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Netflix Wants the FCC to Do Something About Data Plans

Netflix Partners With SoftBank For Japan LaunchNetflix Partners With SoftBank For Japan Launch
Reed Hastings, founder and CEO of Netflix Inc.Photograph by Ken Ishii — Getty Images

Should the feds do more to oversee how companies deliver the Internet? Netflix says the answer is yes, telling the Federal Communications Commission that it should ban data caps for home Internet and also do something about “zero rating” —a practice in which T-Mobile (TMUS) and other phone companies let consumers watch certain shows free of data charges.

Netflix’s position, which it set out in a filing last week, amount to a wish list of sorts as the FCC gets ready to prepare an annual report for Congress about the state of broadband access in the United States.

According to Netflix (NFLX), broadband caps on home Internet are inconsistent with a part of the Telecommunications Act that calls for advanced telecommunications to be deployed to all Americans “in a reasonable and timely fashion.”

The company points to the growing popularity of “Internet television” to say caps of 300 GB of data per month are impractical, noting that 3.4 hours of HD Netflix use can consume 10 GB of data—meaning it would be easy for a household to blow through its allotted monthly caps. Netflix also claims such caps, which Comcast (CMCSA) is unrolling in a growing number of U.S. markets, are not necessary for technical reasons but are simply a money grab.

While home broadband caps may be a big issue for U.S. consumers affected them, the bigger issue in the Netflix filing is likely to be the “zero rating” one.

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Within the last six months, the big phone carriers have been rolling out a growing number of promotions that let consumers watch certain types of content without depleting their monthly data allotment. But as Netflix points out, these sort of arrangements may be technically illegal since they violate the FCC’s “net neutrality” rules, which forbid internet providers giving special treatment to some types of content over others.

So far the FCC, which already has its hands full in a fight over TV apps, has taken a wait-and-see approach to zero rating but this may get harder as the companies continue to push the boundaries in how they offer content.

“The Commission’s informal policy review into this issue is ongoing. Chairman Wheeler said the Commission would keep an eye on new developments in this area and we are continuing to do so,” said Kim Hart, a spokesperson for the agency.

The Netflix filing, which was spotted by Ars Technica, comes as the FCC prepares its 2017 “Broadband Progress Report,” an annual document required by Congress that typically comes out in late January.