ITIF: Binge On and zero-rated data 'unlikely to harm the open internet'

Yet another organization is backing zero-rated data offerings such as T-Mobile's (NYSE:TMUS) Binge On, saying they benefit consumers and are unlikely to threaten an open internet. But whether they actually violate net neutrality principles -- and whether they're fair to all content providers -- is still unsettled.

The Information Technology and Innovation Foundation, which describes itself as "a nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy," published a paper in support of offerings that allow users to access content and services without incurring data charges. Such offerings include Binge On and Music Freedom, which simply provide free content in an effort to lure users, as well as Verizon's (NYSE: VZ) FreeBee Data, which enable content providers or other parties to pay the data freight on behalf of consumers.

"The crux of the controversy is whether the practice of zero rating violates the spirt of network neutrality principles," the ITIF wrote in the 23-page document. "Strictly speaking, zero-rated data is treated differently than other data in a way that influences consumer behavior. But adhering to such a strict interpretation of net neutrality would be misguided. Zero-rated products are unlikely to harm the open internet; instead they are a sign of healthy product differentiation that more efficiently allocates scarce resources in a competitive market, ultimately improving consumer value. The Federal Communications Commission -- along with other regulators around the world -- is examining zero rating, and while its case-by-case approach to overseeing these programs is sound, telecom regulators should make it clear that they believe nonexclusive zero-rating programs are in the public interest."

Mobile network operators increasingly view zero-rated services as a way to grow their subscriber bases or generate revenues -- or both -- but those services have come under fire from net neutrality proponents who claim that, among other things, they provide an unfair advantage to deep-pocketed content providers who can afford to pay for access to mobile subscribers. The FCC continues to monitor zero-rated data offerings, and has even summoned AT&T (NYSE:T) and T-Mobile to discuss their policies for such services.

The ITIF's report follows the release of a white paper earlier this month by the Multicultural Media, Telecom and Internet Council (MMTC) that claimed zero-rated mobile data offerings are an effective way for low-income users to access broadband services. The MMTC document declared that "the benefits and impacts of free data are profound and wide-ranging."

For more:
- read this ITIF report

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