If broadband providers thought that they'd be subject to fewer regulations after the Federal Communications Commission voted in December to jettison its net neutrality protections, they could be disappointed.
California state Senator Scott Wiener on Wednesday introduced a bill that would create a regime in some ways more strict than the Obama-era rules against blocking, throttling, or otherwise discriminating against content. Most important, Wiener's bill, if passed, would in many cases ban broadband providers from exempting certain content from data limits, a concept known as “zero rating.” For example, AT&T would no longer be allowed to exempt its DirectTV Now video-streaming service from its customers' data caps while counting data consumed by competing services like Sling TV. The FCC claimed authority to regulate the practice on a case-by-case basis, but never took formal action against it.
Wiener’s bill is the latest move by state and local officials to create their own net neutrality rules in the absence of federal regulations. Governors in Montana, Hawaii, and New York issued executive orders barring state agencies from doing business with broadband providers that don't promise to uphold net neutrality principles. Washington state, meanwhile, has passed a law banning broadband providers from blocking or throttling content, or from accepting money to prioritize certain sites or services.
These new state-level rules are less sweeping than the FCC's old regulations in some ways. State level net neutrality rules passed thus far haven't addressed zero rating, nor do they address the esoteric interconnection agreements carriers make with each other.
Wiener’s bill explicitly prohibits carriers from using interconnection agreements to circumvent its net neutrality rules, and bans certain types of zero rating. Broadband providers would no longer be able to exempt their own services from data caps, and they wouldn't be allowed to selectively choose to exempt outside services from data caps, regardless of whether those services pay for the privilege or not. That means Verizon would no longer be able to zero rate live streaming National Football League games, even if the NFL doesn’t pay for the privilege.
Zero rating has long been controversial. Proponents argue that zero rating is consumer friendly because it lets customers use more data. Critics argue that it lets carriers pick winners and losers on the internet, which goes against the idea of net neutrality. The Obama-era FCC leaned towards the latter view. Towards the end of former FCC chair Tom Wheeler’s tenure in late 2016, the agency warned AT&T and Verizon, which exempts its Go90 video service from data caps, that their zero-rating practices were likely anticompetitive. But one of the first things Republican FCC chair Ajit Pai did after he was appointed by President Trump was end the agency's investigation into the companies.
The California bill would allow zero rating in some cases. For example, a carrier could exempt a category of apps or services, as long as the exemption applied to all services in that category. T-Mobile's Binge On and Music Freedom, which zero rate a large number of streaming video and music services, might be allowed. T-Mobile claims that all services that meet its technical requirements can be included in the service. The California bill would also allow carriers to zero rate all data under certain circumstances. For example, a provider could let people use unlimited amounts of data at night, but charge for data use during the day.
The bill also leaves open the possibility of offering "fast lanes" for select content, but only at a customer’s discretion. Essentially, a carrier could allow you to pick a few applications to prioritize. For example, if you want to make sure your family's video streaming doesn't cut into your Skype calls, you could, hypothetically choose to prioritize Skype. But it must leave the selections to the customers, and not allow companies to pay for preferential treatment.
Wiener's bill might not pass. And even if it does, it would face a likely legal challenge from the FCC, which barred states from adopting net neutrality rules when it adopted its new regulations in December. But it's a clear and nuanced bill that addresses loopholes and uncertainties in the Obama-era rules as well as edge cases like personalized fast lanes. Other lawmakers could learn from it.