Tuesday, 03 February 2015 04:28

[Forum] How Can We Keep the Net Neutral and Still Have Sponsored Data?

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[Forum] How Can We Keep the Net Neutral and Still Have Sponsored Data? Image Credit: PCC Mobile Broadband

Net Neutrality and sponsored data have been at loggerheads for some time now. Net Neutrality aims to ensure that when it comes to using the internet, no online content is prioritized over another. Blocking an IP, slowing down connection to a site or simply charging a higher connection rate (either on a fixed or mobile network) are examples of net neutrality being compromised.

Similarly, sponsored data also has its proposition. It enables businesses or governments to sponsor internet access for socio-economic reasons, for example, providing connectivity for communities who can not afford mobile internet charges such as those in very remote places, accessing healthcare information and virtual clinics provided by various healthcare sites.

More importantly, sponsored data enables mobile data to act as a 'currency', used to buy and sell access to internet content. For example, someone who wants to follow a 2 hour tutorial on a popular online learning site can participate in a survey by a retailer. In the place of a participation token (for example - a key-chain or a pen), the retailer now 'pays' the participant in megabytes of data, say 50MB. This allows the user to use the 50MB 'earned' data to 'buy' access to the tutorial site. In this case, data becomes a medium of transaction, satisfying the needs of both transacting parties.

Sponsored data however, has become infamous from its use by digital content providers who subsidize the data charges incurred by their subscribers in consuming their online content. The sponsorship will result in the overall consumption costs of their own content becoming cheaper than another comparable content in the market, breaking the rules of net neutrality.

To analyse further, the issue posed by sponsored content stems from the fact that mobile data is provided on a usage-based pricing. Had it been cable TV, satellite or even fixed internet, which charge users a flat monthly fee regardless of the quantity of content they access and consume, the issue of sponsored 'connection' would not have risen as sponsors would have to sponsor the whole channel/package. IP-content that can be priced on per-content basis and by the bandwidth consumed opens up the opportunity for data sponsors to pay for exactly the content or the access time they wish to grant to their target users.

At the same time, for anyone who subscribes to any online content service, specifically OTT video or OTT TV services, it makes no sense to pay for the content subscription and still have to worry about the connection charges they will incur on the content they consume.

Given all these, what will be the industry's response to these situations? Will there be certain use cases where sponsored data can go hand in hand with net neutrality? Can market forces provide the answer?