Are low data caps with byzantine exemptions in your best interest as an Internet user? “Without question,” says wireless industry trade group CTIA. We’re not so sure.

When wireless broadband companies like AT&T and Verizon impose data-usage caps and then offer special exemptions from those caps for some content and not others, it’s usually called zero-rating.

In a re-branding effort, CTIA claims that zero-rated pricing schemes are actually “free data.” But there’s nothing free about them. You pay for your connection each month when you pay your mobile bill. Your friendly wireless provider turns around and double-charges content providers to send data over the connection you’ve already paid for — with no transparency about how the amounts they charge you and the content providers square up with the real cost of delivering the data.

It all starts with data caps. AT&T, Verizon and others have set arbitrarily low and punitive data-usage caps, limiting the value and utility of your mobile broadband service.

Wireless carriers once claimed that they needed such caps to manage network congestion. But if these caps truly served an important technological need, why would companies be so quick to exempt their own content and that of every toll-paying provider? The ease and eagerness with which AT&T and Verizon have abandoned these caps for those who pay up shows that the limits they impose on our data usage are largely artificial.

After setting draconian limits that discourage data usage, these carriers are asking “sponsors” to pay to have their content exempted. They claim that this practice saves wireless users money while supporting the buildout of the network. In essence, these ISPs are imposing a new toll on websites and apps in an entirely unregulated market — and calling it “competitive choice” for users and sponsors alike. (Some choice.) The wireless carriers and their lobbyists assure customers that all of this will save us money — but they offer no details about the costs we’re supposedly spared when someone else pays this trumped-up toll.  

Consumers should be grateful, CTIA says, for exemptions from usage caps — but people shouldn’t have to worry about such limitations to begin with. If customers had larger data allowances at affordable prices, they could use their data however they saw fit. The freedom to choose would benefit consumers far more than narrow exemptions for specific content that ISPs select based on application type or willingness to pay the new toll.

If customers enjoyed this kind of freedom, AT&T and Verizon could charge you only once for your data. But zero-rating pricing schemes aren’t about serving consumers or offering “free data” — they’re about delivering more money to your ISP.

Not every case of zero-rating is the same. T-Mobile’s Binge On service, for example, doesn’t charge providers to participate. However, it does throttle all video content, regardless of whether a customer has opted out of Binge On, and offers only a narrow exemption for video content instead of allowing customers to choose how they’d like to use this allegedly “free” data.

CTIA wants you to think zero-rating services are a gift from your ISP to you, but the ones benefiting are the ISPs themselves. Instead of double-charging and ripping off consumers, companies like AT&T and Verizon should focus on providing what their customers really want: truly affordable broadband access with no arbitrary caps attached.

Original photo by Flickr user Don Harder