Phoenix Center Makes Economic Case for Zero Rating
A Phoenix Center study made an economic case for why carriers should have available zero-rated service offerings as a tool for reaching some customers. It said the “price-quality variations” of zero-rated programs “are economically sensible, if not necessary, to address…
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the key barriers to adoption without attenuating investment incentives.” Zero-rated programs can address one of the key reasons people don’t subscribe to broadband, the report said. “On the supply side, the lack of access to broadband is mostly a financial issue driven by the high infrastructure costs of network deployment relative to the revenue potential,” the center argued. “On the demand side, research consistently points to the related concepts of awareness and digital literacy as well as affordability.” It cited Facebook’s Free Basics program, which helps people in 45 countries get online for free. “Nonetheless, questions are being asked about the propriety of the basic connectivity offered by such programs,” Phoenix Center said. FCC Chairman Tom Wheeler sent letters to AT&T, Comcast and T-Mobile in December asking about their zero-rated offerings (see 1512170030); a letter to Verizon followed in January after it announced a similar product (see 1601280056).