Net Neutrality Rules Could Mean End to Services Like Wikipedia Zero, Says Former Wikipedia Executive

Zero rating, one of the more complicated issues before the FCC as it developed the order, remains controversial. Zero rating offers limited Internet access at lower rates (see 1502250064). Some net neutrality advocates view it as a fundamental threat to an open Internet since it provides favored treatment for some apps over others.

The FCC doesn’t prohibit zero rating, per se, in its February order, Godwin said. But the order does say the FCC retains the authority to determine, on a case-by-case basis, whether any zero-rated service is deployed anti-competitively. The order hasn't been published in the Federal Register.

“While it's good to see the FCC remain agnostically ‘retail’ on an issue where it might have chosen to regulate ‘wholesale,’ it's discomfiting to see the Commission apply the terms ‘sponsored data’ and ‘zero-rated’ interchangeably,” Godwin said. “The former suggests that money is changing hands between the carrier and the service, so that if you're lucky enough to have a special ‘zero-rated’ relationship with a provider, you get to lock out competitors. There's plenty of reason to think that muddying the waters this way does no one any good -- not even net neutrality's advocates.”

By encouraging more use of Wikipedia without added costs to users, Wikipedia Zero increases demand on mobile infrastructure, Godwin said. “Providers will have to expand capacity to handle the increased demand, and they can't do this by demanding fees from Wikipedia, which the Wikimedia Foundation can't and won't pay in any case,” he said. “In the long run, increased demand and increased capacity, together with the free informational resources that Wikipedia and its sibling projects provide, will promote increased Internet access in the developing world.” Godwin called this a net positive by any measure. “For true believers in the strongest forms of net neutrality, the necessary build-out in capacity driven by Wikipedia Zero and other similar free resources could be precisely what, in the long term, makes a neutral net more tenable in the developing world,” he said.

Michael Calabrese, director of the New America Foundation’s Wireless Future Project, disagreed. “If money changes hands, zero rating is back-door paid prioritization,” Calabrese told us. “If edge providers don’t pay to be zero-rated, it means the ISPs are picking winners and losers among edge providers. Small, start-up and diverse music, video and social media providers are the inevitable losers, since it only boosts the ISPs marketing to zero-rate some popular service.”

In the end, consumers aren't helped because ISPs, especially wireless carriers, have more of an incentive to impose “stingy” data caps, Calabrese said. “Like paid prioritization, zero rating creates incentives for keeping bandwidth scarce,” he said. “Consumers and innovation would benefit most if ISPs just stick to selling buckets of data, rather than distorting the market for edge content and applications.”

Free Press Policy Director Matt Wood said that group hasn't taken a strong stance against zero-rated offerings, but questioned the logic of Godwin’s arguments. If the argument is that sponsored data and zero rating are different, Godwin is right, Wood said. “That's why the FCC has the ability and the duty first to consider the facts of a specific practice and then to determine whether that practice is unreasonably discriminatory to Internet users,” he said.

But Wood took issue with arguments that services like Wikipedia Zero lead to network deployment. “If Wikimedia can't and won't pay for this kind of zero rating, as Godwin claims, then broadband providers are left to recover the costs of network buildout from their actual end-users,” he said. “That's what carriers do already today, of course, and they make a fantastic profit doing it. Suggestions that they can't do it without charging senders are wrong, and claims that charging senders would lead to savings for those end-users are somewhere between highly speculative and flat-out wrong.” The argument that zero-rating Wikipedia is a positive because it would in turn spur network demand “is just a cramped version of the typical virtuous cycle investment arguments,” he said. “Unlimited use of any and every site and app would increase demand still more than just allowing unlimited use of a chosen handful. This all begs the same question we always ask about the rationale for caps in the first place.”

Daniel Lyons, associate professor at Boston College Law School, also released a paper Wednesday warning of harms to consumers from zero-rating prohibitions. Lyons said something strange happened on the road to net neutrality rules -- policymakers shifted their focus from the interest of consumers to protecting edge providers, including Facebook, Netflix and the theoretical “next Facebook.”

International operators are creating zero-rated offerings that have implications for the U.S., Lyons said, citing Turkey’s Turkcell. The carrier sells a plan that allows customers to add 500 megabytes of Facebook and Twitter access, plus 20 megabytes of general data, to a basic voice plan for the equivalent of $2.67 per month, he said. Turkcell says the free Facebook offer helped spark an 820 percent increase in mobile Facebook use in 2010 and Twitter Zero led to a 340 percent increase in mobile Twitter use, Lyons wrote. He said “30,000 consumers signed up for the Turkcell Facebook add-on in the first week alone, and 600,000 customers in the first four months.” “It is difficult to determine how many of these customers would have purchased a higher-priced full-Internet plan in the absence of the Facebook-only alternative, and which would have foregone access completely.”

One lesson is that diversification in the products offered to consumers can “help narrow the digital divide between connected and non-connected consumers,” Lyons said. “While there are numerous reasons why some consumers lack Internet access, affordability of Internet access plans is one key variable.”

As the FCC fleshes out how its rules will be applied, it needs to be careful not to “foreclose” broadband offerings that can be pro-consumer, Lyons said in an interview. He said he wishes he could buy a low-price plan for his teenage daughter that offered access to Instagram, plus voice and text. That would be “a lot better for me than adding her to my Verizon plan,” he said. “Unfortunately, it’s not clear to me that that’s the type of innovation that survives the net neutrality rule. Allowing access to some social media sites and not other offerings could be considered blocking Internet content.”