We tend to intuitively assume that all forms of differential pricing are discriminatory. This is not true. Differentiation is not the same as discrimination.
The vast majority of countries around the world do not ban all differential pricing and zero-rating programs. Of those jurisdictions that do place certain parameters on differential pricing and zero-rating practices, the majority have found that such offers can be structured to be non-discriminatory and consistent with net neutrality.
Examples of such offers include:
European Union
In the E.U., a range of differential pricing and zero-rating offers have been launched consistent with the net neutrality guidelines adopted by the Body of European Regulators for Electronic Communications (BEREC).
- Vodafone Pass: Vodafone Pass offers have been launched in multiple countries in the E.U. The offers provide consumers with zero-rated or differentially priced categories of services (e.g., social media, messaging service, or video categories). The offers do not automatically apply zero-rating or differential pricing to all services on the internet that fit a given category. Instead, the offers are launched with a number of services included in each category, but make clear that the categories are open to other similar services that want to be included in the offer and are technically compatible.
- Virgin Media: In the United Kingdom, Virgin Media launched a 4G mobile product including zero-rated use of certain messaging services. The offer was initially launched with only a small number of zero-rated messaging services. However, the operator made clear that the zero-rating offer was open to including any other messaging services that wanted to be included. Ofcom, the regulator in the UK, assessed the offer under the BEREC neutrality guidelines and found no need to open a formal investigation of the offer.
United States
In the U.S., the Federal Communications Commission released guidance in 2017 finding that the following offers are unlikely to be problematic:[1]
- T-Mobile Binge On: This is a zero-rating program open to any streaming video services that meet the program’s technical standards. T-Mobile does not charge providers or end users to participate in or use Binge On. BingeOn has uniform technical requirements for all interested content providers that numerous providers have been able to meet. The FCC found that Binge On appears not to discriminate against or disadvantage any content provider or end user. Therefore, the FCC found that the program it is unlikely to be problematic under the FCC’s net neutrality rules.
- AT&T Data Perks: This zero-rating program enables providers to offer AT&T’s mobile broadband subscribers extra data in addition to their monthly plan allowances as a reward for engaging in broadband activities such as purchasing products, viewing advertising, using promotional games or apps, completing surveys, or the like. Surfing the pages of the Data Perks app is zero-rated for users and the app enables users to access advertising and marketing offers without depleting their monthly data allowances by crediting users’ accounts with the amount of data used to download the app or game. The extra data AT&T Mobility subscribers “earn” by completing offers through Data Perks can then be used for any edge service. The FCC found that the program is unlikely to unreasonably interfere with or disadvantages any content providers’ or end users’.
Structures of Non-Discriminatory Zero-Rating Practices
Consistent with the offers discussed above, there are three structures of zero-rating offers, in particular, that are non-discriminatory:
- Zero-rating offers that are open to all services within a category of service (e.g., social media services, messaging services, etc). The Vodafone Pass offer is an example of this type of offer.
- Zero-rating offers that are open to all services that meet the same technical limitations. For example, an operator zero-rates all down-res video by uniformly applying technical limitations.
- Zero-rating programs that – rather than zero-rate certain categories of content – allow people to browse any site on the internet, but do not technically support streaming video or audio. The concept is similar to browsing the internet on a train or plane where you can view any site on the internet, but streaming video is not supported.
[1] See https://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0111/DOC-342987A1.pdf.