In the Netherlands a Rotterdam Court ruled that T-Mobile’s zero rated music service did not go against European net neutrality rules. Zero-rating is a commercial practice which consists of allowing end-users to access particular content, services or applications without being charged or having it count towards their data usage. The court’s decision is significant, as the Dutch Government could be argued to be one of the strongest proponents of net neutrality in Europe. The Netherlands was the first country in Europe to introduce net neutrality legislation way back in 2012. Specifically, the court ruled that T-Mobile Netherlands could zero rate their Music Freedom music service, which lets customer’s stream music from T- Mobile’s content partners such as Deezer and Spotify. This is despite the fact that zero-rating certain services falling outside data bundles is not allowed by Dutch law. However, it is by the European rules on net neutrality, and the court decided that the Netherlands cannot to go against the European rules.
So looks like zero rating as a means of differentiation is acceptable – as long as the service is free of charge and there is no preferential treatment of traffic.
Elsewhere, in Germany, Deutsche Telekom (DT) launched its StreamOn service offering zero rated music and video services from its partners. This move not only provides an attractive option for DT customers, but initiates a mutually beneficial symbiotic relationship between the content providers and DT.
DT’s content partners get access to a possible 200+ million customers who can use their content. By making StreamOn free of charge DT is ensuring that it is not in breach of European Net Neutrality law. DT have stressed that “the partner doesn’t pay anything,” and that “StreamOn is open for all content providers.” This is great news for content providers who are quickly scrambling to join StreamOn and get their content distributed free of charge to DT’s customers. Current partners for video include Netflix, Amazon Prime Video, YouTube, Sky Go, ARD/ZDF’s youth service ‘funk’, ZDF, 7TV (ProSiebenSat.1), Spiegel TV, Entertain TV, Telekom Basketball and Telekom Icehockey. On the music side the partners include Apple Music, Amazon Music Unlimited, Napster, Juke! Music and Radioplayer.de.
Correspondingly, this makes great commercial sense for Deutsche Telekom. They have successfully used their intrinsic value (i.e. their ownership of access to their substantial subscriber base) to attract all the major content providers. These relationships make their offering in the market a very attractive proposition thus aiding in reducing churn, increasing subscriber acquisitions and increasing the average revenues per customer too. For example, StreamOn is available to all customers on the Magenta M (3GB) plan and above which is only €10/month more of the popular Magenta S (1GB) plan.
So, content providers get their content distributed free of charge to a multi-million customer base, DT gets another tool to entice customers to upgrade and customers get zero rated content. There are options to flat rate data bundling without limits when operators hold the best hand. Zero rating is a perfect win-win-win for the content companies, the service provider and, most importantly, the customer.
Download Openet’s white paper: Working with Net Neutrality – Clarity, Zero Rating and a Win-win for Service Providers and Customers