When Net Neutrality Blocks End Users From Freely Learning Online
Oak National Academy in United Kingdom launched in the early weeks of the pandemic in response to sudden school closures. Millions of children were at home, and most schools were unprepared for the months of remote learning to come. Oak assembled a group of teachers to record lessons for students aged 4-16 and uploaded them to Oak’s platform. With government assistance, more teachers were recruited to develop an entire English national curriculum – 10,000 objects in all. It became the national online classroom, free and easy for all to use.
At the start, Oak did not realize the challenges of connectivity, either with end users and because of regulation. One in five Oak users did not have a laptop or tablet. Rather they used a mobile phone, frequently a parent’s. These were often the children from the most disadvantaged families which use pre-paid, pay-as-you-go accounts to limit expense and data use.
Figures from the UK telecom regulator Ofcom show that as almost 1 million UK children only access the internet through 3G or 4G mobile wireless connections, and half a million children have no access at all. Another Ofcom survey shows that 1 in 5 families, 4.7million households, struggle financially. Even though the UK has some of the lowest mobile broadband prices in the world, some consumers cut expenditures on food and clothing to pay for connectivity. A typical Oak lesson can consume 250MB of data, and a student accessing 4 lessons a day could use some 5GB of data a week.
In autumn 2020, Oak initiated a dialogue with broadband providers to zero-rate its educational content. Oak provided 11 UK broadband providers with the content through a single domain. At the time Ofcom waived the UK’s net neutrality rules to allow this to proceed, but only on a temporary emergency pandemic response.
In October 2022, Ofcom proposed to make zero rated programs like Oak’s legal from the get-go. Matt Hood, CEO of Oak National Academy, said, “We are delighted Ofcom has proposed relaxing the rules. Zero-rating played a vital role in ensuring children from disadvantaged homes were able to keep learning during the pandemic and beyond without racking up big data charges. We believe Ofcom could go further to develop a universal and permanent solution that makes sure all young people can access basic educational services online for free. That could be in the form of all core educational services automatically being zero-rated. But a major push is also required on social tariffs so all families on benefits and therefore eligible are made aware of the offer and can make use of it.”
Why does Europe ban zero rated online education?
Ironically the net neutrality rules which were proffered to protect end user rights have done the opposite. Even though European Parliament law does not contain the terms “net neutrality” or “zero rating”, a series of European Court of Justice rulings have made the practice illegal. It’s a far cry from the original conception of “zero rating” which came from European Economic Community in the 1950s. When value added tax (VAT) was imposed on goods, certain “essential” items like food, medicines, books, and wheelchairs were “zero rated” and hence not taxed. The court rulings effectively end the freedom of end users and content providers like Oak to contract with broadband providers for free access to essential programs. The UK, no longer part of the EU, could hobble its solution together because it has its own law.
The European Union and India are the outliers on banning a practice which is enjoyed by most of the world’s mobile users. It’s estimated that as many as 1 billion people have come online for the first time because of free data programs, notably partnerships between mobile operators and Meta (formerly Facebook). Indeed using innovative partnerships to close the digital divide for the remaining 3 billion people still offline is the life’s work of Doreen Bogdan Martin, now the Chair and first female leader of the International Telecommunications Union.
The US took a decidedly different approach to zero rating in 2017 when Federal Communication Commission (FCC) Chairman Ajit Pai declared that the FCC would not block consumer-friendly services. “These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace…Going forward, the Federal Communications Commission will not focus on denying Americans free data.”
US policymakers were right to reverse such harmful regulation well before the pandemic. More than 90 percent of US households with children used some online learning during the pandemic. US operators launched a variety to programs to keep Americans connected. The pandemic also exposed broadband affordability challenges which Congress is trying to address and ideally will incorporate the role of technology companies which profit directly from more users online.
Why limit end user rights in the name of neutrality?
Many net neutrality proponents counter that deviations from uniform pricing and traffic control are unfair and discriminatory. Rather than zero rate, they prefer unlimited plans with no data caps, so any app can be used without charge beyond the subscription allotment. It sounds good on the surface, but it makes networks more costly to build. From a consumer perspective, it’s a price control which denies consumers their freedom of choice to pay different rates for different data. Moreover as shown with Oak, prevailing UK policy unwittingly prohibits data discounts to promote socially beneficial applications and services for education, health, employment and so on.
Consumers, no strangers to differential pricing, enjoy this scores of apps using these techniques and technologies, notably ride hailing. Indeed off peak discounts, third party subsidies, and scaling prices for quality of delivery are commonplace for many apps and industries, but they are illegal for broadband.
Consider: most people don’t want advertisements, but under net neutrality, they must pay for ad data equally as for the content they want to see. Online advertising can consume as much as 25 percent of the cost of a mobile subscription, with video ads devouring as much as 40 percent of the data. One consumer-friendly feature would be to lower the resolution of ads, but that’s verboten.
Similarly on fixed networks, infrastructure costs for video streaming entertainment are applied across all users regardless of whether they view the content or not. Thus broadband policy socializes the cost for what is privately beneficial, a boon the world’s biggest internet platforms Google, Netflix, Amazon, Microsoft etc. They comprise as much as 80 percent of total internet data and are the leading net neutrality supporters. Naturally you want all data to be priced “equally” when it is disproportionately yours.
University of Valencia researchers document that net neutrality has effectively strengthened large content providers at the expense of small ones: “Big Tech companies, sheltered by the net neutrality policy, have flourished. They now have the power to exclude minor companies, and therefore their contents, from the Internet market in de facto defiance of the net neutrality principle.”
Such a dynamic played out in 2016 in India with the Google-supported campaign to criminalize data pricing differentiation like free WhatsApp for the poor, a platform used extensively for healthcare and emergencies. While Facebook was the target of the backlash, the policy succeeded to perpetuate Google’s advertising monopoly (some 75 percent in India today) and to delay homegrown Indian startups from getting a foothold in the ad market. Note, however, that during the pandemic India’s telecom regulator relented to allow zero rating for apps from the World Health Organization and India’s Ministry of Health and Family Welfare.
Self-defeating prophesies and policies
Consider “sponsored data”, the other side of zero rating, in which a content provider pays for the data. For example, a health care provider sponsors data for patients to watch videos on chronic disease management. Paying for patient’s data or subscription outright more than covers the cost to avoid an adverse health event. Indeed researchers at the Toulouse School of Economics find that sponsored data boosts consumption of high-value content, decreases network providers’ incentives to exclude low-value content, and compensates for the “missing price” of internet content. However beneficial sponsored data may be, it too is outlawed under net neutrality. While large tech platforms enjoy “sponsoring” their services through advertising, they don’t want the same benefit to be exercised by upstarts.
Another proffered regulatory solution is to allow zero rating through predetermined “categories”, for example all video streaming must be zero rated if one app is to be zero rated. However not all apps need or want zero rating. The point for the large tech companies is to blot any differentiation which presents competition.
Alternatively some claim that access to popular apps should not be free. However, if the problem is that the app has too large market share or behaves anti-competitively, authorities should address the issue with the app provider directly. Instead, policymakers have unwittingly punished consumers and broadband providers by saddling them with the regulation.
Rather than creating more regulatory bureaucracy, a better solution is to allow all zero rating and pro-consumer pricing. Authorities have sufficient tools to intervene if a problem emerges. Literally billions of users outside of Europe and India use some kind of zero rating, and there is no evidence of systematic harm.
Online learning is here to stay, but policy is needed to ensure it’s accessible to all
Education has been moving online for some time, but the pandemic made it permanent. Oak observed that 55 percent of teachers said they have shifted to collecting homework online, 39 percent to grading online. Oak’s zero rating program during the pandemic was universal and effective, serving all UK families and students without additional administration from parents or schools. Oak wants Ofcom to ensure a long-term policy solution for free access to online education and hopes that the net neutrality review will break the data barrier for disadvantaged children and ensure they have access to a full education. The UK should make broadband policy which legitimately serves end users, instead of honoring pseudo-consumer concepts perpetuated by Big Tech for its financial benefit.
Originally published in Forbes.