV."
Quinn also pointed out that the telecom company has been offering its zero-rating service to all video streaming companies since 2014, even before it completed the DIRECTV acquisition, adding that all of DIRECTV competitors can still get their service zero-rated by AT&T at the same cost DIRECTV does. For the uninitiated, this controversial practice entails not counting data costs incurred by certain Internet services towards users' monthly data cap. And while one could certainly argue that zero-rating isn't as consumer-friendly as Quinn claims it is, AT&T's policy chief certainly has a point when he brings up the company's acquisition of DIRECTV approved by the FCC last year. Namely, by allowing that transaction, the FCC has set a precedent that likely won't be easy to ignore if the Commission now changes its stance over zero-rating and AT&T chooses to go to court over that hypothetical decision.
Of course, this debate is all the more relevant in light of the fact that the Dallas-based wireless carrier is now trying to acquire Time Warner, one of the largest media producers in the country. However, the incoming Trump administration is appointing at least two new Commissioners next year which may make that difficult for AT&T, as the President-elect has previously stated that "deals like this destroy democracy." On the other hand, Jeff Eisenach, an industry expert recently appointed by Trump to help transition the FCC under the new administration has a history of advocating for major media mergers and has even supported a theoretical merger between Comcast and Time Warner back in 2013. In other words, only time will tell what happens next.