Meddling FCC Doesn’t Want You to Have Free Mobile Data

Katie McAuliffe Executive Director, Digital Liberty
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The FCC is more concerned with protecting its own limited worldview than with what is good for consumers.

Competition means that if a new idea rises to the surface and is better than the previous thought, minds can change, business models can adjust, and products can adapt – that is innovation.  But protecting specific competitors and a specific view of the future locks us into where we are now – that is stagnation.

If the FCC were really concerned with consumers, then they would allow the market to test ideas and business models.  Not attack plans to give consumers free data.   Free data plans are also called zero-rated plans because customers don’t have to pay out of their data bucket for the month. Therefore customers pay zero dollars and zero data, hence zero rates.

The exemption of some content from data caps helps make cellular data more accessible to many Americans who would otherwise have trouble affording it. Many Americans now depend on their data plans for TV, internet, and other vital services that keep them informed and connected. Free data plans aren’t just about more entertainment.  They also extend a lifeline to lower income Americans to ensure they have the tools they need to advance themselves in society.

In its earliest stages, there are already competing free data plans across the various wireless networks. T-Mobile offers “Binge On,” Verizon has “FreeBee Data,” AT&T will offer “Sponsored Data“, and Sprint added its “Unlimited Freedom” program. Consumers already have choices when it comes to this policy, and options are sure to grow.   If the FCC doesn’t get in the way.

For some reason, the FCC thinks that giving customers more of what they want for free is bad.  The Commission is calling it anti-competitive.  The wealth of competition in the communications markets is forcing companies to give consumers what they want for lower prices.  Some companies are even willing to pick up the tab themselves. This doesn’t sound anti-competitive.

AT&T’s proposed merger with Time Warner Inc. has raised the same siren calls from bureaucrats and politicians alike to extend an interventionist hand into the market. Like the DirecTV merger before it, AT&T is not merging with a competitor, but with a content provider. Any claim that it is anti-competitive is a significant reach.

What set the FCC off was AT&T’s recent roll out of their DirecTV Now program, which lets consumers on the network stream DirecTV with no penalty to their monthly data limit.

To assuage anti-competitive fears, AT&T and DirecTV complied with a series of regulations that would ensure there would be no favoritism to distort the market. The result is a program that provides a budget-friendly alternative for many consumers.

Yet, the FCC continues to push for regulation that could put an end to free data for consumers.

DirectTV Now is part of a subscription service.  In order to access it on your phone, you have to be a subscriber – just like you have to be a Comcast subscriber to get to Comcast content on mobile devices.  If you don’t subscribe to at least the base level for $35 per month, then AT&T wireless customer or not, the data isn’t free because you don’t have access to the programing platform.

Giving away data does not detract from the available data available to consumers.  It adds to it.

Now there is more overall data for consumers to spend.  Just because a video stream on DirectTV Now might be free of data charges, doesn’t mean consumers will stop watching other streams from other providers like Netflix.  More likely than not, it will mean consumers watch more.

From my own experience, I used to have a capped data account.  As a consumer without a wired internet connection at home, I budgeted my data usage. I stopped streaming SiriusXM and made sure I downloaded my podcasts and audible books on open WiFi networks.  I switched to a carrier with a free data program, and was pleasantly surprised to find the SiriusXM data is free.  I have it on constantly now and have more data for other cites.  I haven’t hit an overage charge yet.

In the above scenario competition wasn’t based on content it was about the amount of data I could use.  There are so many different competitive levels for these carriers:  price, data allowances, subscriptions, content, devices, etc.  The ways these carriers find to compete keeps growing, and consumers end up with more choices.

All free data programs are sure to be a boost for consumers hoping to avoid costly overage fees.

The market will continue to adapt, and the competitive nature of our free market will ensure that other companies will develop their own innovations to try and be a more attractive alternative. This jockeying to be the best and brightest will only spur the creation of better, more efficient products for consumers everywhere.

Without sufficient evidence of blatant anti-competitive practices, of which, there are not, there is no need for bureaucrats or politicians to throw a wrench into the progress that is being put on full display. The market is the best defense and advocate for consumers.

Katie McAuliffe is Executive Director of Digital Liberty & Federal Affairs Manager at Americans for Tax Reform