Debate rumbles as FCC threatens action
It is a rare conversation in Black America. Phrases like “sponsored data” and “zero rated programs” and “free data” are simply not bread and butter issues like the more familiar “quality education”, “criminal justice”, and “health care”, among others.
Yet, synonymous with the rise of mobile phone and data use among African-Americans and other people of color, a quiet controversy is rumbling behind the scenes that does in fact involve a bread and butter issue – economic justice. The question is whether some of the largest and most recognized names in tech and telecom, such as Facebook, AT&T, Verizon, and T-Mobile, should be embracing new business models that give consumers additional data at no additional charge.
The Federal Communications Commission (FCC) says it is still collecting information on these programs, but the FCC could engage and make it harder for companies to give consumers free data. The issues are complex. But the growing importance of data access to people of color is undeniable.
According to the Pew Research Center, people of color and low-income communities are more likely to be “smartphone dependent.” But, their smartphones are used for much more than social media, general web browsing, texting and emailing. They’re also used to take online classes, submit job applications, and get health information.
With this increased usage, the need for free data is clear to advocates. The sponsored data and zero rated programs are the modern-day equivalent of toll-free calling. In a nutshell, they keep certain data use from counting toward a customer’s bill by omitting it from the customer’s data cap. In other words, there are no excess usage charges, similar to an 800 number.
On the face of it, clearly African-Americans – the most unemployed among racial groups and at the rock bottom of the socio-economic strata – need the price breaks. But, as the market evolves and creative partnerships are formed, some tech and consumer groups in Washington – are emphatically against sponsored data and zero rated programs. In a recent letter they argued that sponsored data programs harm competition by enabling Internet service providers to “pick winners and losers online.”
John Burnett, a New York-based financial industry professional, recently wrote for The Street, “it is more than just a little ironic that these consumer groups are standing in the way of a positive outcome for consumers: granting them access to more data without squeezing household budgets.”
Free data programs are made possible by a third party company like an app provider, a website, or a content company partnering with a mobile carrier like T-Mobile to sponsor or pay for the consumers’ data usage. For example, because video is the top driver of mobile data use, Binge On, along with Verizon’s FreeBee, and AT&T’s Sponsored Data, and other similar offerings are prime for those who want more choices and more benefits.
Free data programs offer consumers more mobile Internet usage with no additional cost – a benefit that enhances economic justice and can help close the digital divide. Therefore, the consumer appeal of free data – especially for lower income communities – are rising, and are compelling.
The loudest praises are apparently coming from consumers themselves. T-Mobile has said its program is getting overwhelming support as it got a high mark from 93 percent of respondents in a customer survey.
Burnett concludes, “It’s likely that consumers, particularly those in low-income communities, will embrace sponsored data. And regulators shouldn’t discourage that, no matter how much pressure tech elites place on them to bar the service.”