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India Just Banned Zero-Rating. Your Move, FCC.

India’s landmark new open internet policy increases the pressure on American regulators to address a glaring loophole regarding zero-rating.
February 9, 2016, 1:00pm
A net neutrality protest in Hyderabad, India, last December. Image: Mahesh Kumar A./AP

India's landmark new open internet policy, which was hailed by net neutrality advocates around the world on Monday, increases the pressure on American regulators to address a glaring loophole in US federal policy that allows telecom companies to sidestep rules designed to preserve the internet's open and freewheeling nature.

Open internet advocates argue that this practice, known as "zero-rating," poses a serious threat to net neutrality—the principle that all content on the internet should be equally accessible—because it allows telecom companies to favor certain online services by not counting those services against monthly data caps.


One year after the Federal Communications Commission approved the strongest open internet protections in US history, zero-rating has emerged as the latest battlefront in the decade-long war over how best to regulate internet service providers. Open internet advocates argue that zero-rating strikes at the heart of net neutrality, because it gives telecom providers the power to "pick winners and losers" online, in direct contravention of FCC rules prohibiting companies from discriminating against certain types of content.

India's new policy, which bans zero-rating and the related practice of differential pricing, represents a dramatic defeat for Facebook, which had hoped to offer free mobile access to a limited number of websites and services in India through a controversial and hotly-contested plan called "Free Basics." India's new policy stops Facebook's plan dead in its tracks.

Malavika Jayaram, executive director of the Digital Asia Hub, a new think tank incubated by Harvard's Berkman Center for Internet & Society, described India's new policy as the result of an "Indian David vs. Facebook Goliath" struggle, but cautioned that the real challenge of bringing internet access to India's vast underserved population lies ahead.

Facebook remains "committed to keep working to break down barriers to connectivity in India and around the world."

"This is a victory for a broad movement that included policy experts as well as grassroots activists," Jayaram told Motherboard. "But this is not the end of the fight, because it does not answer the larger question of how to connect India's unconnected population to the entire internet, not just a select portion of it. That must be the focus moving forward."

Facebook insists that it merely wants to expand internet access in a giant country where hundreds of millions of people lack connectivity, and in a recent Times of India op-ed, CEO Mark Zuckerberg claimed, somewhat bizarrely, that Free Basics actually protects net neutrality. Critics argue that the plan would fundamentally undermine net neutrality by allowing one company to effectively create a circumscribed internet experience of its own choosing for millions of people.


India's SaveTheInternet coalition, a group of leading Indian tech policy experts, praised the Telecom Regulatory Authority of India—the country's equivalent of the FCC—for "putting an end to differential pricing services which would have allowed telecom operators to break the internet and become gate-keepers and toll-collectors."

In a Facebook post, Zuckerberg wrote that while he is "disappointed" with India's new policy, the company remains "committed to keep working to break down barriers to connectivity in India and around the world."

In its 2015 open internet order, which established strong net neutrality protections, the FCC did not explicitly ban zero-rating, nor did the agency condone it. Instead, the FCC indicated that it would address the issue on a case-by-case basis.

In recent months, open internet advocates have raised concerns about several forms of zero-rating, including Comcast's "Stream TV" in-home service, which is exempted from monthly data caps, as well as AT&T's "sponsored data plan," which effectively subsidizes certain types of content. Verizon Wireless has also joined the zero-rating party with its recently announced "FreeBee" sponsored data plan.

T-Mobile's "Binge On" plan, which exempts certain video services like Netflix from data caps, has been the subject of especially harsh criticism from open internet advocates, including Stanford law professor Barbara van Schewick, one of the nation's leading authorities on net neutrality.


"Binge On undermines the core vision of net neutrality," van Schewick wrote in a recent paper. "Internet service providers (ISPs) that connect us to the internet should not act as gatekeepers that pick winners and losers online by favoring some applications over others. By exempting Binge On video from using customers' data plans, T-Mobile is favoring video from the providers it adds to Binge On over other video."

"The FCC should have just come out and banned zero-rating in the first place"

Federal regulators have recently held discussions with some of the nation's largest telecom companies about their zero-rating practices, but the FCC has been tight-lipped about what actions it will take, if any, to address the concerns of open internet advocates.

The FCC has thus far acted cautiously with respect to zero-rating, in part because it doesn't want to be perceived as granting—or withholding—permission for telecom companies to innovate with new services, according to Matt Wood, policy director at Free Press, a DC-based advocacy group that supports net neutrality.

Nevertheless, the FCC has the duty to prevent telecom companies from favoring or discriminating against certain services, Wood said, adding that he expects the agency to clarify its position on zero-rating in the coming months.

"The FCC should have just come out and banned zero-rating in the first place," Vishal Misra, a professor of computer science at Columbia University who helped lead the fight against zero-rating in India, told Motherboard. "Now that the FCC has seen the world's biggest democracy take this clear stand, it gives them cover to act, and I think they will. I think this will have a domino effect."

A FCC spokesperson was not immediately available to comment on India's new policy, and what effect, if any, it might have on the agency's policy deliberation process.

Update: The headline of this post has been changed to reflect the fact that India's new policy bans zero-rating. Indian regulators are still working on broader net neutrality rules regarding blocking, throttling, and paid prioritization.