If you want to see the true colors of net neutrality rule proponents look no further on their stances on zero rating. A zero rated site is a site that a wireless carrier has exempted from its fee structure or data cap. The company behind the site may have decided that exempting access to its site via its app may be good for attracting additional eyeballs which means more people viewing the ads that may be appearing on the site. For a wireless carrier wanting to heat up the competition with other carriers, offering their subscribers data cap exemption when accessing popular websites like Facebook may help garner subscribers.
So far it looks like when 12 June 2015 rolls around and the Federal Communications Commission’s net neutrality rules kick in that the strategic partnership between mobile carriers and app developers in the form of zero rating may remain unharmed. Carriers, according to published reports, are turning to zero rating because of the additional revenues that can be generated by advertisers. And as I allued to earlier, app developers or advertisers are taking advantage of the traffic they can create by making it easy for consumers to avoid additional data charges when viewing their sites.
The FCC, in some deference to the net neutrality advocacy groups, will apply additional scrutiny to these arrangements because at the core of the net neutrality debate is whether content providers that bring better value, better marketing, or both, should be able to dominate a market against those content providers who are not able to market their content as valuable. The FCC will, on a case-by-case basis, determine whether a consumer’s lawful access to internet content is being hindered by broadband access providers.
The “case-by-case” review will cause snarls on the way to product deployment and those delays will increase an app developers cost of deployment combined with lost ad revenues as the FCC makes up its mind as to whether a strategic partnership between app developers, advertisers, and broadband access providers violates net neutrality. I believe that such arrangements even under the FCC’s net neutrality rule shouldn’t be viewed as violations.
First, there is apparently no blocking on the part of a broadband access provider pursuant to Section 8.5 of the FCC’s net neutrality rules. The app providers are, by definition, edge providers and they are offering sponsorship of subscriber data as such. Nothing in a zero rating scheme appears to prohibit any broadband access provider from visiting sites that compete with a zero rated site.
Second, zero rating a site is not the same as throttling according to Section 8.7 of the FCC’s rules. Throttling is defined as impairing or degrading lawful internet traffic; slowing it down and negatively impacting the quality of the traffic’s flow. Nothing in the definition of zero rating implies that a broadband provider would have to slow down traffic to site B in order to meet its zero rating promise to site A. There would be no incentive since the company behind the app is reimbursing the broadband provider for revenues lost when exempting subscribers from data caps.
Finally, I wouldn’t equate zero rating with paid prioritization, and apparently not even net neutrality proponents are doing so. Under Section 8.9 of the FCC’s net neutrality rules, paid prioritization sees a broadband access provider managing its network in order to favor one content provider’s traffic over another provider’s traffic in exchange for compensation. In the case of zero rating, a content provider’s traffic is not being given any higher priority treatment. Nothing in the definition of zero rating says that one provider’s traffic moves through a faster lane. Neither can an argument be made that consumers are being disadvantaged. On the contrary, the consumer benefits because they are accessing more content at a lower cost.
Zero rating is a win for consumers and content providers. The FCC, while expected to scrutinize these relationships, should not go overboard with oversight in this area.