FCC suspends probes of telecommunications firms

FCC suspends probes of telecommunications firms
© Greg Nash

The Federal Communications Commission on Friday suspended its probes into whether thee major telecommunications companies violated net neutrality rules with their data plans.

The FCC's wireless telecom bureau sent letters to AT&T, Verizon and T-Mobile informing them that the probes were over.

The letters are a sign that the FCC is changing under new Chairman Ajit Pai, a Republican who has been a fierce critic of the rules, which generally prevent companies from charging higher prices for speedier net service. 

"Through this letter, I am notifying your company that the [Telecommunications Bureau has closed this inquiry. Any conclusions, preliminary or otherwise, expressed during the course of the inquiry will have no legal or other meaning or effect going forward." wrote acting FCC Telecommunications bureau chief Nese Guendelsberger.

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At issue were so-called zero-rating plans, where internet providers give their customers free data when they use certain apps.

Critics say it violates the principles of net neutrality, the idea that all internet traffic should be treated equally. But companies have defended the plans, saying they are popular with customers and provide them with more options for easily accessing content.

Mignon Clyburn, the lone Democratic commissioner on the FCC, blasted the decision to drop the probes. She also lashed out at Pai for a number of actions he took on Friday afternoon, which she referred to as "take out the trash day."

"It is a basic principle of administrative procedure that actions must be accompanied by reasons for that action, else that action is unlawful," Clyburn said in a statement. "Yet that is exactly what multiple Bureaus have done today. The Bureaus rescind prior Bureau actions by simply citing a rule that allows them to do so, when in prior invocations of that rule there have been oft-lengthy explanations for the reasoning behind the actions."

In his own statement, Pai painted the move as a preview of what to expect under his leadership.

"These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace," Pai said.

"Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.”

The plans were a particular target of former Democratic FCC Chairman Tom Wheeler.

On January 11, with a little over a week left in Obama's presidency, then-Chairman Wheeler issued a report excoriating AT&T and Verizon for their zero-rated plans, also known as sponsored data programs.

That report found that Verizon's FreeBee Data 360 Program and AT&T's Sponsored Data Program Now stifled competition through “potentially unreasonable discrimination in favor of their own affiliates.” AT&T was singled out for a data plan that favored streaming from DirecTV, one of its subsidiaries.

Though scathing, the report was symbolic given that it came just days before the FCC switched to Republican control.

The report was officially retracted on Friday.

Both Verizon and AT&T blasted Wheeler's report at the time. On Friday, they applauded Pai for suspending the probe.

"Today's announcement is a win for the millions of consumers who are reaping the benefits of services made available through free data programs," AT&T's vice president of regulatory affairs Joan Marsh said in a statement. "We're pleased that these innovative products will be able to continue to flourish in the marketplace."

“We’ve always believed that our free data programs like 'FreeBee data' benefit consumers, and we’re very encouraged that the FCC agrees," added Verizon spokesman Rich Young. "We’re quite certain our customers feel the same way, particularly those who plan to watch the big game over the weekend – free of data charges.”

This story was updated at 5:14 p.m.