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, 15 Apr 2016 @ 7:23am

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

    On the discrimination point, when a govt entity prevents me from freely choosing an app (subsidized or not), this is a freedom of speech and restraint of commerce issue for both myself and the app providers (there might even be due process issues, but let's leave that to the side for now). In the case of a toll-free app (a new type of tech / not fully explored), the restraint is made somewhat arbitrarily as well, as the decision to limit does not seem to fairly take into consideration the needs or wants of average users (including those of limited means / fixed incomes) who really do want a better value proposition in their accessing mobile services and content. Given this frame of reference, the proposed prohibition of zero-rated / toll free apps feels more like discrimination of those with more resources against those with less.

    On the monopoly point, in a world where toll-free / zero-rated apps are merely available (not mandatory) and sit side-by-side with other app models and carrier bandwidth offerings (all you can eat vs. capped / faster pipes vs. slower / wireless vs. wireline / etc), there is by definition no degradation of competition between the carriers - but quite the opposite as diversity of choice abounds. Customers will gravitate to the highest and best value mix of free and paid services and both the carriers and app providers will need to respond in a more compelling fashion in terms of delivering value to their customers.

    In sum, fostering the option of toll-free / zero-rated apps shifts a great deal of bargaining power back to the consumer, and this is the kind of "bottom up" democratization, empowerment, and disruption that technology innovation delivers (often replacing decades old "top down" centralized planning models). This is why I would like to see this tech at least made available to consumers for them to experiment with and/or embrace long term if they so choose. Let the consumers choose for themselves and let the law makers respect and support those choices. Thanks.

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