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Netflix Throttling: Good for the Goose

News broke Thursday night that for more than five years, Netflix has been deliberately reducing the data rate of its video streams to AT&T and Verizon mobile customers. The streaming video company capped its video stream to a measly 600 Kbps, presumably to allow its customers to enjoy more video hours using less data.

First of all, this is pretty clearly not a violation of the net neutrality rules as currently implemented by the Federal Communications Commission (FCC). Nor should it be a violation of any rules. These are Netflix’s video streams, and it should be able to manage its data however it thinks will best please its customers. But what is good for the Netflix goose should be good for the gander: If Netflix is free to manage its traffic to better serve consumers, Internet Service Providers (ISPs), who are in an even better position to understand the traffic patterns and dynamics at play within the network itself, should be able to do the same. Same customers, same practice, same good outcome, but as it stands today, only one is unlawful.

That said, there are a couple of problems

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All Signs Point to Go for Zero-Rating

Mobile carriers across the world have been rolling out what are called zero-rated or free data products, allowing consumer access to certain data traffic without it counting against their monthly cap. The motivations for these services are different in different markets, but at least in the United States mobile carriers are trying to differentiate their services in a competitive fight over who can best meet consumers’ ever-increasing demand for streaming video.

Zero-rating has run into opposition from some of net neutrality’s more puritanical followers. Susan Crawford offered one of the more eye-opening harangues, claiming that allowing some of the world’s poorest people the choice to access basic information online for free is a “malignant” “surrendering of the Internet” that should be outlawed immediately.

Thankfully, the Federal Communications Commission (FCC) is not quite so hostile to pragmatic solutions to expand access and use of the Internet. In the Open Internet Order, the FCC laid out a case-by-case approach for overseeing zero-rating programs. Later, in a speech discussing zero-rating at the Computer History Museum, Chairman Tom Wheeler explained that “the Open Internet Order did not discourage this type of two-sided market”

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Florida’s Cell Phone Tax Cut Could Help Reduce the Digital Divide

Governor Rick Scott (R-FL) is asking the Florida legislature to cut $470 million in taxes that the state collects from residents on their cell phone, satellite, and television bills. This proposal to cut the cellphone and TV tax rate by 3.6 percentage points will not only put money back into the pockets of everyday Floridians, but it is also a positive step in the right direction to help reduce Florida’s digital divide and will enable more innovation though mobile broadband.

Florida has one of the highest tax rates for wireless services (16.59 percent), falling behind only Washington, Nebraska and New York. In fact, consumers in seven states—Washington, Nebraska, Rhode Island, New York, Illinois, Missouri, and Florida—pay in excess of 20 percent of their bills for their combined state and federal tax rates.

So why have these taxes to begin with? States have traditionally turned to taxing services that people consume in their home because it is a reliable form of revenue. Someone in Florida cannot travel to Georgia to get a lower tax rate on their cell phone bill like they could for purchases of goods that include

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