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Jan 13, 2017 08:57 AM EST

AT&T and Verizon's Zero-Rated Services Violates Net Neutrality And Harms Consumers [Video]

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In early December 2016, Jon Wilkins, FCC chief of wireless telecommunication sent separate letters to AT&T and Verizon noting that their zero-rating policies are in violation of the FCC's Open Internet Order, otherwise known as, net-neutrality rules. Both companies replied citing that their programs are "pro-consumer."

Outgoing FCC chair Tom Wheeler released a recent report stating AT&T and Verizon's practices harmed streaming rivals that eventually trickles down to consumers. Wheeler particularly singled out AT&T's Sponsored Data service, which stated that the service unreasonably interferes with rival services ability to compete against AT&T's affiliate, DirectTV, Engadget reported.

The report focused on sponsored data programs that allow companies to pay carriers to exempt their data from customer's data caps. Once paid, their data is given a zero-rating, which does not eat up users data allotment once they avail of the content.

Said programs have always been controversial but have recently become more urgent as carriers began buying into media companies at the same time offering new mobile video packages aggressively. The FCC cites many of those packages are simply not fair, according to The Verge.

However, T-Mobile was spared from the scrutiny since it does not own a streaming content service unlike Verizon with Go90 and AT&T now DirectTV. The FCC particularly singled out AT&T since its purchase of DirectTV gives it an unfair advantage for it will definitely cost AT&T less than to third-party providers to have their content zero-rated on AT&T.

AT&T insists that their service is beneficial to consumers while Verizon said they are still reviewing the FCC's inquiry. Accordingly, Verizon says they are confident their practices are good for consumers, citing they are non-discriminatory and are consistent with current rules.

The FCC's biggest beef with AT&T's Sponsored Data plan is how much the company is charging rival streaming services for access to its data network. Citing AT&T's DirectTV Now is priced so aggressively, the FCC how other video streaming companies could possibly compete.

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