For years now, ACT | The App Association has urged Congress to adopt a set of requirements that establishes net neutrality principles in statute. The debate came back to a head in 2017 as the Federal Communications Commission (FCC) undid its classification of internet services as Title II, thus removing the FCC’s own ability to develop net neutrality rules. California stepped into the void, adopting its own net neutrality law, going slightly further than the Obama Administration’s federal rules in that it bars “zero-rating” or sponsored data plans. Those plans allow a wireless carrier to make agreements with certain services like Netflix so that subscribers’ use of those services (watching Netflix, for example) do not count toward their monthly bill. Carriers are moving away from capped plans and trying to guide more subscribers to unlimited plans, but for those still in the capped model, sponsored data is nice to have, for consumers and developers. For that reason, we raised some concerns with the idea of doing away with zero-rating arrangements.
It may seem like App Association members are not big enough to make deals with carriers for sponsored data but banning the practice could hurt them directly or indirectly. For example, the federal Department of Veterans Affairs (VA) recently asked California officials if California’s net neutrality law blocks the partnerships the VA developed with wireless carriers not to charge veterans for data when using VA telehealth services. The telehealth service / app in question, VA Video Connect, is similar to offerings of several App Association members and members of our Connected Health Initiative. The option to provide zero-rating on telehealth services for certain populations, including veterans, is an important one to ensure the service is accessible regardless of income. Similarly, consumers who can binge their favorite shows without using up their data allowances are more—not less—likely to download new apps or try out new services on their smart devices. Some subscription streaming video services that compete with Netflix may object to the favored treatment for Netflix and their subscribers, but for the most part, our member companies benefit from people having more data to burn.
Ultimately, the state-by-state approach to regulating internet services—although well-intentioned—could do more harm than good, especially when it calls into question pro-consumer practices like zero-rating. That’s why we asked Congress to enact a law that enshrines the main net neutrality principles: 1) a prohibition on blocking; 2) a prohibition on throttling; 3) a prohibition on unreasonable discrimination of lawful content; and 4) transparency to help consumers understand their options in broadband services. It will be difficult for Congress to agree on the details, but worth the trouble from the perspective of our members to adequately protect them and their clients and consumers from fluctuating approaches in the states and the net neutrality seesaw at the FCC.