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Definition

zero rating

Zero rating is the practice of not charging customers for data use on specific websites and services by Internet service providers (ISPs) and mobile service providers (MSPs).

Zero rating can be used by providers to create more tempting limited data plans for customers while favoring their own, affiliate or popular sites. Websites and services in this arrangement can pay the provider to be zero-rated and generally receive an influx of traffic from otherwise limited data customers.

Zero rating used to be a means for ISPs to favor content within their networks in locations where international data transfer costs were higher, but this has declined along with the fair use of zero rating. Currently, zero rating is presented as a solution to expensive basic internet subscriptions and data limits on mobile plans and used as a way to enable customers to visit unlimited sites that they might use frequently. Largely in developing countries, Facebook is one example of a zero rating website. Trials of Facebook Free Basics found that many users never ventured beyond the zero-rated site. Critics say this gives Facebook an arguably unfair advantage over smaller, less popular websites.

Zero rating is heavily criticized for several reasons:

  • It gives providers another means to create walled gardens, which favors their own and affiliate content.
  • It negatively affects user privacy and security as providers use deep packet inspection to determine if users are on zero-rated sites and disallow the use of encryption.
  • It is anti-competitive and anti-innovation, favoring established sites and services that can pay to have content zero-rated. Critics see it as only a temporary solution to a problem created by mobile providers arbitrary data limits.

The Federal Communication Commission (FCC) reviewed providers’ zero rating practices as possible violations of net neutrality regulations starting 2015 and ending in 2016 with the end of the Obama administration. Under the Trump administration, Ajit Pai, the new FCC commissioner, halted the investigation. As of this writing, zero rating is currently an accepted practice.

This was last updated in April 2017

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