When Net Neutrality Policy Comes Down, FCC Likely to Permit Sponsored Data Programs

“When the new rules for net neutrality arrive, rest assured the big wireless carriers will be unhappy,” notes Mark Bergen in a recent commentary at AdAge. “But they can take solace in at least one victory. “Zero-rating” programs, in which operators turn their pipes into advertising and promotional channels, will likely remain intact in the …   Read More

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When Net Neutrality Policy Comes Down, FCC Likely to Permit Sponsored Data Programs“When the new rules for net neutrality arrive, rest assured the big wireless carriers will be unhappy,” notes Mark Bergen in a recent commentary at AdAge. “But they can take solace in at least one victory. “Zero-rating” programs, in which operators turn their pipes into advertising and promotional channels, will likely remain intact in the broadband regulation — and might even flourish.”

After a lot of ups and downs — and massive public outcry — the Federal Communications Commission’s Tom Wheeler recently recapped the agency’s current thinking on internet rules going forward.

While cable companies wouldn’t get what they purportedly crave — a means to create internet “toll booths” where some businesses pay big to expedite their messages — “zero rating” may survive. That’s the environment in which carriers, often in partnership with marketers, “subsidize the data used by consumers for particular mobile apps or websites.”

“In January 2014, AT&T launched Sponsored Data, a service that allows advertisers to sponsor mobile data for its subscribers,” according to Bergen. “All other major national carriers are considering similar products, according to multiple executives familiar with the industry. The two smaller players, T-Mobile and Sprint, have deployed zero-rating in recent phone plan promotions.”

It’s kind of like paying for advertising: zero-rating ensures more customers view their marketing and engage with their content.

More analysis lies ahead, but industry observers believe the practice will be allowed.

“Gigi Sohn, special counsel of external affairs at the FCC, said the agency would review the practice on a “case by case basis,” noted Bergen. “She described a “safety net” approach, assessing whether internet service providers are hindering consumer choice with their behavior.”

In the ongoing battle over a free and neutral internet, one thing is clear: someone will pay for marketing privileges. For the moment, it looks like the FCC is coming down on the side of the consumer.

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