Earlier this month, dozens of public interest groups sent a letter to the Federal Communications Commission (FCC) demanding regulators take action regarding sponsored data and zero-rated programs – calling them a threat to the Open Internet. The letter claims – among other things – that these programs limit consumer choice and stand to disproportionally harm low income communities.
The notion that the FCC should ban them or impose onerous rules in order to benefit consumers, particularly low-income and minority consumers, is misguided. These programs actually give consumers more choices for services and how they use their data without charging them more. Given the smartphone dependency of low-income and minority consumers, it seems logical that they would benefit from sponsored data and zero-rated programs.
According to PEW Research, low-income consumers are “especially likely” to be smartphone dependent. Further, 12 percent of African Americans and 13 percent of Latinos are smartphone dependent too, compared with only 4 percent of whites. This means three times as many minority users’ primary—or potentially only—access point to the Internet is their smartphone.
While they’re using their smartphones to stream video, check social media, or text, they’re also using their smartphones to seek employment. Again, according to PEW, mobile consumers coming from households earning less than $30,000 annually are twice as likely to use their phone to access job opportunities and more than four times as likely to use their phone to actually submit a job application as compared to those from some higher earning households.
Sponsored data and zero-rated programs will not only benefit low-income and minority consumers, they will benefit mobile consumers more broadly. Take millennials as an example. This generation seemingly uses their smartphones for everything. In fact, 85 percent of millennials own a smartphone. It’s their entertainment, GPS, library, and lifeline to social media. It’s also their resource to job postings, information, and new opportunities. PEW data shows that over 30 percent of millennial smart phone owners used their phone to submit a job or internship application.
Despite the obvious benefits of these programs, net neutrality purists and special interest groups in Washington – such as those who sent a letter to the FCC this week – seem to think these programs “violate the spirit” of the FCC’s Net Neutrality rules – which ironically were in large part adopted to protect consumers, increase access, and promote competition. Regardless of the pressure being put on regulators by these tech elites and interest groups, the benefits of sponsored data and zero-rated programs are evident.
As a country, we should be doing all we can to help bring more people online and keep access affordable – which is why I believe these programs should be embraced by regulators and consumers alike. Options like T-Mobile’s Binge On, Verizon’s Go90, and AT&T’s Sponsored Data benefit consumers by allowing them to consume content from participating streaming companies, apps, and others without it counting toward their monthly data plan, leaving consumers with extra data each month to use as they see fit.
This concept isn’t new. Publishers sell advertising space to defray and reduce the cost to consumers buying newspapers, periodicals, and magazines. In fact, the principle behind the sponsored data services – two-sided markets – is common across many industries and truly benefits consumers.
There is not a one-size-fits-all solution for ensuring every American has access to broadband. Instead, it will take multiple programs, policies and new technologies to bridge the current gap. Closing the door on innovative services like sponsored data and zero-rated programs could widen the gap, leaving consumers with less options for accessing mobile content.
Maram Abdelhamid is the President and Founder of Liberty and Access for All, a nonpartisan/transpartisan nonprofit in Washington DC that is dedicated to training, mentoring and developing the next generation of leaders from the traditionally underrepresented and communities of color