The deal sounds great: Stream unlimited music without any data charges. The offer from T-Mobile includes popular services such as Spotify, iTunes, and Pandora. These apps will no longer count against your data plan, the company announced recently, no matter how much you stream across its 4G LTE network.
Or consider Sprint's new offer, via its Virgin Mobile pre-paid service: unlimited access to Facebook, Twitter, Instagram, or Pinterest for just $12 per month. Unlimited access to all four is $22 monthly, and $5 more also gets you unlimited music.
Yesterday, we described the Sprint deal as a Netflix-like unbundling of mobile data options, an à la carte alternative to standard all-access data plans that resemble nothing so much as cable's all-or-nothing bundles that force you to pay for channels you don't actually want. And there's a truth to this. But a prominent New York venture capitalist has a far more pessimistic take on the new trend toward unlimited data for certain apps. Fred Wilson, co-founder of Union Square Ventures, views such deals---which he calls "zero rating"---as a discriminatory salvo against mobile innovation.
"What all of this zero rating activity is setting up is a mobile internet that looks a lot more like cable TV than our wide open Internet," Wilson writes. "Soon, a startup will have to negotiate a zero rating plan before launching because mobile app customers will be trained to only use apps that are zero rated on their network."
In other words, he sees this as the opposite of Netflix. And indeed, it could present some serious obstacles to the next generation of mobile innovators.
Cable television works like this: Cable operators hatch deals with content producers---Disney, A&E, MTV---who then get their own channels on a proprietary platform controlled by the cable companies. Those operators act as gatekeepers: Consumers can only view the content the operators provide. It's a closed model versus the open model of the web. A public access station in Iowa can't decide on its own to upload its shows to the cable platform for someone in Dubai to access via their cable box. Cable doesn't have servers or browsers or URLs.
In Wilson's comparison, zero rating makes apps more like TV by effectively turning specific services into channels. Under the Sprint deal, you get the Facebook channel, the Twitter channel, and so on. To get the full-on open internet---which we used to simply call the internet---you must pay more. For Wilson, this amounts to a kind of front-end discrimination analogous to efforts to undermine net neutrality on the back-end. Some apps or services get preferential treatment, while others are left to wither through lack of equal access.
As Wilson explains, this makes zero rating an existential threat to what he sees as a period of more egalitarian access that allowed the internet economy to flourish. "There was a brief moment in the tech market from 1995 to now where anyone could simply attach a server to the internet and be in business," Wilson writes in response to a commenter. "That moment is coming to an end."
To be sure, venture capitalists may have their own selfish reasons for disliking zero-rating deals. Unlimited data can only help make popular apps more popular, which leaves less room for the startups in which venture capitalists have invested with in hopes that they will become big companies.
Wilson's own portfolio isn't too shabby. Union Square has backed Twitter, Tumblr, and Kickstarter, among others. But the startups looking to unseat those platforms could face a greater challenge gaining attention and users if they're not among the channels on the menu for mobile subscribers.
Consumers also may not take to zero-rating deals the way Wilson fears they will. Unlike cable---which has expanded over the past several decades along a trajectory of "more channels now than you used to be able to get"---the internet rose to popularity as an open platform, and that openness is what many users expect. To have your choices throttled to a few popular apps might feel too limiting, because it goes against the internet's basic premise.
Still, apps themselves already are a kind of closing-off of the internet. Gatekeepers like Apple and Google control access to their app stores, and apps are much less likely to link to one another the way web pages do. Facebook itself is a kind of closed version of the internet, a place where the online activities of a billion users are walled off from the online commons.
Just yesterday, Facebook-backed nonprofit Internet.org announced an app that provides free data mobile users in Zambia to access a limited number of services, including Google searches, Facebook messenger, and information on health, jobs, and women's rights. Any access is better than no access, but as WIRED's Mat Honan wrote: "An internet for poor people that in any way provides less access than the full-throated internet those of us reading this enjoy? That’s troubling. It’s another digital divide."
The same could be said for zero-rating deals that make data plans more affordable to users in the U.S. Perhaps more people feel they can afford smartphones, even if they can only afford access to the few apps that fall on the pre-approved list. But that's an impoverished vision compared to the democratizing ideal the internet at its best represents. It's important to consider this version of the digital divide from the point of view of app makers as well. The more they're cut off from potential users, the less likely they'll be to continue making apps. In that event, it's not only users with the most limited data plans who will suffer from lack of choice and opportunity. We all will.
