What is zero-rating?

What is zero-rating?

‘Zero-rating’ is when an ISP applies a price of zero to the data traffic associated with a particular application or class of applications (and the data does not count towards any data cap in place on the internet access service). For example, if an internet access service does not charge a user for the data used to access a specific music streaming application or all music streaming applications, then the ISPs is zero-rating those applications. In implementing the Regulation, the BEREC Guidelines consider zero-rating as one of the commercial practices mentioned in Article 3(2) of the Regulation.

Is zero-rating allowed under the Regulation?

It depends. There are different types of zero-rating practices, some of which are more problematic than others. BEREC’s Guidelines look at different examples and provide guidance on the extent to which they could be considered permissible under the Regulation.

The BEREC guidelines explain that some practices are clearly prohibited – those where all applications are blocked or slowed down once the data cap is reached except for the zero-rated application(s). Others are less clear-cut and will be need to be assessed by NRAs against a number of criteria set out in the Guidelines.

How will regulators assess whether cases of zero-rating are permitted?

Criteria that NRAs should take into account when assessing zero-rating and other commercial practices include:

  • whether the practices circumvent the general aims of the Regulation (to “safeguard equal and non-discriminatory treatment of traffic” and to “guarantee the continued functioning of the internet ecosystem as an engine of innovation”);
  • the market positions of the ISPs and CAPs involved;
  • any effects on end-user rights of consumer and business end-users, e.g. reductions in the range of applications available, incentives for end-users to use certain applications, or whether there is a material reduction in end-user choice;
  • any effects on end-user rights of Content and Application Providers (CAP), e.g. whether there is an effect on the range of content and applications which CAPs can provide, or whether they are materially discouraged from entering the market;
  • the scale of the practice (e.g. the number of end-users subscribing to such an offer) and the extent to which end-users have access to alternative offers and / or other ISPs.