Zero Rating Likely a Question for the Next Administration

Carl Weinschenk
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5 Defining Tech Trends that Will Shape Business

Zero rating -- various approaches that provide subscribers with access to data or content without it counting against their usage charges -- continues to be controversial.

On one hand, proponents say that it is a marketplace structure that is good for business and that produces no real losers. Opponents say that it is more or less net neutrality by another name and that there indeed are losers: The companies that don’t have the money or influence to be a provider of zero-rated services and the people who may have benefited from their products.

Today, the Information Technology & Innovation Foundation released a report that backs zero rating. The piece, written by telecom policy analyst Doug Brake, provides reasons that the programs are good: They advance innovation, expand access to information, are pro-competitive, attractive to consumers, and potentially are “more efficient” for advertising. The piece is general because zero rating is a worldwide phenomenon; the bottom line, however, is that Brake sees a win/win:


These programs are a win for “edge” video providers, who see more use of their products and services. They are also a win for network operators, who are working to gain market share and explore new business models to meet demand. And most importantly, they are a big win for consumers, who end up getting more for less.

This is not a universally shared perspective, of course. Earlier this month, Politico reported that an effort by groups that previously aligned to push for net neutrality has been rolled out to fight zero rating. The groups, which the site says include Fight for the Future, Demand Press and the Free Press, offer a tool that enables consumers to comment to the Federal Communications Commission (FCC) about zero-rating initiatives by AT&T, Comcast, T-Mobile or Verizon. The group had already generated 80,000 more general complaints against the practice.

The issue must be addressed, and sooner rather than later. It is too tempting to carriers to expect it to not grow quickly. Ars Technica reports that last week Sprint became the latest, and last, of the big four carriers to offer zero rating. The carrier will offer the Copa America Centenario, a soccer tournament that begins on June 3, with a zero-rating offer. Sprint, in partnership with soccer streaming service FuboTV, will offer the matches to those who sign up for a 60-day trial membership without it counting against their caps.

It may be that most sides are partly right and that the FCC will rule on a philosophical basis. The proponents of zero rating may be right in that the damage done is not onerous and can be attributed to normal market turbulence. Those against the practice may be right in that it bestows an unfair advantage. It is subjective. Where it ends up likely will be determined by who sits in the White House a year from now.

Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at cweinsch@optonline.net and via twitter at @DailyMusicBrk.



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