Re:Why 'zero rating' is the new battleground in net neutrali...
by vidarh on Tuesday April 07, 2015 @07:33AM
(#9333192)
Without zero-rating, ISPs still have a strong incentive to make the effort to peer with service providers because it cuts their transit costs.
The article points out the big downside: Zero rating takes away a strong incentive to raise bandwidth caps, as low bandwidth caps makes it more attractive for content providers to negotiate zero-rating deals.
The net result is a market heavily distorted in favour of a small set of major content providers.
> it discourages passing on savings made by peering with companies to consumers.
Cellphone data costs rarely have much relation to transit cost. Ex. my provider in the UK offers 2GB at 20 pounds a month. The actual data cost from a really expensive transit provider in a non-carrier neutral data centre for 2GB is about 7p. 0.07 pounds.... With some peering, decent volume, and sourcing bandwidth in a carrier neutral location where there's decent competition would bring that down to a tiny fraction.
The article points out the big downside: Zero rating takes away a strong incentive to raise bandwidth caps, as low bandwidth caps makes it more attractive for content providers to negotiate zero-rating deals.
The net result is a market heavily distorted in favour of a small set of major content providers.
> it discourages passing on savings made by peering with companies to consumers.
Cellphone data costs rarely have much relation to transit cost. Ex. my provider in the UK offers 2GB at 20 pounds a month. The actual data cost from a really expensive transit provider in a non-carrier neutral data centre for 2GB is about 7p. 0.07 pounds.... With some peering, decent volume, and sourcing bandwidth in a carrier neutral location where there's decent competition would bring that down to a tiny fraction.