Ask HN: What do you guys think of zero rating?

[throwaway43]

The Indian mobile operator Airtel has proposed a new scheme called Airtel Zero here in India , which is supposedly an "open" platform that would allow any app maker to pay for the data so that customers can use the app without paying any data charges.

This is ofcourse , a blatant violation of net neutrality and has caused an uproar here in India . However they're trying to make this into a Rich vs poor thing by saying that banning zero rating is to deny poor people access.

The worse thing is that both Google and Facebook are in support of this scheme even though they support net neutrality in the US. Facebook was already in violation with their Internet.org scheme but I didn't expect this from Google.

If Airtel's experiment succeeds I think that this could be replicated across the world and destroy the very character of the internet.

The other problem is that zero rating is a bit of a trickier debate since it's not the customer who's paying.

We need to force the tech majors to take a stand against this. What can be done to force them ?

[arihant]

Okay, this has nothing to do with supporting the poor as the comments here are suggesting, and as Airtel is trying to paint it. Poor can avail month-long 1GB data at $3 in India. All major providers have a plan that makes Facebook, Whatzapp, Google, Twitter, Instagram free for $0.5 a month. We already have plans for the poor, this is not it.

This plan is the following - if you take Airtel Zero, you cannot access any other website. Period. That's right, no option to pay for other websites at all. Once you opt-in, your web is restricted. This is not like the plans for poor we already have, where you pay little or nothing for some websites, but can use regular plans to access rest of the web. With the new Airtel Zero, you waive off the rights to rest of the web as soon as you opt-in.

This is a net neutrality debate. We have plans for poor, this is not it.

[Grue3]

The difference is marginal. With $0.5/$3 plan, if the person is poor, they can't afford to go to expensive websites, so they're still locked to the cheap websites. It's still a "net neutrality" situation and the two plans have the same effect in practice. The only solution is to make the entire Internet free for everyone, which is, of course, not happening.

[arihant]

It's not a scheme for people struggling for food. Airtel Zero is only for companies offering Android and iPhone apps. If a person can afford a $120 phone at minimum, they can pay $3 a month. The "poor" is a marketing stunt here. In no way will this scheme make internet accessible for the next half billion in India.

[Someone1234]

> $120 phone at minimum

Uhh, no. I've paid $50 for this (non-contract):

http://www.gsmarena.com/zte_blade-3391.php

And that was new and in 2010. There are tons of amazing phones well below $70, in particular in "developing" markets (like India) where they get some exclusive low end phones that are a bargain for the spec.

If you go look on Airtel's website right now, go mobile offers, buy now, then uncheck the filter at the top and organise Low->High.

They have a 4.5" Android Quad Core, Lollipop phone for $87. If you can live with KitKat then they start at $31.95. If you want a "nice" Kitkat phone then $65.65 will buy you one.

So, yeah, $120 is nowhere ballpark near the minimum. The minimum in the literal sense is $10 and the minimum with Android is $28.81. And that's just buying directly from Airtel, new.

[drpgq]

Wow $3 for a GB of data? I'm paying more than three times as much in Canada and that's considered a good deal.

[rdsubhas]

You pay the rest in Time, basically. The $3 internet is so slow that you'll spend an eternity waiting for any page (other than google's homepage) to load. Its for the most basic of internet messaging and email. Youtube? Forget about it.

[notahacker]

$3 a GB is not cheap when it's 10% of your monthly income, which is the case for somewhere between a quarter and a half of Indian citizens on a dollar a day, depending on whose statistics you regard as the most representative and accurate. And that's a number which has fallen heavily in recent years.

That certainly puts things into perspective when talking about the downside to requiring people pay for bandwidth even if the app-owners want them to have it for free...

[arihant]

That quarter and a half billion cannot afford a smartphone yet. So mobile data scheme for apps is not a conversation about them. It is peanuts for people who can afford a smartphone.

[notahacker]

I wouldn't call $3 per gigabyte "peanuts" to someone buying the ~$30 extreme low-end Android phones, or indeed a much poorer person that possesses a battered second-hand feature phone with a Facebook app, which could at least theoretically be covered with this sort of program.

[arihant]

As I said before, we already have plans that give access to basic websites for $0.5 a month. Facebook-only access is like $0.1 a month. But with these plans, I can still access the rest of the web if I choose to, I just have to pay. $0.5 is what a poor person pays for lunch on job site, just to put the price in perspective.

I'm not arguing the free part, I'm arguing the fact that as soon as you opt-in for the new Zero plan, the regular web just cannot be had, even for price. The only web that will work on the phone is apps by Zero Rent providers. No websites, even if you wish to pay for them.

And this is bad for poor people to boot. What if they want e-governance features, no sir, wait in line and be treated poorly. What if they want to access healthcare information, no sir, wait in private hospitals and be treated poorly. But wait, get this, you can shop on Flipkart for no cost. Yay!

[ForHackernews]

Canada happens to be a much wealthier country than India.

[rjuyal]

$3/GB => 2G connection

[jacquesm]

One of the participants will sooner or later set up a proxy.

[Tarang]

The participants have to pay for the data instead of their clients. A proxy would effectively cost them.

[mobiplayer]

And it could be a good investment in exchange of proxying all your customer's traffic. That's probably the wet dream of some C level executives.

[danieltillett]

I am not sure why businesses paying the data charges of their customers is a violation of net neutrality? It might be anti-competitive and an abuse of market power, but unless the traffic was prioritized over other traffic how is this a violation of net neutrality?

[Perdition]

Large telecom companies ran a fairly effective campaign confusing people about what net neutrality was actually about.

I've heard all kinds of silly things like net neutrality wouldn't allow end-user set QOS. Or that it wouldn't allow ISPs to throttle people who exceed "acceptable use" limits.

As for the proposal in the OP I don't see the issue with it. Plenty of companies make arrangements (usually physical co-location of servers) with ISPs so that certain content doesn't count against users data caps.

That could get abusive if the ISP had a very low data cap but coincidentally services also owned by the ISP were off cap. But in most situations they are just giving you something extra, not taking away as ISPs were doing with targeted throttling.

[denzil_correa]

> I am not sure why businesses paying the data charges of their customers

This is a HUGE assumption. I would go out on a limb to say that that's what is happening. Consider this - an telecom firm named "UnfAir Tel" and e-commerce firm called "Glitch Kart" enter into a zero rating deal. Now, Glitch Kart is asked to pay UnfAir Tel some money to be called a Zero partner. Glitch Kart passes on these costs to the consumer (on every product) - minute costs like 20c per product. So consumers now pay to keep Glitch Kart accessible without Internet AND UnfAirTel for providing NO extra service.

> It might be anti-competitive and an abuse of market power, but unless the traffic was prioritized over other traffic how is this a violation of net neutrality?

I think the Norwegian Communications Authority explains this best.

> At first glance it may appear that all traffic is handled equally in this charging model, but the fact is that once you have used your quota, the traffic that is exempted will be allowed to continue, while all other traffic will be throttled or blocked. This is clearly a case of discrimination between different types of traffic.

http://eng.nkom.no/topical-issues/news/net-neutrality-and-ch...

[Xixi]

If I understand correctly, someone out of data on his/her plan will be able to access data from some businesses (who pay for the data), and not from other "normal" businesses.

So in a sense it's a form of binary prioritization: 0 or 1.

[danieltillett]

It isn't a violation of net neutrality if I don't pay my cable bills and so get cut off. I am not suggesting that it is a good idea for companies to abuse their market power, but it is not an abuse of net neutrality to pay someone else's bill.

[wpietri]

Having no service does not violate net neutrality. But net neutrality is violated when ISPs provide selective service based on who pays them the most. If packets are delivered differently based on business relationships, then it's not a neutral network.

What's being described here is much more akin to cable, where many channels pay for access to consumers.

[b0sk]

Well, from what I understand, they have a Whatsapp package for example where using whatsapp doesn't count towards the bandwidth cap. This is what opponents of NN want.

[shubhamjain]

One thing to be noted is, Airtel has always been pioneer of skewed business tactics to milk as much profit they can. I can't believe that even in this age, I can't have more than 1Mbps speed beyond their incredibly low FUP (Fair Usage policy).

I have seen charges of 2G data double in course of last two years or so. The picture, if Airtel goes through it, is very grim. They would force every major corporation to pay to allow access to their website / app for 'free' and the normal Internet packs would become very expensive to afford. I am sure most telcos would follow the same suit, once they get a nod.

[6d0debc071]

The concern, presumably, is that customers who receive their data for free with respect to a certain number of applications will have less of an incentive to place themselves in the position whereby they pay for the data and can access the Internet as a whole. It would, in effect, be a way of imposing asymmetrical data patterns through incentivising selective aspects of consumer behaviour.

[danieltillett]

Yes I can see it is anti-competitive and may not be in the general good, but I don't see how it a violation of net neutrality?

[6d0debc071]

If you think of the bandwidth/latency of not being connected to the Internet as zero, and think of the bandwidth/latency of being connected to the Internet as some nonzero value, then this is a difference of degree, and not of type, with any other net neutrality discussion we might have. Net neutrality would dictate that you cannot charge differently for different streams of data. Here, the cost to the user with respect to a certain set of streams would be zero in one case and some non-zero value in another case.

Now, one could argue that it is not a violation of net neutrality because the data is still being paid for – it is simply being paid for by another source. However, I find these arguments unconvincing. If the intention of net neutrality had simply been to ensure that data was paid for, then it would not matter if data was treated better or worse based upon some payment of a company. After all, the data would still be being paid for – it would simply be that some data was being paid to have faster service associated with it. In principle, that latter example would be no different to an end user of the ISP paying for a faster connection.

[wpietri]

I'm always disappointed when deregulation advocates don't seem to understand how markets work.

Free markets are great when you have a large number of relatively equal agents interacting freely. E.g., the classic farmer's market, or the stock trading pits of old. But the more you drift from those conditions, the less effective they are.

Here, with large, rich players paying for access to poor, mostly-uneducated individuals, it's a situation ripe for abuse. Especially because those individuals won't have access to the regular Internet to help them sort through what they're seeing.

I expect a lot of what they get will be from the sort of people who exploit the poor, the online equivalent of payday lenders and debt relief scam artists.

[bko]

I don't think having a large number of relatively equal agents interacting freely is ever realistic. There will always be those at an advantage and they should choose what he pursue based on their abilities. Kind of like very tall people with an athletic disposition should consider playing basketball. On the surface it is unfair to those under 6 feet tall but the NBA, being a market, is most concerned with attracting the talent that should be playing basketball rather than providing a level playing field to those who aspire to play.

In that sense, the market isn't about providing fairness to all players but for allocating talent and abilities.

In regards to exploiting the poor, I think that sort of mind-set often results in a dangerous kind paternalism. Protecting the poor is an excuse used for all sort of policies that often keep the poor down (cigarette taxes, drug policy, etc).

[wpietri]

> I don't think having a large number of relatively equal agents interacting freely is ever realistic.

By which logic, free-market approaches are also never realistic.

> On the surface it is unfair to those under 6 feet tall but the NBA, being a market [...]

Your example doesn't make much sense to me. The actual market involved is the labor market, which does indeed have a large number of relatively equal agents interacting freely. Known labor market failures occur when that's not the case. (E.g., company towns, employer collusion.) But when it does work well, it both provides a kind of fairness and also acts as a reasonably good way to allocate talents and abilities.

[lake99]

Not only that, it takes away an avenue for companies with large coffers from doing charity. For example, Google might want to make all of Khan Academy available via 'zero bandwidth' to Indian customers, by footing the bills themselves. Forcing customers to pay for the bandwidth (when someone else is willing to pay) goes against free-market principles.

[wpietri]

Free-market principles aren't a religious goal. They're tools we use to design markets. And we do that to achieve some real-world end, like better resource allocation, more stable social structures, or smarter, healthier citizens.

In this case, if we're writing net neutrality rule, it's easy enough to exempt charity cases like you describe.

[nathan_f77]

If I was developing an app in India, I would love to pay for my users data. This is a huge win for both companies and customers.

My opinion is that this should have nothing to do with the "net neutrality" debate. It's just shifting more costs onto the host, instead of the user. The host already pays for all the servers and outgoing bandwidth, why is it a problem if they also pay for the other side of the connection?

And if any website can opt-in to this arrangement, then there is nothing anti-competitive about it at all.

[Gusfoo_2]

> If Airtel's experiment succeeds I think that this could be replicated across the world and destroy the very character of the internet.

No - that is unlikely in the extreme. The UK has had zero-rated data and text messages for over 5 years and it has had no impact at all.

[jheriko]

> We need to force the tech majors to take a stand against this.

Why exactly?

The crux of this argument seems to be "having more money makes you better able to compete"

This falls out of free market capitalism. Its not going to go away without regulation, and it seems like doing so will disadvantage swathes of poor people for questionable benefits.

I do see the argument, but I think its quite far out of touch with reality, as a lot of these 'internet rights' and silicon valley engineers seem to be.

[hobs]

More like "Having more money means you can sandbag your competitors, since you own the verticals and give away your service to encourage usage of your walled garden until your competitors fade into nothingness."

In regards to the swathes of poor people, we can use a similar situation (though hyperbolic) to compare, and that is nestle giving out free formula to breastfeeding mothers in poor countries, and that couldnt hurt anyone because they were giving it away, right?

For example, IBFAN claim that Nestlé distributes free formula samples to hospitals and maternity wards; after leaving the hospital, the formula is no longer free, but because the supplementation has interfered with lactation, the family must continue to buy the formula.[1]

Regulation is definitely needed when a company does the equivalent of dumping or a predatory pricing scheme. Claiming that "poor people will be hurt" is missing the point that the robber baron isn't giving them free bread to feed them, they give them free bread to close down the other bakeries and then charge them for their daily bread in any way they want.

[1] http://en.wikipedia.org/wiki/Nestl%C3%A9_boycott#Baby_milk_i...

[jheriko]

It should be regulated. I'm just not sure why tech majors should take this up for us... its not in their interest, or in the interest of their customers.

Regardless as to motive, nothing will change to the people who benefit from this...

I'm not sure what competition it will be stifling either. We seem to be assuming that this is already a fairly balanced industry without gigantic monopolies - which is just untrue.

I can see the philosophical argument, I just can't be in favour of it when all we want at the core is to do is hold something back that has benefit.

[tempodox]

There is only one solution: If absolutely nobody has to pay for their mobile data usage, then there are no “poor” people in that respect.

If “Airtel Zero” were implemented as is, then “poor” people would only see the apps / contents that the people with the money are willing to give them. That degree of dependency borders on modern slavery. I would rather see mobile data made free for everyone.

[nathan_f77]

If you pay nothing for a service, then you are the product. Facebook and Google are already providing enormous value for free, if you have an internet connection. Now they want to provide it for free even if you don't pay for your internet connection. This arrangement changes nothing about the consumer relationship.

[wpietri]

Except that you no longer have access to information that they don't want you to see. For example, they won't be able to see you explaining that for Facebook and Google, users are the products.

[icebraining]

Doesn't the same happen in TV, radio, newspapers, etc? I understand why the Internet is different (and better, imho), but that doesn't mean we should ban other mediums. Just don't call this service Internet access.

[CoryG89]

I actually think this is one of the better ideas/solutions to this problem I have yet seen in this thread. If you don't label this service as access to "the internet" then there should be little concern as far as net neutrality goes. As long as it is made clear to customers that they are not getting the full internet, and instead are paying only for access to a handful of services then I dont think this should be considered a violation of net neutrality.

[wpietri]

I am flabbergasted that you're just going to define the problem away. But it certainly is easier. You can solve all net neutrality problems just by labeling things as other things.

For the rest of us, though, that doesn't work so well, because there are societal purposes to getting people access to the Internet. Democracy requires an informed citizenry, and there is no better tool for that than the Internet. Reducing multigenerational poverty similarly benefits from reducing the digital divide: https://en.wikipedia.org/wiki/Digital_divide

[blfr]

Wouldn't banning zero rating impact poor people the most?

It's probably why this is even an issue in the first place. In richer countries, companies simply expect their customers to have a decent connection.

[dragonwriter]

Zero rating is a thing in richer countries, too; in the US, for example, Sprint has made deals to zero-rate selected social media services; T-Mobile has made deals to zero-rate certain streaming audio services.

And, as in India, the advocates of the interests of the wealthy and corporations in the US like to promote zero rating as a thing that is good for the poor, with AEI promoting it as a tool to "narrow the digital divide". [0]

[0] http://www.techpolicydaily.com/internet/zero-rating-narrowin...

[denzil_correa]

The telcos and the government are trying to spin this as affordable Internet for the poor. Essentially, it does break net neutrality [0].

> At first glance it may appear that all traffic is handled equally in this charging model, but the fact is that once you have used your quota, the traffic that is exempted will be allowed to continue, while all other traffic will be throttled or blocked. This is clearly a case of discrimination between different types of traffic.

Now, if this is so altruistic and for benefit of all - I would make three "requests" from the telecoms.

1. Telcos should not prevent ANY app/website or any other service from being registered on the zero rating platform.

2. Telcos should post every detail of their financial deal with zero rating partners public. Essentially, I would like to know if a zero rating partner is paying for this affordability or are these costs passed on to the consumer in secret.

I am sure since this is for the good of everyone, telcos would have no problem agreeing to these two reasonable requests.

[0] http://eng.nkom.no/topical-issues/news/net-neutrality-and-ch...

[cxon]

The original post

http://www.airtel.in/about-bharti/media-centre/bharti-airtel...

and their clarification on the Airtel Zero

http://www.airtel.in/about-bharti/media-centre/bharti-airtel...

I feel Zero rating can be a boon or a death knell for small startups based on Airtel decide to charge per GB of data. I don't think it about restricting certain sites, its about giving the option to peoples to be able to access certain services without having to recharge. I am not sure if Airtel have a sinister design behind this at the moment.... Its more of wait and watch, keep your fingers crossed.

[vishnuharidas]

There are two points here.

1. Zero rating is good for customers. If Flipkart offers zero rating app, then other competitors like Amazon, Ebay, Snapdeal etc. too are forced to improve their service over Flipkart, or provide Zero Rating for them also. (But from a Business perspective, this can be bad).

2. Net Neutrality is a different thing. But here the telecom operators are confusing people with NN and ZR, tricking the users to believe that they are going to get internet for free once ZR is active. No, it's not like that. They are different things.

I believe that ZR for basic communication apps (like WhatsApp, Google Hangouts, Skype etc.) is an essential thing to do.

But still maintaining Net Neutrality is very very important.

[ge0rg]

1. Zero rating is good for customers.

This is probably more complicated. While large companies will have to follow suit and probably buy-in into the ZR deal of large telcos, startups and small buisnesess will essentially be cut off from (potential) customers.

For a small company, it will become a huge challenge to enter such markets - both logistically and financially, so in the end there will be no more Internet for the customers but only FacebookGoogleEbayNet...

[vishnuharidas]

@ge0rg You said it right. In this blossom of startups, the ZR will be too heavy for startups to handle. Example is, if Uber has a ZR on Vodafone worldwide, then no other cabs startups are going to raise. ZR is a sure death-shot for startups and SMEs.

[ensignavenger]

If the carriers are calling this scheme 'Internet' or using that word (or concept) to market this, then it is fraud. If they are instead calling it 'Airtel Zero' access, then they are fundamentally offering access to a different thing from the Internet, and thus it would not be a 'net' neutrality issue. If it looks like a duck and quacks like a duck, its a duck- if not, then it shouldn't be advertised as such :)

[Zigurd]

I just switched to a $50 ($40 for the third and subsequent lines) unlimited and supposedly uncapped mobile data plan. As long as such plans area available at reasonable prices, I don't think zero-rating some services on cheaper plans is very evil. As other commenters have pointed out, there are plans that restrict Web access, but that's not "zero rating." That's a walled garden.

[lucaspiller]

Does anyone know how Facebook 0 worked? That sounds like it was pretty much the same thing:

https://www.facebook.com/notes/facebook/fast-and-free-facebo...

[nicpottier]

Facebook 0, aka internet.org still exists and is growing in many developing countries.

Basically Facebook goes into local carriers and makes an agreement to the effect that users can reach 0.facebook.com for free on their network. They've now started adding other sites as well to that 'free tier'.

I imagine Facebook is paying something to the carriers for this, though at the very start it may just be seen as a competitive advantage by the carrier so perhaps not.

I actually find this practice super disturbing and find the naming of it as 'internet.org' even more so. The Internet is great because of the very opposite of this type system.

Say in an alternate reality Friendster did this a decade ago, would Facebook even exist if people had to pay to access it? Is that a state of the world we are comfortable with?

I very much understand the arguments towards the utility of the internet (even Facebook) to the poor and marginalized, but this isn't the right way to do it.

[Kiro]

> by saying that banning zero rating is to deny poor people access.

I may be naive but I kind of agree. I also think zero rating sounds great in theory. The alternative is that people cannot access at all? Can you post some arguments of why it is bad? Net neutrality doesn't tell me anything. Why would I as a consumer care about that?

[vnaybrdwj]

https://www.linkedin.com/pulse/zero-rated-data-net-neutralit...

[thanatropism]

They have or had for a while this for Whatsapp in Brazil. I don't think it spread much. The market sometimes does things even market theory assumes it can't.