AT&T and Verizon Wireless are already facing tough market competition from T-Mobile and other industrial competitors. The time seems to be getting tough for both the companies. Regulators in the United States are reprimanding both AT&T and Verizon Wireless.
What is the Story?
Verizon Wireless and AT&T have decided to exempt their own video applications from data caps of their cell phone service users. This is certainly not going to affect the way carriers conduct their operations. Howbeit, agency leaders appointed by Mr. Donald Trump, the President in waiting, are likely to monitor such practices strictly and very closely.
FCC Warned AT&T and Verizon Wireless:
The Federal Communications Commissions warned both of the carriers via letters in this regard on Saturday about the way they conduct and handle the increasingly popular practice known as “Zero Rating”. The FCC is concerned that it will seriously hurt industry competition and many cell phone service subscribers severely. AT&T had been dispatched a warning during the month of November of 2016. In a letter drafted to AT&T on Thursday, the FCC openly said that AT&T’s response did not provide any solution to the concern raised.
FCC’s Concern:
There are a number of other services like Hulu and Netflix that can pay Verizon Wireless and AT&T. This will make sure the customers are able to make use of those applications without any consumption of cell phone data. In accordance with the FCC, this is definitely going to make competition harder and more expensive for internet service providers. In simple words, internet service providers active in the market will surely find it very hard to compete with Video services owned by the carriers. This is likely to be harmful for the market of streaming services.
For Instance:
The FCC estimates that video service providers will be forced to pay the amount of $16 to AT&T on a monthly basis for a cellular phone service user streaming videos for about 10 minutes a day and that is without the consumption of any data. It could even go up to the amount of $47 a month for a user streaming videos for about a half-an-hour a day.
It will become very difficult for rivals to compete in terms of price with the new online TV application Launched by AT&T. This TV app of AT&T is known as DirectTV Now. Customers using this service have to pay the minimum amount of $35 to AT&T. Competing video service providers will have to zero their rates. If they don’t, they will surely face a lot of disadvantage.
Verizon Wireless allows its cellular phone service users to use its go90 video application without any consumption of their cell phone data.
AT&T’s Reply:
Exemption of applications such as DirectTV Now from data caps helps customers save their money. Therefore, the FCC should not try to put a stop to it.
Verizon Wireless Said…
Its practices are beneficial for cellular phone service users. Moreover, the practices are also fully in compliance with regulations.
Final Words:
This warning has come during the final days of Barrack Obama’s administration. Now Mr. Donald Trump, the president Elect, may roll back or enforce such measures with considerable leniency. The FCC still has not been able to determine whether the zero rating practices adopted/conducted by both of these carriers are a problem or not. Both Verizon Wireless and AT&T could appeal.
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