Mark Goldberg


Zero is better than nothing

Should service providers be allowed to offer access to certain applications for a flat rate – or free?

That is a question receiving considerable attention, thanks in part to a piece written by Harvard visiting professor Susan Crawford, who said “On the surface, it sounds great for carriers to exempt popular apps from data charges. But it’s anti-competitive, patronizing, and counter-productive.”

Uh, oh.

“Anti-competitive, patronizing, and counter-productive” sounds pretty bad. But there’s more. Professor Crawford goes on to say “Zero-rating is pernicious; it’s dangerous; it’s malignant.”

Wow. Who would even consider offering such services?

Actually, there are a lot of consumer benefits that could accrue from such services. For example, 7 years ago I suggested that Netflix might want to enter into an arrangement that is effectively the same as toll-free (1-800) calling, to reverse the charges for data usage.

Boston College law professor Dan Lyons says “Professor Crawford’s argument is premised on the notion that consumers need access to all Internet content at all times on all devices at the same price.”

He writes that offerings such as social media packages or a streaming media service help consumers. Some customers may be willing to pay $12/month for mobile Facebook access but would not pay $60/month for a broader wireless broadband plan. “Eliminating [such options] forces those customers to choose between two suboptimal choices: either pay a higher price to get services the customer is uninterested in purchasing, or go without the service the customer wants to buy.”

What about data consumption for Video Relay Services? As I wrote last January, “Could such a “toll-free” data model enable more equitable treatment of data use by Video Relay Service consumers?”

Seniors are among the least likely demographic to have a smartphone (and therefore, a data plan), but these are the people that could be among the most attractive targets for health monitoring apps. Do we really want regulations that preclude targeted pricing strategies? Should carriers be able to offer restricted flat-rate, zero-rated or sponsored data plans to encourage more widespread adoption of health monitoring applications and devices?

More than 7 years ago, I asked a similar question in relation to a toll-free model for home internet:

Are there some applications that might lend themselves to a toll-free model in order to reach the rest of the market?

For example, would home health care warrant installing a broadband connection as part of a monitoring service? The broadband access would be enabling underlying service, but the costs would be incurred by the health care agency, not the infirmed. Like toll-free calling, the application provider would pay the charges.

Your aging grandmother may have no idea that she would have a broadband connection coming into her apartment – perhaps complete with a wireless router. All she would know is that she can stay at home for routine monitoring check-ups.

Besides health care and elder-care, what other applications might “reverse-the-charges” for broadband access? Security services? Gaming? Entertainment? Energy management?

As Professor Lyons wrote,

Ultimately, it is consumers who should command policymakers’ attention – not the hypothetical “next Facebook”

Consumers can benefit greatly from creative, competitive, targeted pricing plans. Regulators need to be careful imposing restrictions on the evolution of business models.

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