Mozilla Study: Zero Rating Isn't The Miracle Broadband Duopolies And Facebook Pretend It Is

from the on-ramp-to-nowhere dept

For years now we’ve explored how large ISPs have (ab)used the lack of competition in the broadband market by imposing completely arbitrary and unnecessary usage caps and overage fees. But in addition to these glorified price hikes, ISPs have also long taken to exempting their own content from usage caps, while penalizing competitors — allowing them to use this lack of broadband competition to tilt the content playing field in their favor. Incumbent ISPs have long tried to twist and distort this narrative, claiming that zero rating is the bits and bytes equivalent of a 1-800 data or free shipping.

Of course that’s simply not the case, and zero rating simply shifts costs around to the benefit of entrenched mono/duopolists. Since caps and overage fees are arbitrary implementations not tied to any sound, real-world economics, the consumer isn’t technically really saving anything (especially in the States, where we already pay more for data than most developed nations). And because content companies are often penalized while ISPs exempt themselves, this reduction in overall competition has very real negative cost impact on the end user.

This gross distortion of the market doesn’t just benefit ISPs. Overseas, companies like Facebook have partnered with mobile carriers to cook up their own, poorly-received zero rating efforts, providing an AOL-esque portal to the internet stocked with Facebook-chosen content. Facebook tried to convince folks in India that it wasn’t just trying to corner the international ad market, it was simply worried about the plight of the impoverished farmers.

When Facebook’s plan was being debated last year, Mozilla quite-correctly pointed out that if Facebook was so worried about the poor getting access to the internet, it could… you know… actually help fund connections to the actual internet. Mozilla’s now back with a new study that further deflates some of the common, bunk narratives surrounding zero rating, particularly the Facebook and ISP claim that zero rating is a wonderful “on ramp to the internet” that showers immeasurable benefits upon the backs of the poor.

More specifically, Mozilla and its international research partners found that zero rating isn’t really an on ramp to anywhere useful:

“In all countries surveyed ? excluding India where zero rating has been banned by the regulator ? focus groups revealed that users are not coming online through zero rated services. While more research is needed, if zero rating is not actually serving as an on-ramp to bring people online, the benefits seem low, while the resulting risk of these offerings creating an anti-competitive environment is extremely high.”

The study also gets to the real reason companies like Facebook are so breathlessly in love with zero rating — it tends to keep users focused on just a handful of websites (and obviously the advertising companies like Facebook want seen). It should probably go without saying that users who are stuck with only a limited window to the internet, aren’t getting the full benefits the internet has to offer. But one of Mozilla’s research partners (pdf) also noted that many users of these walled garden, zero rated services wind up conflating “Facebook” with “the internet,” which is one of Facebook’s primary goals:

“In discussing promotions and Internet-use more broadly, respondents focus on Facebook. Some respondents from rural focus groups use Facebook and the Internet interchangeably, as, for example Internet search for them means searching within Facebook…Our findings raise concern of Facebook?s influence within Myanmar, as these zerorated promotions may serve to perpetuate its dominance and undermine widespread understanding of the distinction between its services and the ?open Internet?.

Of course the decision to drive users to a handful of websites instead of the entire internet has a dramatic, negative impact on overall content competition. That’s why India banned Facebook from engaging in this behavior, hoping to encourage efforts that help bring the real internet to the poor, not bizarre walled gardens where Facebook, Google or your ISP has the final say when it comes to the content and services you’re seeing. Here in the States, where we’re facing both a gutting of net neutrality rules and a looming reduction in competition thanks to mindless merger mania, we’re about to get a crash course in how the “help” provided by zero rating is no real help at all.

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Companies: facebook, mozilla

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Comments on “Mozilla Study: Zero Rating Isn't The Miracle Broadband Duopolies And Facebook Pretend It Is”

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Anonymous Coward says:

Re: Don't take him out of context

Wheeler reviewed different carrier products on a “case-by-case basis,” asserting that he’s not against the idea of zero-rating in principal.

Rather, the FCC is looking at cases where companies like AT&T and Verizon, which control significant chunks of broadband, favor their own “downstream” services (like DirecTV or go90) over competitors.

Anonymous Coward says:

Re: Re: Don't take him out of context

How was it being taken out of context? It looks like you are making a distinction without a difference. It really does not matter which company is getting a pass or not. The law is supposed to be applied evenly, so even if its an ISP with just 1 single customer they should not be allowed to favor their own downstream services over competitors while simultaneously advertising unlimited internet on their product.

They way you wrote your response you are okay with smaller ISP’s getting away with things but not the bigger ones. A customer being cheated is a customer being cheated. It does not matter if it is AT&T or Jonny Appleseeds ISP Orchard!

orbitalinsertion (profile) says:

Re: Re: Re: Don't take him out of context

It’s out of context because Wheeler didn’t push for zero-rating, he mollified some powerful groups a little bit by saying it is one of the things they would look at in individual instances to see if it was anti-competitive in practice. I don’t think Wheeler saw a big problem with it, and most here disagree and think it is. It is not “Wheeler Vision”, it’ isn’t any news to us, but dude can say “i told you so” all he wants, but we all already knew.

It does fit into the larger context of that ac saying nothing but “i told you so”, and “you are all idiots”, and “Wheeler blah blah”, and “regulations bad”. Without evidence of anything. I can’t keep track, but the ac may also be one who thinks everyone is a “leftist”. (In a current climate where Saint Ronnie would be a “leftist”, mind you.)

I also don’t see the response indicating anything you say it seems to do.

Ninja (profile) says:

All this bullshit courtesy of cash grabbing data caps. I’d aim my cannons at the bullshit used to justify data caps now that we are done lambasting zero rating. Also, set up some campaign to get more money than Pai is receiving from the telcos (or will receive) so maybe we can start having a discussion. “”””””discussion”””””””

Andy says:

Re: Re:

Ok some simple truth’s about data caps…. when you have a connection to the internet and you are not using it there is a continuous stream of 1’s and 0’s that keep the connection open, when you click on a link your computer changes the data in that stream going through your computer and the isp does absolutely nothing it does not get affected in any way.
This is why usage caps are not used in modern countries as people understand that caps are artificial and just an excuse to charge more for nothing.

A simple way to explain how it works is that you have a water pump and you are pumping water between two buckets…add a little colouring and the pump will continue as though nothing has changed. The water is the natural data stream you have when you switch on your internet connection.

Also with speeds, if you have say 20 people sharing a stream of data. the quicker the speed the sooner each person using that one stream will finish what they are downloading meaning that everyone benefits as the chance of congestion is lower the higher the speed, so higher speeds could mean that isps could instead of having 20 people using the same stream having 30 people using it and not seeing any change in congestion.The problem is that isps will increase speeds and use less hardware but charge more even though they are saving, they will also put more people on a single stream over what is reasonable causing congestion.

It is all a scam and the reason that google could give 1 gb download and upload speeds for the price one of the big isp’s will charge for there slowest connection.

MyNameHere (profile) says:

“That’s why India banned Facebook from engaging in this behavior”

Facebook merely failed to grease the correct palms and include the correct government officials in the plan. Otherwise it would have gone through like salsa through a goose.

For what it’s worth, it seems all of the links in this sort link back to this story. Sort of hard to read a report that isn’t linked.

orbitalinsertion (profile) says:

Re: Re:

It sort of depends on what pols or bureaucracy one is dealing with at the moment, but yes, corruption is just normal business in much of India. The fact that bribes could do away with an honest assessment does not make the assessment any less honest.

(Was there a problem? Looking at the article again today, links seem to point to different articles, although two point to the same one, and none of them self-reference.)

orbitalinsertion (profile) says:

Re: Google-funded research

That affects the report about using artificial market capture to limit internet experience and control the advertising regime how, exactly? And how is it we know this is a solely Google-funded study? (Not that it matters, really, if the study and report are independent.) Further, the goog and fb hardly compete directly for advertising eyes. Finally, Google has not been Mozilla’s search partner for a while now.

Yes, whatever it is you wish to imply is no surprise at all.

Glenn says:

Usage caps are, to put it simply, nothing but a rip-off

However, the most simple fact is that we pay ISPs for *Internet* service, which–obviously–involves Internet traffic. While there is some potential for Internet traffic to cost an ISP something, for the typical residential customer the cost to the ISP is next to zero (no matter how much traffic we’re talking about) because the huge majority of it is download traffic. If the traffic in question isn’t even Internet traffic but only traffic on the ISP’s network, then–well–that traffic will cost the ISP nothing–ever; upload or download matters not at all since it doesn’t touch the Internet. Sorry, but fair is fair (not that the typical ISP plays fair anymore). If it ain’t *Internet* traffic, then it’s quite reasonable for an ISP to not charge a customer for it–even if it works out to their advantage.

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