Wireless Industry Survey: Everybody Really Loves Zero Rating

from the hidden-hidden-costs dept

With the FCC glacially pondering whether or not zero rating (exempting some content from usage caps) is a bad idea, the wireless industry has decided to try and settle the argument. According to a new study by the wireless industry, 94% of Millennials are more likely to try a new online service if it's part of a free data offering, 98% are more likely to stay with a carrier that offers such services, and 94% of Millennials are likely to use more data if it doesn't count against their data plan. As intended, the survey resulted in a lot of varied news headlines insisting that "consumers actually like ISPs to play favorites on mobile data caps."

The study is, the CTIA proceeds to claim, proof positive that zero rating is a great thing for everybody, from companies to consumers. Just ask Meredith Attwell Baker, former FCC Commissioner, former Comcast lobbyist, and now the top lobbyist for the nation's biggest wireless operators:
"It is no surprise that Americans embrace free data services that offer wireless consumers more data, more competitive choices and more flexibility to try new mobile applications and content. Free data services empower consumers with the freedom to choose what works for their mobile life, and that’s an outcome that everyone should support,” said CTIA President and CEO Meredith Attwell Baker."
If a revolving-door telecom lobbyist saying it's true doesn't convince you, here's an accompanying graphic of stock photo Millennials thrilled at the very idea of zero rating:
So, yeah, some problems. I requested and received the methodology (pdf) used in the commissioned Harris poll, and you'll be shocked to learn that the questions asked weren't particularly nuanced. After asking survey participants whether they were familiar with such terms as zero rating or sponsored data (the results of that inquiry weren't shared), the survey basically just consists of asking consumers whether or not they like "free stuff." If somebody's unaware of the current zero rating net neutrality debate and is asked if they like "free stuff," it seems pretty clear what kind of answer they're going to give.

And therein sits the problem with zero rating. The majority of consumers still don't really understand what zero rating is, much less that there's some obvious hidden costs involved. As such, when approached with "free" services, they're thrilled.

They generally don't understand that the usage caps selected by their ISP are an arbitrary, artificial construct to begin with, untethered to financial or network congestion reality. Or that the very practice of giving wealthier, bigger companies cap-exempt status puts other smaller companies (and non-profits and educational efforts) at a very real disadvantage in the market. Or that over the years, data has shown that caps aren't an effective way to target network congestion, can hinder innovation, hurt competitors (especially if an ISP's exempting only its own services), and confuse consumers, many of whom aren't even sure what a gigabyte is. So yes, it's complicated, and requires some education.

Sure, even after being informed there's surely many people who simply adore the idea of getting anything for "free." But had the CTIA made the slightest effort to inform survey participants or explore zero rating more deeply, the survey's results would have been dramatically different.
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Filed Under: misleading polls, net neutrality, surveys, wireless, zero rating
Companies: ctia, harris

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  1. identicon
    Thomas Sachson, 14 Apr 2016 @ 7:27am

    Toll Free / Zero Rated Data Apps = Likely 1st Amendment Free Speech

    Thanks for the article - you make some fair points.

    However, on the issue of mobile toll-free / zero-rating generally, there is another "middle" path that could avoid the conflict altogether. Mobile carriers could embrace simple, "network independent" toll-free / zero-rated apps and achieve the same benefits for themselves and their customers. This is because "autonomous" toll-free app technology is specifically designed to prevent perceived forms of network induced prioritization / favoritism / price discrimination (whether intentional or accidental), and if implemented properly would not violate net neutrality principles. With a network independent app, the mobile carrier literally can’t see whether the app requesting data from the network is subsidized or not by the app creator (the app acts to make the carrier “blind” as to which apps are subsidized and which are not — ergo no discrimination / app favoritism is possible).

    Also, as a practical matter, the FCC’s regulatory remit likely ends at the edge of the core network – not extending to the billions of network independent apps (third party software, whether toll-free apps or otherwise) that already reside on phones after being installed at the sole discretion of the phone owner / retail consumer. On this basis, I think few would argue that independent software providers should be restricted in creating and publishing their own apps that might also have commercial subsidy features (e.g., reward points, free data, free content) built-in for consumers who choose to take advantage of such subsidy. One could suppose there will be a few parties that think the software development community should forfeit their First Amendment free speech rights (see "Bernstein v. Department of Justice" where the Ninth Circuit ruled that computer code is speech, and is protected by the Constitution) and fall under FCC jurisdiction when it comes to writing and publishing their software apps, but I think the majority of industry participants (e.g., coders, Software Developers Association, Mozilla, Google, etc.) and even the FCC itself would prefer to maintain the developer community’s First Amendment freedoms from inadvertent regulatory censorship. Thanks for listening.

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