Diary of a Sports Cord Cutter: Zero Rating

By Brad Hubbard | @bradhubbard | 11.5.2016

A week or so ago Sling TV CEO Roger Lynch did his first ever Periscope live broadcast. While he couldn’t talk about specifics (partially because A) why would you and B) Dish was entering a quite period for it’s next earning release) he did point out that Sling TV sees new users every month but a major event like the Olympics triggers bigger pops in the user base.He also mentioned that he didn’t think that going to a ‘zero rating’ was a good idea.

With the recent announcement of AT&T purchasing Time Warner and another AT&T subsidiary DirecTV launching their OTT option this month with a ‘zero rating’ it makes you wonder which path we’ll go down.

‘Zero rating’ is when the backbone provider (AT&T, Century Link, Verizon, etc) allow certain types of content without having it content against you’re bandwidth limit. Now T-Mobile already does a version of this but in their case the content provider (Netflix, MLB, MLS, etc) have to except a lower quality stream in order to keep other content moving through the pipe. In AT&T’s case, according to a recent article in the Wall Street Journal, they say this will increase competition because anyone can pay DirecTV to have a ‘zero rating.’

So what does this mean to you and your ability to watch the Nebraska at Ohio State game on ESPN via an OTT application? Well it means that you have more options to watch the game depending on your device and application. It also means that there is a chance, however remote, that you could not have the ability to see the game.

Being a sports cord cutter for about a year now, I have come close but have not reached my data limit with my ISP. It would be nice if commercials didn’t count against the data cap but that is a technological innovation that isn’t very sexy to build. Not sure how many customers hit the 300GB limit most ISP’s are putting on their user but I would presume that it’s not a lot.

If AT&T wants to go down the road of having outfits like Netflix, MLB and others pay them so consumers won’t have their data caps maxed out then I think they are in for a rude awakening. There is nothing stopping AT&T or their subsidiary DirecTV from raising the price on the content provider and the customer in the name of meeting quarterly earnings. I would venture a guess that this is there plan.

Why is someone like Lynch against this, because it’s not a sustainable path. ‘Zero rating’ is essentially an end run around net neutrality. It would make, by default, the ISP’s the revenue winners in this future of video viewing. It puts the ball clearly in the backbone company’s court and invites a ‘pay to play’ model down the line.

Now back to that Nebraska at Ohio State game. If the backbone companies are able to initiate this ‘zero rating’ then if you are a Verizon customer, there is a chance that Disney (ESPN’s parent company) didn’t want to pay Verizon’s fee and therefore you cannot watch the game. I think that chance is slim but well within this model is a lower quality stream. In other words you are in the back of the bus viewing wise and there would not be much you could do about it.

‘Zero rating’ is not a really fair model for the user or the content providers or distributors. The backbone companies like AT&T are going to make their money because they are a necessity to modern living and they have the ability to put on caps which could also lead to revenue grow however inconsistent that may be. This is not the business model of the future. New models need to arise and they will as more consumers cut the cord, but the ‘Zero rating’ is not it.

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