Zero-rating is a practice employed by Internet Service Providers (ISPs) whereby certain internet services or applications do not count against the customer’s data cap or data usage limits. In other words, some specific services are allowed to be used without impacting the amount of data that the user is allowed under their internet plan. This can make certain services, like streaming video or music, more attractive to consumers since they can use these services without worrying about exceeding their data limits.
Applicability and Examples
Common Examples of Zero-Rating
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Music Streaming Services
ISPs may allow unlimited streaming from certain music platforms (e.g., Spotify, Apple Music) without affecting users’ data caps. -
Video Streaming Services
Some ISPs might partner with video streaming services (e.g., Netflix, YouTube) to provide zero-rated content. -
Social Media Platforms
Zero-rating social networking sites or apps (e.g., Facebook, Twitter) is also a common practice.
Historical Context
The practice of zero-rating has been around since the early 2010s. It grew out of the need for ISPs to differentiate themselves in a competitive market and to attract or retain users by offering added value to their services.
Regulatory Considerations
Zero-rating often intersects with discussions around Net Neutrality. Critics argue that zero-rating violates the principle of a free and open internet by creating preferential treatment for certain services. Supporters, on the other hand, advocate for zero-rating as a means to increase internet usage and accessibility, especially in regions with potentially limited broadband access.
Types of Zero-Rating
Sponsored Data
Here, a company or service provider pays the ISP to zero-rate their service. This is common among app developers who wish to promote their applications.
Self Zero-rating
The ISP itself zero-rates its own services, such as its streaming platform or cloud storage service.
Advantages and Disadvantages
Advantages
- Customer Attraction: Helps ISPs attract and retain customers by offering value-added services.
- Accessibility: Can increase access to specific online services, especially in data-scarce regions.
- Promotion: Allows new services to gain visibility without risking users’ data caps.
Disadvantages
- Net Neutrality Concerns: Creates a two-tiered internet, potentially discriminating against smaller services that can’t afford zero-rating.
- Market Distortion: Could distort market competition by favoring certain platforms over others.
Related Terms
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Net Neutrality: The principle that ISPs must treat all data on the internet the same way, and not discriminate or charge differently by user, content, website, or platform.
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Data Caps: A limit imposed by ISPs on the amount of data a user can transfer within a given billing cycle.
FAQs
Q1: Does zero-rating affect my internet speed?
A1: Zero-rating usually does not directly affect internet speed but it can lead to network congestion if many users access zero-rated content simultaneously.
Q2: Is zero-rating available in all regions?
A2: Zero-rating availability varies by region and ISP. Some regulatory environments restrict or prohibit zero-rating practices.
Q3: Can zero-rating help reduce the digital divide?
A3: Zero-rating can potentially increase internet usage among under-served communities by making certain services more accessible.
Summary
Zero-rating is a significant and often controversial practice in the telecommunications industry. Its impact on consumers and businesses varies widely, depending on regulatory environments and market conditions. While it offers clear benefits in terms of customer attraction and increased accessibility, it also poses serious concerns related to net neutrality and market fairness.
References
- “Net Neutrality: What You Need to Know Now,” Free Press, https://www.freepress.net/our-response/expert-analysis/insights-opinions/net-neutrality-what-you-need-know-now
- “Zero Rating: Threat or Opportunity?” Internet Society, https://www.internetsociety.org/resources/2021/zero-rating-threat-or-opportunity/
