Facebook Net Neutrality Set Back, Verizon Tests Regulatory Waters
In a closely-watched test case of net neutrality rules in emerging markets, India’s telecom regulators dealt Facebook ( FB ) a blow on Monday, deciding that wireless service providers may not engage in deals that subsidize content as part of free mobile-data programs. The decision from the Telecom Regulatory Authority of India (TRAI) impacts Facebook’s “Free Basics,” which provides mobile users free access to a text-only version of the social network firm’s Web content. India’s wireless firms have six months to phase out data plans that charge different rates for Web access, depending on the content. Facebook said in a statement that it’s “disappointed with the outcome.” In the U.S., the Federal Communications Commission last year extended net neutrality rules to wireless networks for the first time. Internet service providers are challenging the FCC’s rules in federal court. A court decision is expected in April. Net neutrality rules bar ISPs from throttling, blocking or prioritizing Web traffic. Verizon Communications ( VZ ) on Friday said that videos on its new Go90 mobile service will not count against data plans for its postpaid wireless subscribers. Verizon’s move “highlights how mobile video has become the new frontline in wireless competition and could hasten the convergence of the cable and wireless industries,” said UBS analyst John Hodulik in a research report published on Monday. “The FCC will surely look hard at this strategy,” he added. Verizon also recently launched its FreeBee sponsored-data program. Under the FreeBee business model, companies would pay Verizon a fee so that users of their wireless apps could access Web content without their data consumption counting toward monthly limits. Verizon’s introduction of the FreeBee service follows a T-Mobile US ( TMUS ) rollout of the “Binge On” video streaming service. Binge On exempts apps such as Netflix ( NFLX ) and Time Warner ‘s ( TWX ) HBO from monthly data caps. T-Mobile’s Binge On, however, does not involve payments from content companies to T-Mobile. With FreeBee, content companies pay for their traffic to be exempted from monthly data limits.