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Trump's New FCC Chairman Closes Zero-Rating Probe: Net Neutrality On Life Support

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Net neutrality could be in danger with Ajit Pai now at the helm of the Federal Communications Commission, as the Trump administration has a different strategy.

U.S. President Donald Trump appointed Pai as the chairman of the FCC on Jan. 23, sparking concerns that the Trump administration is keen on eliminating important regulations set under the Obama administration.

Concerns of a net neutrality erosion soon intensified and it now seems they were right, as Pai is taking the FCC in a different direction.

FCC Zero-Rating Investigations Closed

Former FCC Chairman Tom Wheeler started investigating the fairness of Verizon, AT&T, Comcast and T-Mobile's zero-rating practices, assessing the data cap exemptions in a bid to determine and minimize the potential negative effects they might have on the market.

Wheeler left the FCC in late January, after expressing concerns about Verizon and AT&T's zero-rating practices that could violate the Open Internet Order that set the ground for the 2015 net neutrality rules.

In his first days in office, the new FCC chairman has now closed the probe into internet companies' zero-rating practices, no longer investigating whether they violate the Open Internet Order or have negative effects on the market. Verizon, T-Mobile, AT&T, Comcast and others are now off the FCC's radar.

Pai notes that Wheeler's investigations will not have any effect on future legislation, and zero-rating practices actually enhance competition in the market rather than stifle it. According to the new FCC chief, the Commission will not interfere in Americans' "free data."

Why It Matters

For those unfamiliar with the matter, here's the deal. Zero-rating refers to internet service providers and mobile providers' deals to exempt specific content from counting against users' data limits. This exemption is often in exchange for capping the internet speeds users can get for that content. Most of the major mobile carriers in the United States offer zero-rating deals.

The FCC under Tom Wheeler was not against zero-rating per se, but it wanted to avoid giving ISPs too much power over the content their subscribers can access and, ultimately, hurting competition by having unfair control.

Just last month, the FCC criticized AT&T and Verizon for violating net neutrality rules, but Pai has now announced that the FCC has no plans of moving forward with its investigation. This, in turn, could have worrisome consequences.

Big Players Getting Bigger

"When the ISP has sole control over what content sources are eligible for zero-rating, it becomes a de facto internet gatekeeper: its choices around free bandwidth can bias its customers' internet usage toward certain sites and services," the Electronic Frontier Foundation points out.

Should this occur, it could be extremely difficult for new services to get started. For instance, innovative services that would aim to deliver a new video streaming option would have a real challenge in convincing users to adopt their service when they can get zero-rated access to established competitors such as Netflix and YouTube.

At the same time, in some cases, it gets even deeper. AT&T, for instance, owns DirecTV, for which it offers zero-rated access. The FCC previously fought to have AT&T treat DirecTV the same as it would any other video service. With the investigations now dropped, that would no longer be the case.

With Pai's decision to close the investigations into zero-rating practices, the future of net neutrality seems compromised. Big players will get bigger, while smaller ones will have an increasingly tough time staying in the game. Is net neutrality dead? Maybe not yet, but it's on life support.

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