Tech by VICE

Zero-Rating Harms Poor People, Public Interest Groups Tell FCC

Federal regulators face increasing pressure to address a controversial industry practice.

by Sam Gustin
Mar 28 2016, 9:00am

Jason Alden/Bloomberg via Getty Images

The nation's largest internet service providers are undermining US open internet rules, threatening free speech, and disproportionately harming poor people by using a controversial industry practice called "zero-rating," a coalition of public interest groups wrote in a letter to federal regulators on Monday.

Companies like Comcast, Verizon and AT&T use zero-rating, which refers to a variety of practices that exempt certain services from monthly data caps, to undercut "the spirit and the text" of federal rules designed to protect net neutrality, the principle that all content on the internet should be equally accessible, the groups wrote.

The letter, which was signed by the Center for Media Justice, the Open Technology Institute, Free Press, and dozens of other groups, increases the pressure on the Federal Communications Commission to address zero-rating, which has become the latest battlefront in the decade-long war between policymakers, industry giants, and consumer advocates over how best to ensure internet openness.

Zero-rated plans "distort competition, thwart innovation, threaten free speech, and restrict consumer choice—all harms the rules were meant to prevent," the groups wrote. "These harms tend to fall disproportionately on low ­income communities and communities of color, who tend to rely on mobile networks as their primary or exclusive means of access to the internet."

The groups point the finger at several industry giants, including AT&T, which offers a "sponsored data plan" that allows wireless customers to access certain services that don't count against monthly data limits; T-Mobile and its "Binge On" plan, which exempts some video services from data caps, while counting others against the monthly limits; and Comcast, which exempts its "Stream TV" service from monthly data caps, while counting rival services against the limit.

Industry giants argue that they are merely experimenting with new and innovative services

By excluding certain services from data caps, open internet advocates say these companies are engaging in a kind of reverse discrimination by favoring some services over others, thereby creating an economic incentive for customers to avoid services that remain subject to the caps. The principle of non-discrimination is at the heart of the FCC's landmark net neutrality rules, which are designed to ensure the internet remains an open, dynamic platform for economic growth, technological innovation, and citizen empowerment.

"These plans distort user choice by pushing people toward websites with deep pockets and away from smaller applications who can't afford the toll," the groups wrote. "This includes start­ups, small players, and non­commercial providers. In this way, sponsored data plans create the same kinds of harms to innovation and free speech as online fast lanes."

Malkia Cyril, co-founder and director of the Center for Media Justice, said in an interview that zero-rated wireless plans disproportionately affect people in underserved communities who are more likely to use mobile devices to connect to the internet.

"Poor people, communities of color, and people who have been pushed to the margins of society need equal and affordable access to the whole internet, not just these companies' preferred portions of it," Cyril told Motherboard. "Companies frame these services as a gift to consumers, but they're actually discriminatory profit-making schemes."

In response to such criticism, the industry giants argue that they are merely experimenting with new and innovative services. Comcast, in particular, has vehemently pushed back against critics, going so far as to argue that "Stream TV" is not an example of zero-rating because the service "does not go over the internet," but rather is delivered via the same "closed path" as its traditional cable offering.

Comcast's critics don't buy this argument. Earlier this month, the cable giant was hit with a complaint filed by DC-based consumer advocacy group Public Knowledge alleging that "Stream TV" is anticompetitive, illegal, and in violation of commitments Comcast made when it bought a controlling stake in NBCUniversal in 2011.

The FCC knows that zero-rating has become a contentious issue, and the agency has been holding discussions with some of the nation's largest broadband companies about their practices. In its net neutrality policy, the FCC did not explicitly prohibit zero-rating, but rather indicated it would address the issue on a case-by-case basis.

A FCC spokesperson declined to comment on the public interest groups' letter or the status of the agency's inquiry into zero-rating.