Subsidized Data Delivery Via "Toll-Free" Apps

Thomas Sachson, Founding Member, Box Top Solutions

Date: Wednesday, June 29

Time: 9:30 - 9:45 AM

Location: Salon E

Category: Digital Economics & Business Models

Carriers have been talking about building a "toll-free" data service on the web for years, but to date the 1-800 voice model has failed to materialize on the Internet. While there have been the occasional free data offerings (like the Facebook Zero mobile app), true reverse billing of data has proven elusive due to the tremendous complexity of building such capabilities into the carrier network. Making matters worse, the current network centric approach mandates that any toll-free system be a "big play" requiring large content providers and carriers to agree a bandwidth pricing and revenue share framework for the subsidized delivery of content. As such, toll-free data models threaten to radically change the model for all sides -- and this is not something that carriers or content providers are comfortable with.

However, with the widespread growth and acceptance of native applications (e.g., Android) there is now the opportunity to load bandwidth monitoring and payment instructions into widely distributed applications that are pre-approved by carriers in particular jurisdictions. The result is a disintermediated billing model that takes the bandwidth recordation process out of the carrier network and moves it to the edge on the consumer device itself. Not only would this swarm of toll-free apps "at the edge" be relatively easy to deploy and scalable, but it allows the carriers and content providers to gradually rollout products where specific slivers of bandwidth are custom bundled with associated content in a manner that is iterative -- making the move to toll-free data delivery models evolutionary, not revolutionary.

In terms of consumer benefits, the availability of a toll-free platform (as an addition to existing subscription choices -- not in lieu of) will make the cost of jumping to broadband all the more affordable, especially if many providers of public services (schools, job training, hospitals, social services) take advantage of the system and pay the modest data toll for engaging with their constituents. Similarly, many content providers will take the view that a "1-800" data delivery strategy is merited for acquiring and retaining online customers, and will soon offer basic services on a subsidized data delivery basis. As such, it is likely that such a well-rounded ecosystem of toll-free applications could be instrumental in connecting the unconnected and helping to close the digital divide.

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