FCC not to investigate Netflix throttling of some mobile consumers

The Netflix logo is shown in this illustration photograph in Encinitas, California October 14, 2014. REUTERS/Mike Blake

WASHINGTON (Reuters) - Video provider Netflix did not violate any U.S. regulations when it “throttled” the picture quality for AT&T and Verizon wireless customers and the FCC has no plans to investigate, FCC chairman Tom Wheeler said on Thursday.

Wheeler said Netflix’s conduct was “outside” the FCC’s net neutrality rules adopted last year, because the FCC is not regulating “edge providers” or websites. Asked if the FCC had authority to investigate, Wheeler said that this “is outside the open Internet” order by the Federal Communications Commission.

Last week Netflix acknowledged degrading the picture quality for AT&T and Verizon mobile users because of data caps.

Ken McEldowney, executive director at advocacy group Consumer Action, said Netflix actions “demonstrate a complete lack of transparency with customers, but the news is also confusing: Netflix settings have long allowed users to choose their own preferred balance of picture quality vs. data usage.”

He added that “most consumers that encounter video playback issues are likely to unfairly place the blame on their broadband providers.”

Last week, AT&T Senior Executive Vice President Jim Cicconi criticized Netflix. “We’re outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent,” Cicconi said.

Netflix didn’t return a message seeking comment.

Netflix told The Wall Street Journal last week it had taken the actions for more than five years to “protect consumers from exceeding mobile data caps.”

Wheeler was asked if Netflix actions were pro-consumer, but he declined to venture an opinion.

Reporting by David Shepardson; Editing by James Dalgleish and Sandra Maler