No sooner was Halloween over than the holiday deals began to flood inboxes, websites, mailboxes, magazines, newspapers, and stores. Discounts of 20%, 40%, 60% are ubiquitous. Offers of discounts on secondary purchases abound. Better yet, offers of free goods and services are everywhere.
Buy a laptop and save on the mouse and software. Buy a burger and get a free drink. Rent an apartment and get the first month free. Buy a box of cereal and the second is free. Buy a package of hot dogs and a package of vegetables is free. Buy a pair of shoes for your son and your daughter’s sneakers are free. Buy a blouse for your daughter and your son’s tee shirt is free. Even some hearing aids come with free batteries. Deals, especially deals built around free, are offered for all conceivable goods and services.
For some shoppers, finding the best deals is a sport. For some, deals provide a way to afford luxuries. But for many households, deals are a necessity. Two-for-one food offers make it possible for many seniors to avoid hunger while still covering the cost of housing and medicine. For many parents struggling to feed, house, and clothe their children on a low income, sales and deals and free offers make the difference between a tolerable existence and extreme poverty.
It is, therefore, particularly surprising and galling that groups that claim to promote consumers’ interests are attempting to persuade the current Federal Communications Commission in its last couple of months to prohibit offers of free data. Like so many other vendors in the U.S. economy, wireless carriers have teamed up with partners to offer deals to consumers. One of the most popular has been an offer of wireless data carriage that is free to the end-user because it is paid for by the content-provider, who in many cases recovers the cost via advertising revenues.
The advantage to consumers, especially low-income consumers, of free data is similar to the advantage gained from any other offer of discounted or free goods and services. It stretches the budget to cover something that may not be affordable to them without the discount. Deals that make access to Internet-based content free to anyone with the income to otherwise afford it would seem a very good outcome for Americans.
The argument against free data is that it is anti-competitive because not all content providers can afford to subsidize their customers’ wireless service. The same argument can be made against all deals offered to consumers throughout the economy. The individual who produces granola in a home kitchen does not have the budget of General Mills and can’t match a two-for-one offer on Cheerios. The artisan who hand-sews clothes for sale in craft stores can’t match the Gap’s financial might. The same logic that would kill offers of free data would kill all offers of discounts or free goods and services to consumers.
The objections to the wireless companies’ offers are especially maddening because these companies have opened their platforms to all content providers, to anyone who wants to partner. Shelf-space in physical retail stores is limited and very few vendors who are not giants get the space and visibility they need to sell their goods. By contrast, shelf-space on the Internet is unlimited. Wireless carriers are making it possible for any vendor who wants to promote his or her services or applications via free data to do so. Marketing and promotion always carry some cost. The wireless carriers make it possible for each vendor to weigh the cost of providing free data against the cost of other kinds of promotion and to choose the vehicle that serves that vendor best. In the wireless world, small vendors–who are shut out of so many other venues–get to make that choice.
No vendor is forced to provide free data and no consumer is forced to sign up for it. For both sides, it is an option that can be utilized if it makes sense. Various vendors and various consumers will reach different decisions, depending on their individual budgets, circumstances, and preferences. What matters is that they all get to make that choice. No regulator should allow ideology to prevent either vendors or consumers from making their own choices. Hopefully, the next FCC will see that Free is good.
