Zero Rating Will Be a Big Net Neutrality Issue

Carl Weinschenk
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It will take a long time for the net neutrality rules proposed yesterday by Federal Communications Chairman (FCC) Tom Wheeler to become law.

Gizmodo provides a succinct roundup of the road ahead. The FCC must approve the rules in a vote set for February 26. If that happens, lawsuits will follow. Congress also could step in and pass legislation that differs from what Wheeler announced yesterday. Those laws would supersede what eventually comes out of the FCC. The best way to sum it up is that we are at the beginning of the end.

One issue to watch as the concept of net neutrality, which will cover wired and wireless networks, comes ever-closer to becoming law is how it deals with zero rating (also called positive price discrimination). The idea is pretty simple: A service is made available by a carrier without being charged against the subscriber’s data caps. That free use clearly gives an advantage over those that eat into the individual’s data cap.


Net neutrality also is an issue in Europe. Tim Berners-Lee, who is called “the inventor of the Web,” posted a guest blog dealing with the issue at the site of a player in net neutrality there. Here is part of the commentary, as posted by GigaOm:

If we don’t explicitly outlaw this, we hand immense power to telcos and online service operators. In effect, they can become gatekeepers — able to handpick winners and the losers in the market and to favour their own sites, services and platforms over those of others. This would crowd out competition and snuff out innovative new services before they even see the light of day.

In essence, Berners-Lee is suggesting that zero rating/positive price discrimination can, to at least some extent, undermine the goals of net neutrality because it is an alternative means of favoring one content source over another.

There are two approaches to the basic concept of zero rating, according to FierceWireless. In one, carriers don’t count use of a service against the data cap. The other features content provider subsidization of the cost to the end user. The story says that these services will be assessed under a “standard for future conduct” that will be part of Wheeler’s version of net neutrality rules.

Global7

The test case mostly likely will be T-Mobile’s Music Freedom program, which uses the zero rating approach. How the FCC approaches it will be a key indicator of the depth of oversight, no matter what rules eventually are adopted. CNET reports that a T-Mobile spokesperson said that the goal is to include all legal music streaming services.

The FCC is taking a wait-and-see attitude because the approach is new and no complaints have yet been filed. It is clear that allowing this approach would require strict guidelines that comply with the broader net neutrality rules.

The announcement of a net neutrality structure by the FCC and the vote to be held later this month are big steps. There still is a long way to go, however. The fuzziness over how zero rating/positive price discrimination services will be overseen is but one example of how much work remains to be done.

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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