CONTENTS
Introduction1
Regulation out-of-step with the market
2
The internet in 2005
3
The internet in 2017
3
Zero rating points to a competitive market
4
Zero-rating models from other markets
5
Conclusion5
About the author6
R STREET POLICY STUDY NO. 88
March 2017
ZERO RATING IN A
­COMPETITIVE BROADBAND
MARKET
Steven Titch
INTRODUCTION
Z
ero rating—that is, not charging end users for some
categories of data use—represents the response of a
functioning telecommunications market to consumer demand for broadband content. Unfortunately, not
all regulators regard it that way, which could be bad news for
innovation and consumer choice.
With zero rating, or toll-free data, an internet service provider does not count downloads from certain content providers against the pre-set data cap in a consumer’s plan. For
example, if a consumer’s monthly plan included 1 gigabyte
of data, he or she would be able to stream about 340 tracks
on Spotify, 68 video plays on YouTube or 60 minutes of video
on Netflix.1 However, should these content providers have
zero-rating agreements with the service provider, consumers would be able to access the services as much as they want
without worrying about being charged for data overages.
1. Sites such as Confused.com offer online bandwidth calculators, available at https://
www.confused.com/mobile-phones/mobile-data-calculator.
By definition, zero-rating plans reduce prices and increase
value for consumers. Nonetheless, the practice has been
under attack from some quarters as anti-consumer and
monopolistic. For partisans on one side of the net-neutrality
debate, the practice of zero rating long has generally been
assumed to be harmful.
Zero rating likely wouldn’t be the subject of federal scrutiny
were network neutrality not codified by the Federal Communications Commission in February 2015 with its Open
Internet Order. But ultimately, net neutrality may simply be
a fundamentally flawed framework through which to evaluate the practice. Among the unintended consequences of
the nondiscrimination order’s mandate to treat broadband
infrastructure as a commodity—a one-size-fits-all, end-toend approach commonly referred to as the “dumb pipe”
model—has been to prohibit broadband providers from
experimenting with different network architectures. Forced
commoditization—that is, the insistence that all competing
broadband services be marketed the same way—leaves service providers with very little, if any, room for innovation
through service integration or changes in network standards
and architecture.2
Proponents of network neutrality argue that this is how the
internet itself took shape. From a technical perspective, it’s
true that the internet evolved as a network-neutral platform.
However, one should question whether its designers intended the marketing of internet services to be irrevocably tied to
the concept of neutrality. As Christopher Yoo of the University of Pennsylvania Law School put it in 2004:
[A]cademic debates and the arguments currently
being advanced before the FCC have largely overlooked the fact that there is a crucial difference
2. Kyle Dixon, et al., “A Skeptic’s Primer on Net Neutrality Regulation,” Progress on
Point, p. 7, June 2006. http://www.pff.org/issues-pubs/pops/pop13.14primer_netneut.
pdf.
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­ OMPETITIVE BROADBAND MARKET 1
between embracing the end-to-end argument as a
design principle and elevating it into a regulatory mandate. While adherence to the end-to-end argument
may make sense in most cases, circumstances do exist
in which mandating network neutrality would actually harm competition.3
Zero rating appears to be one of those circumstances. It represents an innovative and competitive pricing strategy that
could bring internet connectivity to low-income and budget-minded consumers. As one example, T-Mobile’s Binge
On feature offers consumers unlimited wireless data from
selected services, ranging from Pandora music to Google
Maps. AT&T offers a pricing plan in which consumers are
granted unlimited wireless data if they bundle their service
with the company’s DirecTV satellite-television service.
For its part, T-Mobile illustrated the benefits of zero rating
last year in a television ad in which a young female driver
must choose between streaming music by pop singer Ariana
Grande or using her navigation app.4 The ad underscores
that, with the Binge On feature, the driver can get her music
and her app without paying more.
But less than two years after the Open Internet Order was
issued, zero rating’s broader adoption could be stymied by
misguided regulation. T-Mobile’s plan has come under fire
from net-neutrality advocates as a violation of the rule, even
though the plan makes the company more competitive with
AT&T and Verizon, each of whom has more than twice as
many subscribers.5 In November 2017, former FCC Chairman Thomas Wheeler called for an investigation of AT&T’s
pricing plan, citing net-neutrality concerns. While newly
installed Chairman Ajit Pai has dropped that investigation,
net-neutrality advocates plan to continue the fight.6 Zero rating also may re-emerge as a concern in the proposed mergers
between Verizon and Charter Communications and AT&T
and Time Warner.
It isn’t just U.S. regulators who have taken a dim view of zero
rating. International activist groups such as Access Now
were among the voices who pushed Brazil’s government to
ban zero rating.7 In its guidance to national members, the
Body of European Regulators of Electronic Communications
(BEREC) stopped short of banning the practice, but confirmed some zero-rating plans would breach the new rules.8
Telecommunications regulators in India made perhaps the
most counterproductive ruling, blocking a plan by Facebook
to offer inexpensive open-platform internet connectivity that
provided unlimited data not only to Facebook, but numerous other commercial and noncommercial sites. In doing so,
India’s regulators denied access to millions of citizens who
could not afford internet service at conventional rates.9
This policy study contends there are three primary reasons
the FCC should halt efforts to ban or regulate zero rating:
•
Consumers benefit by getting more content value for
their dollar;
•
Zero rating is based on a voluntary agreement by two
parties, each of whom sees a benefit from the pact;
and
•
It is a manifestation of a competitive market, not a
leveraging of monopoly power
REGULATION OUT-OF-STEP WITH THE MARKET
Net-neutrality policy is a response to fears that internet service providers’ control of network bottlenecks could be used
to choke off access to websites and applications, particularly
those offering services that compete with the ISP’s own. As
an example, net-neutrality advocates often cite the attempt
by a small telephone company, Madison River Communications, to block consumer access to Vonage, the pioneer in
voice-over-internet calling.
While the Madison River case is a troubling example of an
ISP attempting to abuse its bottleneck position, it’s also the
only notable one to date. Madison River was fined by the
FCC for doing so, as selective blocking of access to websites and deliberate opacity about transmission speeds and
other information about service long have been prohibited.
The Madison River case dates from 2005, a decade before
3. Christopher Yoo, “Would Mandating Broadband Network Neutrality Help or Hurt
Competition? A Comment on the End-to-End Debate,” Journal on Telecommunications and High Technology Law, Vol. 3, Issue 1, p. 26, Fall 2004. http://jthtl.org/content/articles/V3I1/JTHTLv3i1_Yoo.PDF.
4. T-Mobile Commercial, “Ariana Grande – Side to Side,” viewable on YouTube, Oct.
10, 2016. https://youtu.be/xvANl6IBQ-U.
5. Chris Marsden, “Donald Trump may end net neutrality,” Phys.org, Feb. 9. 2017.
https://phys.org/news/2017-02-donald-trump-net-neutrality.html.
6. Shelby Carpenter, “Net Neutrality Expert: T-Mobile’s Binge on Will Lead Internet
Down ‘A Slippery Slope,’” Forbes, Feb. 2, 2016. http://www.forbes.com/sites/shelbycarpenter/2016/02/02/net-neutrality-expert-t-mobiles-binge-on-will-lead-internetdown-a-slippery-slope/#4e06095e48ff.
7. Javier Pallero, “Access submits comments on zero rating to government of Brazil,”
Accessnow.com, April 2, 2015. https://www.accessnow.org/access-submits-comments-on-zero-rating-to-government-of-brazil/.
8. Out-law.com, “EU takes tough stance on ‘zero-rating’ practices in new net neutrality guidelines,” Aug. 31, 2016. http://www.out-law.com/en/articles/2016/august/eutakes-tough-stance-on-zero-rating-practices-in-new-net-neutrality-guidelines/.
9. Sankalp Phartiyal and Himank Sharma, “India introduces net neutrality rules barring Facebook’s free Internet,” Reuters, Feb. 8, 2016. http://www.reuters.com/article/
us-india-regulator-netneutrality-idUSKCN0VH162.
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the FCC codified network neutrality in the Open Internet
Order.10
The significance of the Open Internet Order was its codification of the notion that all internet traffic should remain
equally “best effort.” This egalitarian notion dates from
the birth of packet switching in the 1960s, when virtually
all traffic was text-based and, because of the limits of the
technology, could be nothing but best effort. The end-to-end
best-effort principle carried through creation of the internet
protocol (IP) in the early 1980s, when phone companies were
still regulated monopolies and there might have been reasonable fear they could interfere with packet-switched IP traffic.
As Christopher Yoo pointed out, the design principle ultimately became a regulatory mandate.11 But both market and
technological conditions are much different today, when ISP
connectivity can be achieved through cable, telephone or
wireless infrastructure in a competitive ecosystem made up
of multiple content, service and applications providers that
each bring their own value to the market. Unsurprisingly,
attempts to impose rules designed for a different medium
and vastly different conditions can’t help but create unintended problems.
In technological terms, the 1980s are ancient history. But
even if we compare 2017 to 2005, the year when the push
for network neutrality began to intensify in policy circles,
we see profound changes in the way the internet is accessed,
used and applied.
The internet in 2005
Cable television, as the main home-entertainment provider,
anchored broadband in 2005. “Triple Play” was the buzzword. Cable companies delivered broadband as part of a
three-legged platform that bundled internet and telephone
service with multichannel cable TV. Cable TV revenues supported broadband connectivity. Cable companies’ experience in the entertainment business gave them an advantage
over incumbent phone companies, who—despite initiatives
like FiOS that sought to build out more advanced fiber-based
networks—still struggled for market share. Efforts by municipalities to compete with both cable and telephone companies fared even worse.
In 2005, the iPhone was still two years away. At the time,
wireless broadband was no match for wireline. Wireless carriers were still struggling with data-transmission protocols,
10. See Federal Communications Commission, “Consent Decree in the Matter of Madison River Communications, LLC and affiliated companies,” File No. EB-05-IH-0110,
FRN: 0004334082. https://apps.fcc.gov/edocs_public/attachmatch/DA-05-543A2.
pdf.
11. Yoo, 2004.
while landline broadband applications were getting more
and more bandwidth-intensive. The potential of Wi-Fi networks was beginning to be understood, but there were only
143,700 public hotspots worldwide.12
High-bandwidth content streaming was limited. In 2005, if
you wanted to watch a movie on the internet, you had to
download it first, most likely in the form of a pirated file
accessed via a dubious file-sharing service. The download
could take as long as an hour or more, and video playback
would be low resolution. Video streaming was nascent. YouTube was founded in 2005, but video duration was limited
to 10 minutes.
There was minimal social networking a dozen years ago.
Myspace was the up-and-coming name in social networking, but did not resemble the multimedia, integrated platforms of today’s LinkedIn, Pinterest and Facebook. Rather,
social networking’s novelty and popularity among teens and
young adults hurt its growth among older users and, perhaps
unjustly, bestowed it a reputation as a hangout for predators.
The internet in 2017
Consumer “cord-cutting” has challenged the triple-play
model. Consumers still want a broadband connection, but
they are less interested in paying $100 to $150 a month for
multichannel cable TV service to go with it. Bandwidth
improvements have made video streaming a viable alternative to bundled cable TV. What started with Netflix has
now extended to Amazon and Hulu. Broadcast and cable
networks have their own streaming applications, which are
conveniently brought together by platform providers such as
Roku. “Binging,” the act of watching an entire 13- or 22-episode season over the course of a few days, has entered the
lexicon. A total of 24.6 million households—20.4% of all U.S.
households—were cable-free at the end of 2015, according
to market research firm Convergence Consulting. The firm
projected that figure would rise to 26.7 million households,
or 21.9 percent of all U.S. households, by the end of 2016.13
Consumers are more sophisticated in understanding the
internet and its applications than they were in 2005. While
most consumers may not know the intricacies of data-transmission protocols, they do know how the internet is supposed to work and can differentiate among value propositions offered by cable and wireless broadband alternatives.
Cable companies are rapidly losing their historic advantage
as multichannel TV distributors. Consumers increasingly
show they value the connection alone more than whatever
12. Rob Beschizza, “Number of WiFi Hot Spots Up 47% On 2005,” Wired, Nov. 3,
2006. https://www.wired.com/2006/11/number_of_wifi_/.
13. Aaron Pressman, “More than One in Five Households Have Dumped the Cable
Goliath,” Fortune Tech, April 5, 2016. http://fortune.com/2016/04/05/householdcable-cord-cutters/.
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bundle might come with it. This is a market-driven boon to
competition, as it increases the competitiveness of service
from wireless and traditional landline phone companies.
Wireless broadband is now competitive. Apple’s iPhone,
which validated consumer demand for robust wireless-data
applications as long as the interface was easy, arguably did
more to spur wireless-broadband innovation than any other
consumer device. As a result, today’s consumers carry the
internet in their pocket, while sales of desktop PCs and laptops decline.14
Today’s internet also offers far more than just access to websites or even streaming services. Of all the innovations of the
past 10 years, perhaps the most significant is the machine-tomachine networking that is becoming known as the “internet
of things.” Internet-of-things devices interact with artificial
intelligence-powered virtual assistants like Amazon Echo
and Google Home. The internet of things ultimately will
serve as the foundation for everything from autonomous
vehicles to smart homes to automated manufacturing.15 In
this environment, deliberate government policy to block
attempts at specialized differentiation on the pricing or handling of internet applications could serve to stifle innovation.
ZERO RATING POINTS TO A COMPETITIVE
­M ARKET
In the contemporary environment of multiple carriers, service providers and content providers—each with their own
quality requirements—zero rating is a competitive-market
response to consumer demand for efficient delivery of broadband content.
In T-Mobile’s zero-rating structure, content providers agree
to allow the ISP to use network-management tools and techniques to deliver high-bandwidth traffic across its network.
This is a critical requirement for such applications as streaming video. Regular drawbacks of best-effort packet switching,
such as dropped packets or congestion latency, do not affect
email or Twitter messages, but can be devastating to realtime video streams. Although entertainment comes to mind
first, real-time video also is critical in life-or-death situations
like telemedicine and emergency response. This is especially
acute for wireless-service providers, who face tighter bandwidth constraints than their landline counterparts.
The techniques T-Mobile uses with zero-rating partners
involve compression and grooming that reduce the amount
of data transmitted. This has led some groups, such as the
14. David Meyer, “Apple’s MacBooks Lose Market Share as PC Shipments Decline
Again,” Fortune, July 12, 2016. http://fortune.com/2016/07/12/apple-macbook-market-share/.
15. Matt Burgess, “What is the Internet of Things? Wired explains,” Wired, Jan. 25,
2017. http://www.wired.co.uk/article/internet-of-things-what-is-explained-iot.
Electronic Frontier Foundation, to accuse the company of
“throttling” data, a violation of network neutrality.16 Others—
including Reed Hastings, CEO of Netflix (Netflix is a Binge
On partner) and an ardent net-neutrality supporter—dispute
this. Hastings noted during the company’s fourth quarter
2015 earnings call that Binge On is an open platform:
Many of our competitors such as Hulu and HBO are
in the program also. But it’s an open, no-charge program where they are really focused on trying to get the
customers some [benefits] and then you get unlimited
viewing which, you know, their customers are choosing in droves.17
Service plans with unlimited data carry monthly costs that
put them beyond some consumers’ budgets. Conversely, an
inexpensive plan with an overly restrictive data cap will force
consumers to limit use of some applications. Service providers use zero rating to balance pricing and value in ways that
grant choices for different kinds of consumers.
At the same time, content providers like Google, Hulu and
Facebook desire traffic to drive advertising revenues. Netflix
wants to give paying subscribers every opportunity to access
programming. Regulators who see zero rating as exploitive
overlook this supply-side objective. Content providers want
to reach viewers. Device makers want to sell phones, tablets and laptops. Service providers want to maximize use of
their network infrastructure. Consumers want to extract full
value from their internet service. Zero rating is an example of
all parties coming together voluntarily to create a consumer
pricing point that serves everyone’s objectives.
For this reason, the attacks on AT&T’s bundling of unlimited data as part of its DirecTV Now package were puzzling.
Under the plan, AT&T customers get unlimited wireless
data, including as much video as they want, if they bundle
DirecTV satellite service with their wireless service. AT&T
asks content suppliers to cover their customers’ usage costs,
very much akin to the toll-free calling model, explored in
greater depth in the next section.18
DirecTV Now is AT&T’s competitive response to cable TV
cord-cutting. When a customer ditches cable TV, he or she
must choose either to give up their cable-modem connection or pay a substantially higher price for standalone inter16. Jeremy Gillula, “EFF Confirms: T-Mobile’s Binge on Optimization is Just Throttling,
Applies Indiscriminately to All Video,” Electronic Frontier Foundation, Jan. 4, 2016.
https://www.eff.org/deeplinks/2016/01/eff-confirms-t-mobiles-bingeon-optimizationjust-throttling-applies.
17. James Risley, “Netflix CEO Reed Hastings praises T-Mobile’s controversial Binge
On program,” GeekWire, Jan. 20, 2016. http://www.geekwire.com/2016/netflix-cfopraises-t-mobiles-contreversial-binge-on-program/.
18. Aaron Pressman, “How AT&T Is Challenging Net Neutrality with Its New Internet
TV Service,” Fortune Tech, Nov. 29, 2016. http://fortune.com/2016/11/29/att-netneutrality-directv-now/.
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net service. By bundling wireless data with multichannel
satellite TV service, AT&T hopes to make cable-modem
replacement much more attractive. To be sure, the quality
of wireless data in the home is dependent on the strength of
network coverage, so there are tradeoffs for the customer to
consider. Nonetheless, AT&T’s pricing plan is evidence of a
robust competitive market, not a stagnant duopolistic one.
In response to DirecTV Now, the FCC sent the company a
letter warning that its plan violated network neutrality, even
though the plan applied solely to pricing and did not involve
the network-management components that T-Mobile’s
Binge On feature has.19 The FCC’s letter points to how regulation can spread into areas never envisioned in the original
order, such as pricing strategies.
ZERO-RATING MODELS FROM OTHER MARKETS
Zero rating is a modern buzzword, but the ideas behind it are
far from new, either in telecommunications specifically or in
other comparable markets. A few notable comparisons from
history come to mind.
Toll-free calling: In the monopoly days, when long-distance
calling could cost $1 a minute or more, businesses used tollfree numbers to encourage customers to call reservation
lines or customer-service representatives. It benefited consumers, who could connect to favored businesses without
incurring toll charges, but was not considered unfair to businesses that could not afford to pay for toll-free lines.
Expedited delivery: Although common carriers are subject
to laws that require their service be available to all customers, they generally are permitted to offer expedited delivery for a higher price. The U.S. Postal Service has Priority
and Express Mail. FedEx Corp. has price schedules for next
morning, next day and two-day delivery. Airlines and railroads are permitted to offer passengers first-class, businessclass and coach fares, with a commensurate level of service
and comfort.
Product bundling: It is a time-honored sales tactic to assemble several individual yet complementary products, such as
a burger, fries and Coke—or airfare, lodging and golf-course
greens fees—and price the combined package for less than it
would cost if each item was bought individually. In return for
the discount, the consumer may sacrifice some choice, but
that is a legitimate part of the value proposition.
Warehouse retail: Membership-based warehouse retailers,
such as Costco and Sam’s Club, offer a wide range of merchandise packaged in bulk, but from a limited range of brands.
19. AT&T has since introduced Stream Saver, its own zero-rated wireless plan modeled
on Binge On. Verizon has a similar plan called Go90.
These retailers press suppliers to meet low wholesale price
points. In return, the supplier can expect a large amount of
bulk orders and limited in-store competition. For suppliers of
Costco and Sam’s, it’s yet another value proposition. Costco
succeeds in delivering consumers low prices and better value
because some suppliers are willing to accept a lower price in
return for the potential of moving more product.
CONCLUSION
Markets are regulated to prevent consumer harm. Banning
zero rating on the basis of network neutrality elevates the
value of the regulation itself above the interests of the constituency it was designed to protect. Zero rating lowers costs
for consumers and, as per Metcalfe’s Law, increases the value of the internet by expanding user access.20 Zero rating
creates greater competitive differentiation among service
providers. Such effects are not characteristic of a monopoly
market, which by definition is dominated by a single strong
player, stagnant growth, rising prices and diminishing value.
While the best regulations foster competition, regulators
should not tilt market conditions in favor of one group of
companies at the expense of another. Content providers like
Google, Netflix, Facebook, Twitter and Spotify all partner in
zero-rating plans and often are the same size and even larger
than ISPs. When they wish to use ISP facilities to do business—facilities that are privately owned and built through
commercial financing—a lawful government should not
demand those facilities be surrendered as a public commons.
ISPs have a right to extract value from their investments.
Zero rating demonstrates that this can be accomplished
through voluntary transactions from which all parties,
including consumers, derive benefits.
Critics say that zero-rating plans are unfair to content providers who can’t afford to participate in such agreements.
The concern is that the “next Netflix” will be hurt because
of its inability to get the same treatment. This is ironic, given that the concern that originally drove the FCC’s Open
Internet Order was that service providers would create “fast
lanes” for deep-pocketed content providers.21 Essentially, the
opposite has happened. As we have seen, content providers
with hefty bandwidth needs are agreeing to mechanisms that
limit their consumption of bandwidth capacity in return for
wider reach.
In addition, when large-bandwidth applications are exempt
from usage caps, consumers can use their data “budget” on
20. BusinessDictionary.com. Metcalfe’s Law states that the total value of a network
to its users grows as the square of the total number of its users. Named for Robert
Metcalfe, co-inventor of the Ethernet protocol. Available at http://www.businessdictionary.com/definition/Metcalfe-s-Law.html.
21. Public Knowledge, “Take Action on Net Neutrality,” accessed Feb. 27, 2017. https://
www.publicknowledge.org/take-action-to-prevent-fast-lanes-on-the-internet.
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other applications. This actually may help smaller competitors, as consumers will be able to sample them without sacrificing their current favorites. In addition, applications that
are important, yet not as glitzy as entertainment, stand to
gain better accommodation. Distance learning is one such
example, as well as access to basic email and social and professional networking sites or those that offer information
about jobs and health.
tive of the spirit of the Open Internet Order.24 Wheeler only
began to backpedal after complaints from advocacy groups,
not from the companies themselves. His ambiguity was on
display through the end of his term. He never fully called
zero rating a violation, and he waited until the postelection
“lame duck” period to chastise AT&T.
This was the tragedy of the decision by the Telecom Regulatory Authority of India to halt Facebook’s Free Basics program offered through its Indian partner, Reliance Communications. Facebook offers Free Basics in 40 countries, many
of them in the developing world. In India, Facebook Basics
included more than 100 apps and sites, from math tutorials
to Baby Center LLC, a parenting informational site owned
by Johnson & Johnson. Facebook benefited because
access to its site was zero-rated. In addition, the plan was
so economical that millions of Indians could afford access
before the government shut it down.22
While network neutrality remains a contentious issue, zero
rating should not be viewed as market exploitation, nor as a
violation of the nondiscrimination principle. Certainly, the
industry players who have come together in such programs
do not see it as such. Instead, it is a marketplace solution
that stands to meet many of the internet policy objectives
the FCC and regulatory agencies around the world desire:
cheaper rates, greater access, greater customer choice and
a wider array of applications and a la carte choices in multichannel TV programming. The incoming FCC chairman
should put past regulatory actions aside and embrace zero
rating as the kind of consumer-friendly pricing innovation
that healthy, functional and competitive markets produce.
The decision in India was a significant setback, particularly
for the more than 1 billion Indians who currently have no
internet access. Unfortunately, skepticism about zero rating in the United States, which tends to model regulatory
strategy for the world, gave TRAI and regulatory agencies
in other countries legitimate cover.23
ABOUT THE AUTHOR
Steven Titch is an associate fellow of the R Street Institute, focused
on telecommunications, the internet and information technology.
He also serves as a policy adviser to the Heartland Institute and is a
former policy analyst at the Reason Foundation. His columns have
appeared in Investor’s Business Daily, the Washington Examiner and
the Houston Chronicle.
Facebook’s zero-rating initiative, along with statements by
Netflix’s Reed Hastings in support of T-Mobile’s Binge On,
should give regulators pause. After all, Netflix and Facebook,
along with Google and numerous other content and applications companies, were vigorous supporters of the Open
Internet Order and of network neutrality generally. If they
contend that zero rating is not a net-neutrality violation, it
should be considered strong evidence that it’s not. Even the
Wikimedia Foundation, operator of the nonprofit Wikipedia
site and another net-neutrality proponent, offers Wikipedia
Zero, a zero-rated version of its encyclopedia website.
Titch also was co-founder and executive producer of Security
Squared, a business-to-business web publication covering IT convergence in physical security and surveillance. Previously, Titch was
editor of Network-Centric Security and director of editorial projects
for Data Communications magazine. He also has held the positions
of editorial director of Telephony, editor of Global Telephony magazine, Midwest bureau chief of Communications Week and associate
editor-communications at Electronic News.
The Open Internet Order allows for “reasonable network
management.” Given the examples of zero rating’s tangible
benefits throughout this paper, and the participation it has
drawn from the industry’s biggest consumers of bandwidth,
zero rating clearly meets the definition. When Binge On was
introduced, even former FCC Chairman Wheeler praised it
as “highly innovative and highly competitive” and illustra-
22. Mike Godwin and Sharada Srinivasan, “Charting a Path Forward for Internet
Access in India,” R Street Institute, March 2016. https://www.rstreet.org/wp-content/
uploads/2016/03/RSTREETSHORT20.pdf.
23. Sean McLain, Joanna Sugden and Deepa Seetharaman, “India’s Regulator Effectively Bans Facebook’s Free Basics Service,” The Wall Street Journal, Feb. 9, 2016.
https://www.wsj.com/articles/indian-telecoms-regulator-effectively-bans-facebooksfree-basics-service-1454930618.
24. Jon Brodkin, “T-Mobile’s data cap exemption for video gets FCC chairman’s
approval,” Ars Technica, Nov. 19, 2015. https://arstechnica.com/business/2015/11/tmobiles-data-cap-exemption-for-video-gets-fcc-chairmans-approval/.
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