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.

Reader Comments

The First Word

Subscribe: RSS

View by: Time | Thread


  • icon
    Ninja (profile), 14 Apr 2016 @ 6:30am

    Owner of the slave pen: DEAR SLAVES, YOU ARE FREE TO ACCESS CAGE NUMBER TWO FROM NOW ON! Look how generous we are, you'll have more space!

    Aware slave: but sir, we are still slaves.

    Owner: Do you guys support having that extra free space?

    Slaves: YES!

    Owner: See? They disagree with you.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Apr 2016 @ 6:45am

    Doesn't it just proof that people are not using/trying services because of data caps? So the question that con be as good answered with this is: Would you use more services or stay with us if there wasn't this damn cap and you might have to pay extra fees or get your data-connection so slow that it's useless.

    Yes free data isn't directly bad for consumers, it’s a problem for enterprises that now have to also pay the share that should already be payed by the consumer. But in the end always consumer pays one way or another.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Apr 2016 @ 6:58am

    Bizarre questions

    It's not surprising to see every answer as an affirmation that data caps are annoying and limiting the users and play a major role in deciding which services are used, which providers are chosen and how much data is consumed.

    But each of these questions take the existence of data caps as a given. I bet you'd get even higher percentages if you asked how many users would like there to be no data caps at all.

    And I wonder how many users would agree that "It is up to the provider to choose which online services are exempt from data caps and thus 'interesting' for all users"?

    reply to this | link to this | view in chronology ]

  • identicon
    Capt ICE Enforcer, 14 Apr 2016 @ 7:01am

    Better survey

    More realistic survey.

    1. Do you like your ISP or Phone service provider charging you more money for going to websites that you want.

    2. Survey complete.

    reply to this | link to this | view in chronology ]

  • icon
    Jeremy2020 (profile), 14 Apr 2016 @ 7:20am

    They actually boldly list a big problem in their advertising for it:

    "94% more likely to try new service offering free data"

    That makes the mobile companies the gatekeepers. You would *have* to pay them for zero rating to have a chance.

    reply to this | link to this | view in chronology ]

    • icon
      M. Alan Thomas II (profile), 14 Apr 2016 @ 10:39pm

      Re:

      Exactly! The high ratings in response to the following questions clearly show that zero-rating produces market distortions in favor of zero-rated apps:
      How likely would you be to try a new online service if it was part of a free data offering?

      How likely would you be to use more data on your smartphone or tablet if a free data offering made some of that traffic not count against your data allowance?

      reply to this | link to this | view in chronology ]

  • 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.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 14 Apr 2016 @ 7:54am

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

      "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). "

      But that is favoritism. Just because it isn't the carriers directly deciding who is going to be granted privileged access doesn't mean there isn't a serious issue with the idea.

      As an aside,, there's no way that the carriers wouldn't have a say about it. We can fully expect that they'll continue to be underhanded and deceptive just as they always have been.

      reply to this | link to this | view in chronology ]

      • identicon
        Thomas Sachson, 14 Apr 2016 @ 9:09am

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

        Again, fair points.

        Nevertheless, due to the First Amendment of the U.S. Constitution (our "operating manual" for how our free society operates) the carriers would almost certainly not have the right to legally block / impede my own personal use of apps (Google, Facebook, .gov, Amazon, etc.) running on my own device. And in all likelihood neither does the FCC (absent a very compelling state interest like national security, obscenity, etc. - which would not apply to something like subsidized data imo).

        Now if Congress chose (a big if), they could regulate the types of interstate subsidies that an app offered if the Congress enacted specific laws to do so (this being the govt's prerogative under Article 1, Section 8, Clause 3 of the Constitution - the "Commerce Clause"). But without a compelling rationale it is highly unlikely to happen since it would more likely than not be deemed to stifle open and free competition (a vitally important consideration in terms of delivering value to citizens and society). To use a very simple app market analogy, it would be like the Congress creating a new law telling the FCC to restrict app developers from offering their mobile apps for free, and instead mandating that the developer had to charge a purchase fee for their software. In my opinion, this pricing decision (a dynamic exclusively between the app develop and the app end-user) absolutely should reside with the app developers -- not the govt.

        Bottom line, I think the markets, law makers, regulators, and end-users will decide that they want unregulated "freeness" in as many software and technology enablement areas as possible -- so long as that freeness is offered in a transparent, non-discriminatory fashion, and where the end-user is the ultimate decider as to whether they accept the freeness offered or not.

        reply to this | link to this | view in chronology ]

        • icon
          John Fenderson (profile), 14 Apr 2016 @ 10:36am

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

          You're talking about blocking and allowing apps, but that's not what's being discussed. What's being discussed is the gaming of the app marketplace to ensure that it is as favorable to the major companies as possible.

          This isn't in any way a free speech issue. This is an issue of whether or not what amounts to an oligarchy will be able to act as gatekeepers.

          reply to this | link to this | view in chronology ]

          • identicon
            Thomas Sachson, 14 Apr 2016 @ 11:35am

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

            If the carrier is not involved in creating the app features / can't speed up data delivery / can't slow down data delivery / can't block data use / can't promote data use / doesn't know which apps have free/subsidized features (coins, bandwidth, cash back, content, etc.), as a practical matter I think it safe to conclude they have no material influence in the process. This is simply sound engineering -- design a system where bad acts can't happen (self-fulfilling goodness).

            As for the free speech point, if I choose to install a free app (freemium app) with free data features voluntarily that is a form of free expression. If an app provider writes app code and gives it to me for free that is also a form of free expression. If someone decides to subsidize the whole process that is freedom of commerce. These are all very well established Constitutional and economic principals in our country (e.g., not just seen in the Electronic Frontier Foundation's seminal case of Bernstein vs. DOJ), and if structured thoughtfully the carriers' intentions (good or bad) really should not figure into it.

            For instance, I am currently using this Google provided Chrome browser to communicate with you on this particular issue and my carrier has no influence over my use of this piece of free Google software. They also don't know whether my bandwidth consumption activities are being paid (full or partial subsidy) by my employer, business, parent, school, spouse, or otherwise (btw - one of these parties is actually reimbursing me for the bandwidth I am consuming right now).

            The problem of zero-rating flows not from the freeness it gives those who voluntarily choose it, but instead from the role the carriers might play in determining who gets the freeness (and on what terms). The simple solution of a toll-free / zero-rated app encourages the valuable data freeness for those who need it (e.g., unconnected, under-connected, low income) and simultaneously removes even the hint of carrier influence, and in the process avoids throwing the baby out with the bath water. Thanks for listening.

            reply to this | link to this | view in chronology ]

            • icon
              John Fenderson (profile), 14 Apr 2016 @ 2:02pm

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

              "as a practical matter I think it safe to conclude they have no material influence in the process"

              I think you are underestimating them.

              "The problem of zero-rating flows not from the freeness it gives those who voluntarily choose it, but instead from the role the carriers might play in determining who gets the freeness (and on what terms)."

              Fair enough, but I very much disagree with this assessment.

              reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 14 Apr 2016 @ 9:50pm

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

          > Bottom line, I think the markets, law makers, regulators, and end-users will decide that they want unregulated "freeness" in as many software and technology enablement areas as possible -- so long as that freeness is offered in a transparent, non-discriminatory fashion, and where the end-user is the ultimate decider as to whether they accept the freeness offered or not.

          You should realize the anticompetitive incentives you're creating.

          ISPs don't normally have the incentive to charge for bandwidth because it only loses them money. The highest using customers stay on the unlimited plan and only customers that save a significant amount of money by switching to a metered plan will do it, which is money the ISP is then losing.

          Now let the app developers pay the bandwidth fees, what happens? Then the ISP has the incentive to make the per-byte bandwidth cost higher rather than lower, because the higher it is the more advantage an app developer who pays them has over one who doesn't, which will get more app developers to do it.

          The more app developers pay them the higher they can raise the price of bandwidth without their end customers canceling their service, and the higher they raise the price the more app developers have to either pay them or go out of business.

          The app developers have no alternatives to reach those customers. You can't play Verizon and AT&T off each other because Verizon can't provide you access to AT&T's customers. So it creates an unrestricted monopoly and monopoly prices. The price of bandwidth becomes divorced from the cost of providing it or even whether the ISPs have any competition on the customer side, what matters is the maximum amount of money each wireless provider can extract out of the app developers who actually have competition and therefore need to pay the monopoly price to not have a large competitive disadvantage.

          The cost of bandwidth gets high enough that customers are unwilling to use an app that doesn't pay, most apps cease to exist because they can't afford to pay, and the remaining apps are much less profitable which means they have less resources to put into improvements. Because that's what monopolies do.

          Which is why we have regulations to prevent the exercise of that monopoly power.

          reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 14 Apr 2016 @ 10:09am

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

      I don't understand your plan. If the carrier isn't involved in picking what traffic gets counted against the usage cap, then how is it zero rated?

      reply to this | link to this | view in chronology ]

      • identicon
        Thomas Sachson, 14 Apr 2016 @ 10:30am

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

        The zero-rated apps themselves monitor their own consumption and report back the usage to a non-carrier third-party app servicing administrator. The administrator collects the payments from the sponsoring parties and remits payment to the carrier on behalf of the end-user. The carrier never knows which apps were free and which ones were not (and the carrier doesn't care since they get paid either way). But the end-user keeps getting free data in perpetuity. This is where things are going in India (see TRAI order permitting this type of zero rating activity). Essentially, competitive pressures drive more and more free data going to the end-user by the data sponsors for use in any capacity (e.g., use 10MB on Amazon and get 50MB paid for by Amazon to be used anywhere the end-user pleases - so literally a 40MB "profit" free to the end-user to go visit non-Amazon sites / services / start-ups / etc). In theory, this empowers low income consumers to get free data for life - and the carrier never had any say in the structuring whatsoever. Basically, it puts the end-user in the driver's seat as between the carrier and the party trying to engage with the end-user.

        reply to this | link to this | view in chronology ]

        • icon
          nasch (profile), 14 Apr 2016 @ 12:27pm

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

          So it's exactly the same system but with Bob picking what gets zero rated instead of Joe? How is that better?

          reply to this | link to this | view in chronology ]

          • identicon
            Wendy Cockcroft, 15 Apr 2016 @ 6:04am

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

            Sssh! nasch, you're not supposed to think for yourself or pick holes in arguments based on a blue-sky scenario in which the act of trying to get money off of people magically purifies you of ill-intent.

            reply to this | link to this | view in chronology ]

    • identicon
      Zonker, 14 Apr 2016 @ 11:41am

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

      Here is a much simpler solution: zero rate everything by removing artificial data caps people don't like. According to the survey in the article, 98% percent of Millennials would stay with a carrier that provides free data (no caps).

      We paid for the bandwidth, we should be able to use what we paid for. If traffic is congested during peak hours, then use network traffic management to balance the load or improve your infrastructure. That's what your customers pay you to do.

      reply to this | link to this | view in chronology ]

      • identicon
        Thomas Sachson, 14 Apr 2016 @ 11:55am

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

        I agree that for some consumers, paying a flat rate for unlimited / all you can eat data would make sense and is a very straight forward proposition. However, there are other parts of the low-income market where this won't work as well (here in the US and internationally) and that is where zero-rated / toll free apps come in. The vision is that through these types of market neutral mechanisms (toll-free apps) any person can get free data access to any site / app if need be -- regardless of their ability to pay for it. But this won't be appealing to all users, which is OK. We just want to have the option there for those who want to voluntarily make use of it.

        reply to this | link to this | view in chronology ]

        • icon
          nasch (profile), 14 Apr 2016 @ 12:35pm

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

          We just want to have the option there for those who want to voluntarily make use of it.

          I just figured out that this guy is running or otherwise associated with a company that does this. That doesn't make him wrong of course, but he has a dog in this fight.

          reply to this | link to this | view in chronology ]

          • identicon
            Thomas Sachson, 14 Apr 2016 @ 12:48pm

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

            Hi Nasch,

            I am a small software developer / entrepreneur and do indeed have a dog in this fight (been working on this for 6 years now) which is why I have much to share with regard to carrier models, consumer needs, and legal requirements pertaining to zero-rating. But always open to other points of view and I believe the markets will find a way forward that enables and protects the best interests of the consumer.

            reply to this | link to this | view in chronology ]

            • icon
              nasch (profile), 14 Apr 2016 @ 1:45pm

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

              But always open to other points of view and I believe the markets will find a way forward that enables and protects the best interests of the consumer.

              They would if there were strong competition in the wireless industry. As it is, the FCC is the only one keeping them from totally screwing over their customers.

              reply to this | link to this | view in chronology ]

              • identicon
                Thomas Sachson, 14 Apr 2016 @ 2:24pm

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

                Hi Nasch & John,

                The FCC is great, but it's better if you can create a open and competitive dynamic where large players seeking to engage with end-users (Hulu, Netflix, Amazon, etc) compete with each other to give as much free bandwidth as possible - in perpetuity - to end-users in consideration for their valuable engagement (upward spiral of value creation for end-users). If done well I can envision a system where free and unlimited bandwidth is a reality for all those in need (no exaggeration). The key is to directly empower the end-user vis-a-vis a relationship with the sponsor (making the carrier far less relevant in the process). Thanks again / signing off for now - gotta run to a meeting. :-)

                reply to this | link to this | view in chronology ]

                • icon
                  John Fenderson (profile), 14 Apr 2016 @ 2:28pm

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

                  "where large players seeking to engage with end-users (Hulu, Netflix, Amazon, etc) compete with each other "

                  And that's the fundamental problem that your scheme doesn't address: it tilts the entire playing field severely in favor of the large players. The result will be the further entrenchment of these companies. Even if you don't personally mind that, the effects on the industry would be pretty bad, because the large players is not where innovation comes from. Disenfranchising smaller players harms everyone.

                  reply to this | link to this | view in chronology ]

                  • identicon
                    Thomas Sachson, 14 Apr 2016 @ 2:59pm

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

                    Super quick - I really have to run.

                    That is a very important point you make and one that the big guys actually argue heavily in favor of (not surprisingly since they don't want to be in the competitive data subsidy business - it eats into their margins a bit).

                    But our analysis strongly suggests the opposite. If you bring more users online with no / low fees (of course, subsidized by the big guys or Govt sponsors) then you get more free bandwidth pumped into the ecosystem overall (upward spiral of freeness) which is used by consumers in more experimental ways / trying new services (especially the small innovative ones that don't / can't subsidize data). Which means the small guy / apps may actually get more exposure than they would currently with data caps (here in the US somewhat, but very much a fixture in emerging markets with pre-pay models). In economic terms we can therefore create market "lift" across the whole ecosystem - not merely "shift" (which leads to entrenchment. Thanks again.

                    reply to this | link to this | view in chronology ]

                • icon
                  nasch (profile), 14 Apr 2016 @ 2:56pm

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

                  The FCC is great, but it's better if you can create a open and competitive dynamic where large players seeking to engage with end-users (Hulu, Netflix, Amazon, etc) compete with each other to give as much free bandwidth as possible - in perpetuity - to end-users in consideration for their valuable engagement (upward spiral of value creation for end-users).

                  Absolutely not. It's better if the carriers have no choice but to offer great performance and lots of data for low prices because that's what their dozens of competitors are doing so they'll go out of business if they don't. Then there's no need for zero rating at all.

                  reply to this | link to this | view in chronology ]

        • identicon
          Zonker, 14 Apr 2016 @ 5:27pm

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

          Not paying extra to remove an entirely artificial cap on the use of our bandwidth benefits everyone, especially the low-income market. You are proposing that in addition to the customer paying for internet service and Hulu/Netflix/Amazon/etc paying for their internet service, that Hulu/Netflix/Amazon/TechDirt/etc should pay an additional toll to a middle man for their data to reach the people who requested that content.

          That is not how the internet works. This is not the old analog long distance phone company from last century with per minute charges and toll-free numbers. This is not AOL. This is the modern digital world.

          reply to this | link to this | view in chronology ]

          • identicon
            Thomas Sachson, 14 Apr 2016 @ 8:35pm

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

            Hi Zonker,

            Not sure where your getting that particular scenario. With our toll-free app technology the end-user can theoretically start using mobile data for $0 on day one (ideally no need to even pay a deposit to a carrier for use of the sim) and conceivably never pay a cent for access to any site located anywhere (or use any app from any app provider). This is only possible if the process is monitored solely within the "four walls" of the app (as opposed to in-network deep packet inspection / DPI). It's a longer discussion though on the mechanics, but very doable.

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 14 Apr 2016 @ 9:29pm

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

      I don't think you're getting anywhere with the First Amendment argument because it isn't a content-based restriction. It isn't a restriction on distributing encryption or any particular software, it's a content-neutral restriction on who the licensees of the public airwaves can accept money from. Like prohibiting Ham radio operators from selling commercial advertising.

      reply to this | link to this | view in chronology ]

      • icon
        John Fenderson (profile), 14 Apr 2016 @ 9:56pm

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

        I dunno. This seems like a gray area to me, honestly, but your argument is ignoring the fact that you can engage in First Amendment violations without targeting specific types of speech.

        For example, you can say that only specific people are allowed to speak and no others, regardless of what they have to say. Zero rating is discriminating based on who is doing the speaking.

        But cell phones are a weird space. The First Amendment only relates to government activities, not private entities. Cell companies use the public airwaves and are licensed by the government, so you could argue that the First Amendment is in full force. But it's also undeniable that there are private entities in the mix as well, where the First Amendment is not.

        The whole thing seems very murky to me.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 15 Apr 2016 @ 1:31am

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

          > For example, you can say that only specific people are allowed to speak and no others, regardless of what they have to say. Zero rating is discriminating based on who is doing the speaking.

          But the FCC isn't requiring the discrimination, they're prohibiting it.

          reply to this | link to this | view in chronology ]

          • icon
            John Fenderson (profile), 15 Apr 2016 @ 7:18am

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

            I wasn't talking about the FCC, I was talking about the wireless companies.

            reply to this | link to this | view in chronology ]

          • 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.

            reply to this | link to this | view in chronology ]

            • icon
              nasch (profile), 15 Apr 2016 @ 8:20am

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

              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.

              It's the exact opposite of that. Zero rating gives the power to those with resources, and banning zero rating would ensure that others are able to compete with the wealthy and powerful movers in the market.


              In sum, fostering the option of toll-free / zero-rated apps shifts a great deal of bargaining power back to the consumer


              It biases consumers in favor of those who can afford to get zero rated. I can't see how it gives them bargaining power though. What would give them bargaining power is if they had a whole bunch of wireless providers to choose from. Currently I have two, because only Verizon and AT&T service my area. How much bargaining power do you suppose I have, and how would zero rating give me more?

              reply to this | link to this | view in chronology ]

              • identicon
                Thomas Sachson, 15 Apr 2016 @ 8:50am

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

                I think it fair to say that the main reason many don't experience competition is because there are only two or three parties battling it out for our patronage. If we open up the market to others willing to compete for our business (the hundreds of thousands of large and small businesses that seek to engage with us) we would see a renaissance of value creation for the connected consumer. So let's enable technologies that tear down these artificial walls and let the consumer freely exert their pricing power in the ecosystem. This is why people In other less regulated markets receive freeness / discounts - they can demand it from the companies that want to sell to them. Market restrictions more often then not hurt consumers and prop up entrenched businesses. Innovation and the freedom to adopt new models is what levels the playing field by improving transparency, and in the process removes bias and instills true individual freedom of choice. I would propose that we move away from delegates making decisions on our behalf - and instead let each individual cast their own vote using the super computer in their pockets (smartphone). The best connectivity models will flourish and the weaker ones wither away. Democracy in its most simple, untarnished form.

                reply to this | link to this | view in chronology ]

                • icon
                  nasch (profile), 15 Apr 2016 @ 9:05am

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

                  OK... you sounded like a politician yourself. I don't see how any of that answered my question, but it did sound pretty good.

                  reply to this | link to this | view in chronology ]

                  • identicon
                    Thomas Sachson, 15 Apr 2016 @ 9:38am

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

                    Just think people should be free to choose their own economic path. If they choose wrong, they'll self correct quickly. If they choose a better model then the world is that much more better off. Just econ 101 stuff - and tech is a great accelerant in terms of making the system sort through / work out these unknowns / complexity.

                    Anyway, signing off now. Have a good weekend all. :-)

                    reply to this | link to this | view in chronology ]

                • icon
                  John Fenderson (profile), 15 Apr 2016 @ 9:51am

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

                  I honestly can't follow what you're trying to say here.

                  In the context of your offering, what market are you talking about opening up? What barriers are you knocking down? Perhaps I am misunderstanding, but the whole idea looks like it's a method of gaming the system and imposing barriers.

                  The argument that I'm hearing in favor of it is that the entity doing the gaming shouldn't be the carrier. As far as that goes, yes, if the system is to be gamed then I'd rather that it not be the major telecoms doing it.

                  But really, I'd much prefer that the system be fair, instead.

                  reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Apr 2016 @ 7:40am

    Hey Guys...

    What is the point? Seriously?

    The problem is not going to be fixed. Americans are firmly entrenched with the party system. Even if the Republican Party falls it will just be replaced with another party that follow the old adage, "Meet the new masters, same as the old masters" and will remain just as corrupt as they are now. We already know that we cannot possibly fall back on the Democrats which have extensively fooled their ignorant base that they are somehow against the Oligarchy by promising welfare and seeking to import more poor people to expand their ranks and screw their current poor over by having the new poor take more jobs from the existing poor. I seriously need to get a hold of the cool-aid they are making and form my own rat bastard party!

    Those that applauded the new Net Neutrality rules are the sheeple. The FCC is just the story of "The Emperor's New Clothes" all the fuck over again.

    I said it till I am blue in the face, the new rules are even worse than the OLD rules because it gives the FCC too much power to "Arbitrarily" define penalties, which is why Congress has a fucking excuse to fight it, and the FCC and the rest of your idiots supporting these new rules only helps add fuel to the fire.

    We only need to support well defined rules that clearly mark what is and what is not. The FCC did not do that, the FCC needs to fail and the rest of you need to start bitching to the FCC that his is NOT "Net Neutrality" but instead of fucking end run around the system making the FCC more powerful than it needs to be!

    reply to this | link to this | view in chronology ]

  • icon
    Jeremy Lyman (profile), 14 Apr 2016 @ 7:47am

    Would you like it if we didn't raise prices on some websites?

    Yes?

    See! They said we should raise prices on the other websites!

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 14 Apr 2016 @ 8:09am

    "... and for a limited time you can get what you're already paying for for only an extra $19.99 per month!"

    Step 1: Charge customers for service.

    Step 2: Introduce completely unnecessary limit on service, claim that you have no other choice due to technical/hardware issues.

    Step 3: Create way for certain groups to bypass the unnecessary limit by paying you for the 'privilege', making it clear to anyone paying attention that your justifications for the limits were empty.

    Step 4: Direct customer attention to the 'limit-free' portion of their service, re-direct any questions regarding the non-'limit free' parts by claiming 'Look, free stuff!', while raking in the cash from both those paying you to bypass the restrictions you implemented, and those who use non-'free' services and end up paying extra as a result.

    reply to this | link to this | view in chronology ]

  • icon
    Adam (profile), 14 Apr 2016 @ 8:10am

    zero

    How does restricting content create more choice? If there was a strong youtube competitor that wasn't zero rated while youtube was...how does this open it as a choice for me?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Apr 2016 @ 8:40am

    In other words, according to a new study by the wireless industry, 94% of Millennials are more likely to try a new online service if it's backed by a company with deep enough pockets to pay their data carrier a kick-back, 98% are more likely to stay with a carrier that holds them hostage, and 94% of Millennials are likely to use more data if the don't have to perform a bunch of mental gymnastics every time they take out their device. Sounds more like an indictment of the industry than an endorsement of the service.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Apr 2016 @ 10:01am

    I hear the same complaint about zero rating

    So far, each person I have talked to about zero rating pretty much has the same thing to say. "I love it" followed by "Why doesn't it include app/site xyz"...
    I'm a bit of a hermit, so my sample set is minuscule.

    How long until some ISP (or wireless provider acting as one) starts offering a Zero Rate any app/site for an extra $ or bundle more for additional $aving$.
    "Tru$t me, we're here to provide the be$t $ervice at the be$t price (for our $hareholder$)"

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Apr 2016 @ 10:35am

    I'm in the 94% that would like to try all content services and the 94% that would use more data if it didn't count against my plan. Can you zero rate ALL web content so I can try everyones service? OH wait, that would mean no caps for everyone! We love zero rating.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Shop Now: Techdirt Logo Gear
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.