Does Verizon’s new Zero-Rated Video Service run afoul of Net Neutrality?

by Matt Klassen on February 11, 2016

Verizon-FreeBeeVerizon has decided to wade into the unsettled waters of Net Neutrality vs. Zero-Rating Video Services by announcing that all videos streamed through its Go90 mobile video content service will not count against one’s data cap. However, if customers stream videos from other sources, it will still chew up their monthly quota.

The move comes as a response to T-Mobile’s controversial Binge On service, one that in addition to zero-rating certain streaming video feeds (those who have partnered with T-Mobile), it also “optimizes” (hear: throttles) all mobile video streams to ensure better streaming service on mobile devices.

What’s interesting about Verizon’s decision to enter the zero-rating game is that it comes at a time when the practice is under intense scrutiny, as the Federal Communications Commission is embroiled in a debate over the legality of such offerings, investigating complaints about throttling, discrimination, and anti-competitive practices.

The issue with zero-rating video services is that on the surface it seems to be of great benefit to consumers, so one’s initial feeling is that offering video streams that don’t eat into customers’ expensive data plans is a very good thing. But looking closer we see that such zero-rating services are fundamentally discriminatory, as they favour certain video feeds over others, and thus drive user traffic towards some and not others. Such favouritism, it would seem, runs afoul of the FCC’s Net Neutrality order, whereby carriers like Verizon and T-Mobile are not allowed to direct traffic in such a manner, mandated instead to simply allow all traffic to flow freely.

It is this nebulous issue that currently has T-Mobile’s Binge On program under the FCC’s microscope, as it would seem the carrier is attempting to play favourites among content providers. According to some, though, the fact that T-Mobile is zero-rating third party content for particular customers of its Binge On program may ultimately redeem the entire project; Verizon’s efforts may not be so lucky.

One of the key issues in my mind is that Verizon is delivering content through its own video service that can indeed be found at other places on the Web, but while watching that content through Verizon’s app won’t count against your data cap, watching it elsewhere will.

Therefore, the problem with Verizon zero-rating the videos streaming through its Go90 app is that the carrier is, in effect, zero-rating itself, meaning that as opposed to T-Mobile who is attempting to create partnerships with content providers to expand its own Binge On offering, Verizon is ostensibly pitting itself against content providers, luring customers to its own video service in a way that seems ultimately unfair to its competitors who depend on Verizon’s network for their businesses.

Mixed in with all of this is Verizon’s attempt at creating a sponsored data program, called FreeBee Data 360, the toll-free calling of the online world, where advertisers and content providers would pay the fees for using the service. Verizon is defending its Go90 zero-rating efforts by saying that the company is effectively shouldering the burden of the sponsored content (meaning Verizon is effectively paying itself the cost of delivering free data through its in-house video app), and that by this circuitous route the company continues to abide by the FCC’s Net Neutrality standards.

Now if you followed all of that I have no doubt that you’ll be left with an uneasy feeling in the pit of your stomach: that Verizon is offering a sponsored data program whereby other carriers or content providers can pay Verizon the hefty data cost of zero-rating services, and now Verizon is taking advantage of its own sponsored program to ostensibly pay itself to zero-rate its own video content to lure customers away from content providers by discriminating against those providers’ data traffic, a move that will hamstring not only other carriers, but content providers as well.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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