AT&T’s FaceTime policy could violate FCC rules
AT&T's recent announcement that FaceTime over cellular will be reserved exclusively for those customers who switch to the company's new Mobile Share plans is sure to ruffle a few feathers, and some say it might even be in violation of the FCC’s Open Internet rules.
Matt Wood, policy director for Free Press, made just that case in recent comments. Wood said in a post on Free Press’s website that AT&T's tactics are designed with one goal in mind: "separating customers from more of their money each month by handicapping alternatives to AT&T's own products."
"If customers want to use FaceTime on AT&T's mobile network, then they have to buy a more expensive monthly data plan with extra voice minutes and texts they'll never use thrown in," Wood wrote. "Blocking mobile FaceTime access for much of its user base may be a win for AT&T, but it's a losing proposition for the rest of us."
Wood said it's not supposed to be this way, claiming that customer protections in place today for wireless players are too weak, but that they are strong enough to block carriers from doing exactly what AT&T is proposing with FaceTime.
"The FCC's rules prohibit such blatantly anti-competitive conduct by wireless companies," Wood writes. "Such behavior would be a problem no matter what Internet platform you choose. It would be unimaginable on your home broadband connection. Apple's FaceTime comes pre-installed on a Macbook Pro, too, but no home broadband provider would dream of blocking the app there unless you'd signed up for a more expensive data plan."
In the end, Wood makes the claim that AT&T's bold move to block FaceTime would never fly if the wireless marketplace had “real competition.”
“Instead, we have Ma Bell's twin offspring running amok and forcing consumers onto ridiculous plans that make them pay for the same data twice. It's only going to get worse until lawmakers recognize the problem and act to solve this competition crisis," Wood contends.
The FCC is keeping a close watch on how wireless carriers are monitoring, and in some cases, filtering the services and apps that run over their spectrum.
The Commission adopted a set of consumer protections in the auction of Verizon’s upper 700 MHz C-block spectrum, which it uses for LTE, saying that it “shall not … deny, limit or restrict the ability of their customers to use the devices and applications of their choice on the network.
In the face of those rules, Verizon decided to go ahead and charge customers $20 a month for the use of tethering applications, essentially charging their customers twice for the use of their data.
Free Press filed a complaint recently with the FCC, saying that Verizon was violating FCC rules by restricting their customers' use of an application. At the end of July this year, the FCC agreed and slapped Verizon with a $1.25 million fine and ordered it to quit blocking tethering apps completely.
FCC Chairman Julius Genachowski said the ruling indicates that compliance with FCC obligations is not optional.
"The open device and application obligations were core conditions when Verizon purchased the C-block spectrum," Genachowski wrote. "The massive innovation and investment fueled by the Internet have been driven by consumer choice in both devices and applications. The steps taken today will not only protect consumer choice, but defend certainty for innovators to continue to deliver new services and apps without fear of being blocked.”
AT&T currently charges for tethering, but those rules that bind Verizon do not apply to AT&T’s spectrum.
John Bergmayer, senior staff attorney of Public Knowledge, said AT&T's FaceTime policy is in violation of the FCC's Open Internet rules.
"These rules state that mobile providers shall not 'block applications that compete with the provider's voice or video telephony services,'" Bergmayer wrote. "Although carriers are permitted to engage in 'reasonable network management,' there is no technical reason why one data plan should be able to access FaceTime, and another not."
Bergmayer conceded that over-the-top communications services are a threat to carriers' revenue, but he said they should respond by competing with these services and not by engaging in discriminatory behavior.
In an interview with Wireless Week, Bergmayer said he still questions AT&T’s tethering charge, and with its FaceTime policy, the carrier is just being a little bit more subtle in its policy.
“When they’re called out on it, they’re responding with a bit of misdirection. They’re saying, ‘Well, it’s available to everyone on Wi-Fi.’ That’s all good and fine, but that has nothing to do with AT&T. I don’t need their permission to use Wi-Fi,” he said.
Bergmayer said that if AT&T were to block FaceTime entirely, that might bolster a claim that the decision to block that app was made in the interest of “reasonable network management,” which is an exception allowed by the FCC rules.
“I think that’s a harder argument to make here. Because I don’t think they could say that it would be reasonable network management to block Netflix for everyone whose social security number starts with an odd number. Sure, that would reduce the number of people using Netflix, and I guess it would save you some bandwidth, but the question is is that ‘reasonable network management’? I would say no,” Bergmayer said. “If you’re going to allow the app by anyone, with any kind of plan, it’s very hard for you to say there’s any kind of bandwidth justification.”
That said, Bergmayer figures AT&T’s core motivation for doing this is to provide yet another incentive to push people onto its new plans.
“A lot of people have held onto their unlimited plans, and they don’t like that, so I think they would very much prefer that people were on Mobile Share plans. This is one way of doing that,” he said.
Verizon is remaining mum on its policy around FaceTime, and it might do well to just go ahead and allow the service over cellular, but then again, maybe it's thinking twice about protecting its CDMA network from that kind of traffic.
Sure, the company has already deployed LTE over nearly 75 percent of its 3G footprint, but not all of its iPhone customers are going to be toting an LTE-capable iPhone 5; there will still be a whole lot of iPhone 4 and 4S inventory connecting, as well, and those devices are running on 3G.
On the whole, Verizon and AT&T's pricing plans are almost identical, right down to the monthly device connection fees. Both carriers are looking to migrate as many customers as possible to the new data-centric shared plans, which is where the revenue is generated.
Holding back services likes FaceTime and video streaming could be billed as "differentiators" that will slowly move users toward these new plans, but then they could also be viewed as unfair policies that are in violation of FCC rules. The industry will be watching to see whether significant opposition surfaces to policies like AT&T’s FaceTime rules.
Both AT&T and Verizon Wireless declined to comment.