Dutch Regulators Demand T-Mobile Stop Zero Rating, Remind Users That Free Data Isn't Really Free

We've talked a lot about how the FCC's refusal to outright ban "zero rating" here in the States opened the door to all manner of net neutrality violations and anti-competitive behavior. Thanks to this omission, we've now got gatekeepers like AT&T, Verizon and Comcast all exempting their streaming content from usage caps, while penalizing competing services. Consumers also now face T-Mobile and Sprint plans that throttle video, music and games by default -- unless users pony up an additional monthly fee. Some folks, like VC Fred Wilson, saw this coming a long way off.

And while the FCC only this month acknowledged this kind of behavior is anti-competitive and problematic, the "enforcement" (which is a pretty generous term for the weak-kneed letters the agency is sending out) comes too late as the FCC appears poised to be scheduled for a defunding and defanging under the incoming Trump administration.

In numerous countries (The Netherlands, Japan, Chile, Norway and India) regulators realized the threat of zero rating early on, and banned the practice to prevent this kind of distortion of the open market. In the Netherlands, T-Mobile this week was told it must stop zero rating its services immediately, or face fines of up to $52,000 per day. In its announcement, the Netherlands Authority for Consumers and Markets (ACM) makes it clear that when it comes to zero rating, the idea that consumers are getting something for free simply isn't true when it comes to zero rating:

"While the ACM noted European telecom regulators do allow some services to be allowed for free or at "favorable rates" under strict conditions, it said Dutch law does not allow price discrimination of any kind. "Dutch law is clear about zero-rating: it is not allowed," ACM board member Henk Don said in a statement. "That is why ACM is taking action " There is no such thing as free data: it causes other services to become more expensive."

Here in the States, you'll see plenty of people who still don't understand why zero rating is a problem, despite what should be obvious anti-competitive implications of letting AT&T, Comcast and Verizon give their own services an unfair market advantage. This failure to understand that usage caps are arbitrary, often unnecessary, and can be abused resulted in a lack of political pressure on the FCC to fully ensure net neutrality was protected. Instead, we get people laboring under the illusion that they're getting something for free, resulting in net neutrality being undermined -- ironically to thunderous public applause.

But again, with everything pointing to the FCC's net neutrality rules being dismantled entirely over the next six months (likely in the form of a new law that pretends to protect net neutrality while actually dismantling it), net neutrality advocates will find zero rating to be the least of their worries in the new year.

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