Why Free Can Be a Problem on the Internet

The Editorial Board of the New York Times: “T-Mobile, the wireless company, said last week that it would let customers watch as many movies as they wanted on services like Netflix and HBO as well as all other kinds of video, without having it count against their monthly data plans. Given the growing popularity of streaming video, its plan, called Binge On, should appeal to many consumers. But there are real concerns about whether such promotions could give telecommunications companies the ability to influence what services people use on the Internet, benefiting some businesses and hurting others.

Earlier this year, the Federal Communications Commission adopted rules to make sure that companies like T-Mobile, Verizon and Comcast did not seek to push users toward some types of Internet services or content — like video — and not others.

The rules, which telecom companies are trying to overturn in court, forbid phone and cable companies to accept money from Internet businesses like Amazon to deliver their videos to customers ahead of data from other companies. The F.C.C. wanted to make sure phone and cable companies could not limit consumer choice in terms of content by making it harder for newer businesses to compete with established Internet companies like Google.

The rules, however, do not explicitly prevent telecom companies from coming up with offers like the one T-Mobile announced. The industry calls them “zero rating” plans, because companies that use them treat, or rate, some content as free. Everybody likes free stuff, but the problem with such plans is that they allow phone and cable companies to steer their users to certain types of content. As a result, customers are less likely to visit websites that are not part of the free package.

The commission’s chairman, Tom Wheeler, has said he will evaluate these plans individually to determine whether they violate the commission’s rules. The F.C.C. declined to take action against an older T-Mobile offer that allows customers to stream music from services like Spotify and Pandora without having it count against their data plans.

Zero-rating plans have stirred opposition around the world. In India, public interest groups complained that Airtel Zero, a plan announced in April by a wireless company there, violated the principle of network neutrality because it would charge businesses to have their websites available to Airtel’s customers at no cost to the customers. The company described the service as the Internet-age equivalent of a toll-free number.

Advocacy groups have also criticized Facebook, which has been encouraging wireless companies in developing countries to offer certain websites, including a stripped-down version of Facebook, free to their customers through a program called Free Basics. Facebook says the program gives poor people who might not be willing or able to pay for a data plan access to information.

Telecom companies in 19 countries, including India, Ghana, Colombia and Kenya, are offering Free Basics in the hope that some of the users will eventually pay for more complete Internet access. Facebook says neither it nor the telecom companies charge fees to the websites included in the plan. But critics say Facebook and the wireless companies are unfairly steering new Internet users to a few favored sites.

T-Mobile has said that its zero-rating plan is good for consumers and for Internet businesses because it does not charge companies to be part of its free service. When the plan goes into effect on Sunday, 24 services will be part of Binge On, and the company says any website or mobile app that offers streaming video can opt into its program with no charge. And T-Mobile users can turn off Binge On at any time.

Binge On is certainly better than plans in which websites pay telecom companies to be included. But it is not yet clear whether these free plans will inappropriately distort how consumers use the Internet.”

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