Remember when we thought net neutrality would be something we could simply achieve? Well look out, because it might be ending up back in the news cycle again.
Specifically the unbroached, fourth estate of net neutrality: zero-rating. When the FCC was taking the reins on regulating ISPs and establishing net neutrality, they intentionally opted to not go into “zero-rating,” or when an ISP allows some services to not count towards a data cap. But it may not be possible for them to stay on the sidelines for much longer.
Truth is, they wouldn’t be alone in trying to figure out a place for zero-rating in the regulations. India has made some moves to block differential charges for internet content, and the EU’s final guidelines reins in zero-rating by ISPs.
In all these cases then the result of banning zero-rating has been to impede the ability of a new entrant content company (whether for video, audio or cloud storage) to compete with established incumbents. Surely this is precisely the opposite of the effect that we would wish?
…I see no reason to have any specific rules or guidelines on zero-rating at all. EU regulators could simply apply the normal competition law principles – if (and only if) the practice amounts in practice to an abuse of a dominant position is would be outlawed (and the offender fined). Importantly there should, in my view, be no reason even to examine a zero-rating practice in the first place unless a complaint is made, and then the test the regulator should be applying is the normal competition law test, not something new around “undermining the essence of the end-users rights”.
Of course with this merger, the piper might be coming for the undefined U.S. laws as well—after all, Time Warner and AT&T’s merger is pushing the envelope in a lot of ways. In this case, it’s the specific plan they have for zero-rating users DirecTV services, as The Wall Street Journal reports:
When AT&T rolls out its $35-a-month DirecTV Now online TV service this month, its wireless subscribers will be able to stream as much as they want without it counting toward their monthly data caps. But if the same customers binge on outside services like Netflix or Hulu, those bits will add up—potentially leading to surcharges.
…Current and former regulatory officials in Washington believe that zero-rating could become the central internet policy issue in the AT&T-Time Warner deal review—just as “net neutrality” played a starring role during Comcast Corp.’s 2011 acquisition of NBCUniversal and its failed 2015 bid to buy Time Warner Cable Inc.
This is not the first thing that’s forced the agency to reexamine its stance (or develop one) on zero-rating. T-Mobile has been pushing the envelope on this subject all year, Verizon zero-rates go90 mobile video app and NFL games, and AT&T themselves have been doing the practice since 2014. Supporters of the practice see it as doing a service to consumers, allowing streaming services and TV networks to break into the market, while still promoting competition. After all, AT&T is offering the same payment terms to any company that wants to zero-rate with them.
Except, there’s a difference when those payments are just going in-house, according to critics. That’s a major disadvantage to DirecTV’s streaming rivals. And like The Wall Street Journal said, it could become the big issue in the AT&T-Time Warner merger.
Which leaves the FCC stuck figuring out how to address the issue. As with net neutrality, they’ve got lively support on both sides of the issue. Right now it’s a bit too early to tell whether the problem will be raised as a merger issue or as an industry-wide guideline for zero-rating. Like everything with net neutrality, the answer is blowing in the wind.