Report shows that carriers offering data-free content raise prices the next year
For those of you who don't remember, zero-rated programs allow a consumer to use certain services and apps without their use counting against the subscriber's data cap. For example, T-Mobile's Music Freedom program, which launched in 2014, allows subscribers to stream music from content providers like Pandora, iHeartRadio, and SpotifyMusic on an unlimited basis. In other words, no matter how long a subscriber listens to one of the included streaming music services, not one 1KB of data is counted against the subscriber's monthly data cap.
When net neutrality was approved by the FCC in 2015, zero-rated programs were prohibited. Under the rules, all internet streams must be treated the same. Now that the current Trump-era FCC (led by commissioner Ajit Pai) has voted out net neutrality, carriers can restart zero-rated programs. However, a new report published by Epicenter.works (via The Verge) reveals that consumers that live in countries allowing zero-rated programs end up paying more for their wireless service down the road. On the other hand, European countries that prohibit the zero-rating of apps and services had as much as a 10% decline in the cost of wireless data after one year.
More specifically, the report from Epicenter.works shows that in European markets without zero-rating in 2014 and 2015, wireless pricing declined 8% the next year. Pricing in European markets with zero-rated offers in 2014 but not 2015 saw wireless data prices decline 10% the next year. But European markets with zero-rating offers in both 2014 and 2015 saw prices rise 2% the next year (see image on top of the article).
Of course, with the return of unlimited data plans, zero-rated programs are no longer as attractive as they once were. And while the current absence of net neutrality rules allow wireless providers to bring back zero-rated programs, the report from Epicenter.works indicates that if these programs do return, wireless subscribers will be paying more for their wireless service not too long afterwards.
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