Overwhelming Majority of Wireless Customers want Free Data Services, Survey says

by Matt Klassen on April 13, 2016

3415322_f7008da4_mFrom the files of, “Did we really need a study to tell us that?” a new survey commissioned by the CTIA has found that an overwhelming majority of Americans would welcome the introduction of new free data options that would allow consumers to access more streaming video and other online content without it counting against their data caps.

In fact, some 77% of millennials surveyed said they would be “extremely likely” to sign up with a new carrier that offered free data options, just more proof that zero-rating content will be the new wireless battleground in a market where well over 95% of the available customer base is already locked into some sort of wireless agreement.

But of course things really aren’t that simple, for despite the fact that consumers are clamouring for more things that are free (no surprise there), the Federal Communications Commission is trying to parse its way through this emerging market trend to find out whether or not zero-rating online content can stand up to Net Neutrality regulations.

Briefly put, imagine zero-rating like the toll-free calling of the online world, where the cost of using a particular service, in this case data networks, is not passed on to the customer, but instead is eaten by the content provider or the network provider. T-Mobile was the first carrier to really embrace this new way of doing things, last year unveiling its wildly popular Binge On service, which continues to add more content partners by the month.

On the face of it zero-rating seems pretty straightforward, as going back to the toll-free calling analogy, I doubt there are many who would say that offering customers free calling is bad for business or for competition, but that’s exactly the argument we’re seeing here.

The problem with zero-rating, despite its obvious popularity, is that it impacts and guides consumers in ways that are ultimately problematic for industry competition. Consider that if you are looking to watch a particular video online and you have three choices, and two of those choices count against your data and one doesn’t, the chances of you opting for the free option are incredibly high, leaving other, perhaps better, services out in the cold.

As Stanford Professor Barbara van Schewick, a “Net Neutrality expert”, argued in a 51-page document (PDF) submitted to the FCC several weeks ago, zero-rating runs afoul of Net Neutrality because, “The program limits user choice, distorts competition, stifles innovation, and harms free speech on the Internet.”

In fact, by zero-rating certain services over others, carriers have assumed a great deal of control over Internet content, in ways that will undoubtedly influence consumer habits and in ways that will allow carriers to influence online competition, and once again make OTT providers beholden to network providers; a great scenario for carriers, but not great for the development and proliferation of online content.

Yet despite the fact that zero-rating seems to obviously violate Net Neutrality regulations, carriers are confident it will remain because they clearly have public opinion on their side. People like free, and like we’ve seen for the last several years with various data collection scandals through free online services and tools, people are unlikely to ask the right questions about those free things until it’s far too late.

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

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