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.