“Zero rating” allows AT&T to do what net neutrality advocates have feared.
Last year, net neutrality advocates “won back” the free internet from the FCC, but the new regulations featured a loop hole which wasn’t banned; the so-called “zero rating”. Zero rating is a label that can be attached to various services to make them free from data charges, and won’t count against your data cap. The FCC has said that they will look at zero rating schemes on a case-by-case basis. AT&T has just made their new DirecTV Now streaming service zero-rated. This might sound like a good thing – free streaming; but in fact, it’s setting a dangerous precedent.
We previously saw zero rating when T-mobile began offering free music streaming services to its wireless customers. If you listened to Spotify or Google Music for example, T-mobile would give you unlimited high-speed internet for those services. They eventually expanded the service to also include video in their “BingeOn” program. BingeOn started throttling video speed and eventually morphed into an opt-in service which various companies could use to send you video. T-mobile has been desperately defending the service against criticism but so far the FCC hasn’t done anything to stop it.
T-mobile CEO John Legere had fiery comments in response to the BingeOn criticism: “So why are special interest groups, and even Google, offended by this? Why are they trying to characterize this as a bad thing? I think they are trying to use net neutrality as a platform to get into the news. At T-Mobile we’re giving you more video, more for free, and a powerful new choice on how you want your video delivered. What’s not to love? Who the hell do they think they are? What gives them the right to dictate what my customers or any wireless consumers can choose for themselves?”
The trouble with zero-rating is that it hampers free competition on the internet. This becomes very clear when we look at what AT&T has just done. The problem is that DirecTV is owned by AT&T, and that means they’ve used zero-rating to favor a company they own over others. It also offers something called “sponsored data” to other companies in order to provide the same kind of service to their customers. So for example, if Netflix wanted to enjoy the same privileges that DirecTV Now does, it would have to pay a fee to AT&T.
AT&T’s CEO John Stankey said “I don’t know why anybody would want to take something away from customers that customers like. We think it’s a great customer benefit. We think customers are voting already with their use of it. We’ve got an administration coming in that says they’re about competition and customer choice.”
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Zero rating actually offers a benefit, and something that the customers need, but the ISPs are the ones creating that need. In the United States, almost no ISPs offer unlimited data anymore. It’s bad for business, and when companies like AT&T can instead offer a bunch of ‘free’ premium content to fool you into thinking you’re getting a good deal. The system is rigged against the customers.
Next on the horizon, AT&T is looking to buy Time Warner, the company that owns Game of Thrones and Batman. Does this mean AT&T customers will be able to stream Game of Thrones for free in the future, but nobody else will? Surely this kind of business practice won’t affect larger companies like Netflix, who can afford to pay a premium for unthrottled content, but what about smaller businesses? What about your favorite blog?
Luckily, the FCC has warned AT&T about their latest move, so perhaps we will finally see the agency crack down to preserve a free net.
source: The Verge