In developing countries where nearly all users pay for their Internet on a capped and metered basis (rather than having the “all you can eat” unlimited Internet data packages on offer in many developed countries), zero-rating — where data is offered that does not count toward the user’s data cap — is a subsidy that can be important to operators, content providers and users. Social media and text-messaging applications are among the content that is commonly zero-rated.

For users, zero-rating provides an opportunity to save money because they bear no cost of the zero-rated data. For telecom operators and content providers, zero-rating is an opportunity to increase their customer base — as long as appealing content is zero-rated.

But zero-rating has proven to be hugely controversial. The debate touches upon issues of net neutrality — the concept that all content should be treated equally on the Internet — market power, privacy, security and social equity.

This paper examines the spectrum of arguments for and against zero-rating. It analyzes each issue from the perspective of developing countries — countries with market conditions vastly different from those of Europe or the Americas in terms of connectivity, affordability, quality of service and availability of relevant content for users.

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The Global Commission on Internet Governance was established in January 2014 to articulate and advance a strategic vision for the future of Internet governance. The two-year project conducted and supported independent research on internet-related dimensions of global public policy, culminating in an official commission report that articulates concrete policy recommendations for the future of Internet governance.
  • Helani Galpaya is CEO of LIRNEasia, a pro-poor, pro-market think tank working across the Asia-Pacific region on infrastructure policy and regulatory issues.