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The broken analogy - toll free vs zero rating

Why it's wrong to compare a zero rating platform with a toll free numbers

Apr 12, 2015

A network switch
A network switch (credit Pixabay @pexels)

This is a cross-post from my original article on Medium

During the whole debate about Net Neutrality, we’ve heard, multiple times, the analogy between toll free numbers and zero rating — that if the former is legal, why not the latter? This analogy is fundamentally flawed, and at the core of this flaw is the assumption that the two industries are identical. They’re not, and here’s why:

  1. Lock-in: The Internet is about always-on data consumption, the presence of which is very pervasive into our lives. How many times in a day do we use toll free calls? By corollary, the lock-in effect of services that are on zero rated platforms is orders of magnitude stronger than lock-in effect of toll free numbers. As an example, see this study that found millions of Facebook users don’t even know they’re on Internet

  2. Potential for abuse: Data business for telecoms as a percentage of total revenue is significantly more than toll free business. Thus, the incentive for telecoms to abuse their privileged position is huge. As every service, including voice, moves online, there will be every strategic reason for telecoms to decrease their risk of becoming a dumb pipe, and the only way they can do that is by taking up a more controlling position in the Internet

  3. Conflict of interest: Telecoms have rarely ventured into businesses that compete with their toll free clients’ businesses. But the Internet world is different. Its a pure online play, and falls in the same ecosystem where telecoms are playing. Reliance Jio launching messaging & calling app and Airtel’s Wynk — how is that not a conflict of interest? Telecoms, of course, have every right to get into different services, but not when controlling the zero rating platforms simultaneously.

  4. Criticality (Credit @nitinmisra): Unlike, Internet access, toll free numbers are not fundamental to consumption of a product/service — they’re ancillary.