Written by Barrington Salmon
There seems to be a major policy disagreement building in the tech space, and it’s the most inexplicable beef I’ve seen in a long time.
On one side are the self-professed consumer tech activists; on the other are real consumer groups representing many minorities and economically disadvantaged communities. Stuck in the middle is an Obama administration agency that is increasingly being pressured by well-organized activists to adopt a more hands-on approach to internet regulation. If the agency succumbs, it would result in a terrible setback for low-income and underrepresented consumers everywhere.
At issue are ‘free data’ plans, a new and extremely popular offering from wireless phone carriers including AT&T, Sprint, T-Mobile, and Verizon. Low-income consumers will especially benefit from “free data†programs because, as the name implies, they offer lots and lots of free data.
Here’s how it works: content providers like ESPN and Pandora, advertisers, or the mobile providers pick up the tab for the data, and in turn, consumers can access that content for free on the phones as it doesn’t count against their data allotment.
Two of the most popular free data plans on the market are T-Mobile’s Binge On and Music Freedom plans. They offer more than 100 music and video-streaming services free to T-Mobile customers–services such as Amazon Video, HBO NOW, Hulu, Netflix, Apple Music, Rhapsody, and on and on.
Free data plans are just the latest marketing tactic in a long corporate tradition of companies giving away product in exchange for getting consumers in the door. They’re not dissimilar to buy-one-get-one coupons, free refills, free Wi-Fi, interest-free credit card offers, etc. In the same way that free samples might get a passerby in the doors, free data gives users a little incentive to visit a site or access content.
Unfortunately, the Federal Communications Commission is under growing pressure by activist groups to ban these offerings. The argument being hoisted on the FCC is pretty convoluted, but it basically boils down to a concern that because wireless providers decide which content providers they will offer free data programs with, they could potentially play favorites with some while shutting others out.
One problem with this policy goal is that the logic behind it doesn’t make much sense. The fact is that if one wireless carrier isn’t offering content that users want, chances are another carrier will. Mobile providers have to provide the services their customers want or they will lose their market share. Not to mention that free data programs make it more likely that a consumer will view competing content by freeing up additional data to use surfing the net.
But an even bigger problem with any ban on free data is that it will hurt low-income consumers. Thirteen percent of people who earn less than $30,000 per year rely on a smartphone to access the internet. About 12% of African Americans and Latinos are ‘smartphone dependent,’ meaning that if you take away their smartphone, they simply will not have access to the internet. As a comparison, only 4% of white consumers are smartphone dependent.
A recent report by the Multicultural Media, Telecom and Internet Council (MMTC), a leading voice for the minority community on communications issues, concluded that free data plans provide “profound and wide-ranging†benefits to millions of people in multicultural communities. “Free data provides much needed relief to families with limited resources who have to count every penny and would otherwise be forced to miss out on the many opportunities broadband access affords,†asserted MMTC President and Chief Executive Kim Keenan.
In other words, free data plans offer minorities an opportunity to access online resources they otherwise might not be able to–or that they would face sizeable costs to get to. Who’s to tell these communities–especially communities of color–they can’t have free access to online material because maybe, just maybe, it’s not the exact content they want?
Freebies like free data offer a win-win outcome for consumers and businesses alike. On one hand, consumers receive a product, service, or discount they otherwise would not. And on the other, that business gets an opportunity to build its customer base and expand its operations.
President Obama has been a tremendous advocate for bringing more people online and reducing the cost and barriers to use of the internet, and that’s critically important given how important digital literacy is for the jobs of tomorrow.
The talk coming out of the FCC has, for the most part, echoed the president’s. Let’s hope it continues.
Tens of thousands of minority consumers who benefit from free data offerings can only hope that the FCC resists alarmist calls from activists and maintains its current approach as free data plans continue to evolve.
Any proposal to ban free data runs counter to the goal of expanding access to the internet. Doing so would close off a critically important on-ramp for low-income consumers by denying them access to reliable, affordable internet access.
Barrington Salmon is a Washington, D.C. – based freelance writer, specializing in civil rights and economic policy issues from a Black perspective.