Verizon Unveils Zero-rating Option Similar to AT&T Plan
Verizon unveiled its FreeBee Data service, under which content providers can pay to provide consumers with data that doesn’t count against the data allowance in a subscriber’s monthly plan. A year ago, AT&T rolled out a similar service. FCC Chairman Tom Wheeler sent AT&T a letter in December asking about its plan (see 1512170030). Net neutrality proponents said Verizon’s plan potentially raises similar net neutrality concerns.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
“Verizon proactively let FCC staff know about the new offering and provided associated materials,” an FCC spokeswoman said. “We will continue to communicate with the company on this issue.”
Net neutrality concerns certainly would arise if Verizon sells sponsored data to Go90, its video affiliate, said Public Knowledge Senior Vice President Harold Feld. “To be clear, we at PK are happy to see Go90 competing in the [over-the-top] video marketplace, not only [on] Verizon's network but on other networks as well,” he said. “But it is also easy to see how Verizon could give Go90 a major advantage over competing OTT video providers if it sold Go90 sponsored data under advantageous terms.”
Net neutrality concerns are possible, said Matt Wood, Free Press policy director. “Though on superficial and preliminary first glance it doesn’t seem to trigger any of the bright-line rules, depending on how flexible entry into the program is,” Wood told us. “But what we really need to do is dig deeper and see how carriers’ arbitrary and punitive data caps are the real problem and the root of all of these exemption schemes."
Carriers expect subscribers “to jump for joy at the exemptions to data caps, but they don’t stop to ask why there’s a cap in the first place,” Wood said. “Is it sensible for the so-called sender to pay for data? What’s the user paying for then, if not access to the data they want to send and receive every month? Sponsored data is double charging, plain and simple, with carriers putting their hands out in both directions."
Feld asked why AT&T or Verizon needs even to impose data caps. “If money makes the problem magically go away, it is logical to ask if this is simply a means of exploiting the lack of competition to impose new charges for no better reason than ‘because we can,’” he said.
“FreeBee is the perfect example of how misguided the regulatory advocates are,” said economics consultant Ev Ehrlich, senior fellow at the Progressive Policy Institute. “The folks who will complain about the FreeBee program are really saying ‘the user has to pay the entire costs of the Internet’ even though there are obviously edge providers who are willing to share the cost,” Ehrlich emailed. “It's remarkable that the regulatory zealots … are the ones who want [to] put the entire cost burden of the system on the consumer.”
The Verizon service comes in two flavors. Under the FreeBee Data 360 service, content providers can provide consumers “some or all of their mobile content -- whether in an app or mobile website -- without using consumers’ data plans,” Verizon said. Providers pay using a per-gigabyte pricing model.
FreeBee Data allows content providers to sponsor consumer actions on a per-click basis, without data charges, “including mobile video clips, audio streaming, and app downloads,” Verizon said. Tests are to start Monday, and AOL, Gameday and Hearst Magazines already have signed up for a pilot program, the carrier said. Other brands are also welcome to take part in the trial, Verizon said. Broader commercial availability is expected later this year.
“With 1 in 3 Americans now watching videos on their smartphone, and another 100 million on tablets, the business case for mobile is clear,” said Colson Hillier, Verizon vice president-consumer products, in a news release. “In today’s digital economy, FreeBee Data is a departure from the one size fits all approach to marketing. The opportunity to add value and utility to consumers’ everyday experiences will fundamentally transform how brands and businesses connect with their customers.”
“FreeBee is an open service available for any interested sponsors, and offers nothing but upside for consumers," a Verizon spokesman said in response to net neutrality concerns. "Consumers will save money, while continuing to have access to all the content the Internet has to offer.” Similar business arrangements exist elsewhere in the economy, the spokesman said. "If a consumer orders something they know they want, they often pay the shipping. But if a business wants to encourage more sales, they may pay for the shipping. Likewise, advertisers pay to mail coupons and catalogs to consumers, and everyone benefits. This is the same idea.”