FIVE QUESTIONS ON ZERO RATING

By Bronwyn Howell and Roslyn Layton

In the last issue of Intermedia, Augusto Preta and Peng Peng reviewed the economic arguments for and against zero rating, or free data, noting that the practice of not counting some internet services in the mobile subscription could have some benefits, including lowering costs for consumers, increasing adoption of mobile broadband, allowing mobile operators to differentiate their services, and enhancing competition both among network and content providers. Despite this evidence, zero rating remains controversial and is subject to scrutiny under net neutrality rules. While some claim zero rating has nothing to do with net neutrality because there is no traffic management involved, others claim that it violates the net neutrality principle of treating all data the same.
The controversy is not likely to end soon. The courts of Netherlands and Slovenia, two countries with net neutrality laws since 2012, have ruled differently on the issue. While one zero rating offer may have been struck down in the Dutch court, four mobile operators successfully sued the Slovenian telecoms regulator Akos. The Slovenian court upheld the legality of a variety of zero-rated offers, saying that the country’s net neutrality law could not be interpreted to mean the prohibition of zero rating. The court cited the Slovenian Competition Authority’s pronouncement on zero rating, noting its competition-enhancing features and concluding that any determination about the practice should be made on the actual effects, rather than a presumption of harm.