FCC will not investigate the throttling charges against Netflix since it is not covered by net neutrality rules, the agency said.
Tom Wheeler, FCC chairman, explained that the agency does not regulate "edge providers" or websites and that conducting an investigation goes beyond its open Internet order.
Last week, Netflix confirmed it is throttling video speeds of AT&T and Verizon users, which negated previous accusations to the carriers about the quality of Netflix videos their subscribers get.
According to Netflix, it has been throttling video quality for more than five years, which resulted in limiting the video quality on major wireless carriers worldwide. Netflix defended the move by saying it was protecting subscribers from exceeding the allotted mobile cap on their data plans.
Ken McEldowney, executive director of the advocacy group Consumer Action, said that Netflix's actions showed the company's total lack of transparency with customers. He added that the news is also confusing because Netflix settings had always provided users with the ability to choose between the quality of video and data usage.
Jim Cicconi, AT&T's senior executive vice president, said that the carrier was outraged after learning that Netflix had deliberately throttled the video quality of the company's subscribers without their approval or knowledge.
Netflix said that watching two hours of HD video would eat up to 6 GB of data which is equivalent to the total allowed monthly data for Verizon subscribers who are under the carrier's $80 monthly plan.
The company also noted that mobile networks are notorious for charging their subscribers unreasonably for going beyond the limit of their data plan. Netflix said that those who use their mobile devices in viewing video content are at a disadvantage state.
Anne Marie Squeo of Netflix said that restrictive data caps are not good for consumers and added that the standard bit rate for mobile video streaming is at 600 kilobytes for every second at the most.
Netflix, as a content provider, has the liberty to decide on outlining its policies, separate and irrespective of data plan carriers.
In order to provide users more control of their Netflix experience, the streaming service will launch an update in May that allows subscribers to choose between high picture quality that would incur heavy data usage or low picture quality with low data usage.