Zero stars for zero understanding of consumer-friendly ‘zero-rating’

[Commentary] Less data at higher prices. Fewer people online and less experimentation in new digital business models. This would be the result of prohibiting digital content firms from subsidizing the data plans of Internet users, especially entry level and low-income consumers, also known as sponsored data or "zero-rating".

The suggested prohibition is the latest ideological indulgence of the law professors, particularly Susan Crawford, who think it’s a good idea to start regulating the freest, and most successful, realm in the American economy -- the Internet. The economics are clear: partnerships like sponsored data are most often pro-consumer. They allow users to consume more data than without the subsidy, possibly far more if it is the marginal factor in obtaining Internet access. If we “outlaw” these plans, however, mobile data prices might rise for all consumers. Is it possible that a firm could grow so large and so dominant that it blocked consumers from accessing most of the Internet, or prevented the emergence of new firms? Far fetched, at best.

[Bret Swanson is president of Entropy Economics LLC, a strategic research firm ]