If you read some recent tech news reports, you’d think wireless carriers have committed an act of sedition. The overblown debate about sponsored data, or zero-rating, as it’s otherwise known, reached fever pitch with the finding that T-Mobile provides less than high-definition video to its customers through its Binge On service. Gasp! How will we live?
The entire episode reignited a debate about whether wireless carriers can and should be providing their consumers with sponsored data services. In theory and in practice, sponsored data benefits consumers. Not only do consumers benefit from being able to enjoy their favorite sites, music, videos, app downloads and even Web searches without it counting toward their data plans, but it also leaves them with additional data to get more use out of their monthly plans. I don’t see what’s not to like about this.
The concept of sponsoring data or defraying some of a consumer’s cost to enjoy a particular product or service is an old one. It’s the same idea behind toll-free numbers, prepaid return labels and even practices like Zipcar providing gas cards for its rentals. They are benefits paid for by companies with the aim of making things easier for their customers. The concept has merely progressed to meet the reality of our digital era.
T-Mobile is not the only one moving in this direction. AT&T has a similar sponsored data program, and Verizon recently unveiled its own sponsored data offering, FreeBee. If three of the four largest wireless carriers in the country are coalescing around this idea, it’s a good sign that this is a worthwhile pursuit to better serve their customers. Wireless carriers are under tremendous pressure to innovate in ways to attract new customers and retain their existing ones. This flurry of sponsored data offerings is further evidence that the wireless marketplace is ferociously competitive.
Yes, wireless carriers can reach mutually beneficial arrangements with content providers to offer the sponsored content, but is that so surprising or life altering? Critics who argue against these types of business arrangements are sometimes so suspicious that they lose sight of the fact that consumers come out as winners here too. After all, companies are footing the bill for consumers’ data usage — what’s not to like?
Yet some detractors have gone as far as to call on regulators to pre-emptively investigate and put an end to sponsored data offerings. Critics argue that it may go against the “spirit” of open Internet rules. I couldn’t disagree more. Regulators must be cautious not to enforce rules so rigidly that they deprive consumers of the services that expand their choices.
Certainly, we may not always see eye to eye with wireless carriers, or other businesses for that matter, that provide the services we depend on, but we must not let that prejudice color our impression of a natural evolution in wireless services as Americans use their smartphones for everything these days. And for the many Americans who use smartphones as their primary means to access the Web or those with more modest means, sponsored data offerings mean they can use more data on whatever they choose at lower prices.
These types of sponsored data plans only provide consumers with the flexibility of making the choices they want. It helps free them from data limitations and allows them to enjoy the content they love or explore new content channels with that newfound freedom. Sponsored data should be allowed to flourish without being mired in regulatory strife.
John Celock is the executive director of 21st Century Consumers, an advocacy organization focused on the interests of consumers using emerging technologies for goods and services.