With the Pokémon Go craze sweeping the nation (including me), T-Mobile figured they could win a public relations coup and potentially a few customers with a brilliant gift: unlimited data when using the Pokémon Go app. There may be a potential darker side to that decision though. By effectively zero-rating Pokémon Go, meaning they are charging zero for using data with it, they may be continuing their quest to try to set a precedent that could undercut net neutrality.
To oversimplify, net neutrality is the idea that service providers treat all content equally. That means not allowing companies to pay for preferential treatment by internet service providers -- like creating a fast lane that makes only some sites load faster -- because that could push traffic on the internet to content produced by companies with the ability to pay a premium, making it even harder for small content producers and upstarts. The Federal Communications Commission decided to enshrine net neutrality last year, and a court upheld that decision in a major decision just last month.
So why isn't zero-rating a violation of the FCC rules? Because the strategy hasn't been explicitly addressed by regulators, particularly not in the app context. In fact, in a comment to U.S. News, T-Mobile has explicitly claimed that the FCC rules don't prohibit zero-rating. Pokemon Go isn't even T-Mobile's first use of zero-rating: use of all streaming services already doesn't towards your T-Mobile data count. They justified that as consistent with net neutrality by saying that any service that chooses to conform to their definition of a streaming service benefits from it, so they're not picking winners in the online ecosystem since smaller players can benefit too. The Pokémon Go zero-rating does not fit that justification; they are picking an individual winner and giving it preferential treatment.
Maybe this is a brilliant chess move by T-Mobile in its campaign for more flexibility to give preferential treatment to some services over other. By picking an app with massive popularity and positive sentiment to potentially undercut net neutrality -- a concept that can be hard for the average user to understand -- T-Mobile may have found a winning test case. That comes with some danger for the ecosystem though. Allowing zero-rating could create incentives for the average customer to stick primarily with products that can get zero-rating treatment from mobile carriers. If those apps allow in-game sponsored content, like Pokemon Go is planning to with sponsored Pokestops, advertisers would likely flock to zero-rated apps as well, concentrating the money in the ecosystem into a few services picked by the mobile carriers. We don't know for sure whether Niantic, the company that made Pokemon Go, has any deal with T-Mobile but it may not really matter. T-Mobile is just trying to set precedent allowing it to zero-rate particular apps.
Lots of players, from industry to advocacy groups, are asking for the FCC to give more guidance on how app zero-rating fits into the net neutrality regulation (despite how little data Pokemon Go actually uses). So far the FCC hasn't obliged, but you have to hope that T-Mobile's move will move it up their calendar. For now though, T-Mobile has made a bunch of people very happy that zero-rating is allowed.