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

78 points by throwaway43 11 years ago | 63 comments

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 11 years ago |

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 11 years ago | |

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 11 years ago | | |

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.

drpgq 11 years ago | |

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 11 years ago | | |

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 11 years ago | | |

$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...

ForHackernews 11 years ago | | |

Canada happens to be a much wealthier country than India.

rjuyal 11 years ago | | |

$3/GB => 2G connection

jacquesm 11 years ago | |

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

Tarang 11 years ago | | |

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

danieltillett 11 years ago |

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?

wpietri 11 years ago |

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 11 years ago | |

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 11 years ago | | |

> 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 11 years ago | | |

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.

nathan_f77 11 years ago |

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 11 years ago |

> 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 11 years ago |

> 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 11 years ago | |

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 11 years ago | | |

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 11 years ago |

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 11 years ago | |

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 11 years ago | | |

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.

blfr 11 years ago |

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 11 years ago | |

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 11 years ago |

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 11 years ago |

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 11 years ago |

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 11 years ago | |

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 11 years ago | | |

@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 11 years ago |

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 11 years ago |

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 11 years ago |

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 11 years ago | |

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 11 years ago |

> 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 11 years ago |

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

thanatropism 11 years ago |

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.