Net neutrality and zero-rating: when regulators police your business model

The zero-rating question sits in a gray zone these rules didn't originally anticipate. Zero-rating means a carrier exempts certain apps or services from counting against a user's data cap. T-Mobile US ran "Binge On" (video streaming exempt from data caps) and "Music Freedom" for years. Is that a consumer-friendly perk or a disguised way of picking winners, since the exemption favors partnered apps over rivals who don't or can't pay to participate? Regulators worldwide have landed in different places on this exact question.

Three regulatory postures, three real outcomes

India: hard ban. TRAI's 2016 regulation prohibits differential pricing for data based on content. No zero-rating, period, regardless of whether money changes hands. The logic: any content-based pricing distinction, even a "free" one, distorts which services users discover and adopt, especially in a market where many users' first internet experience is through one bundled app. Free Basics was redesigned and eventually withdrawn from India entirely.

European Union: conditional tolerance, tightening over time. The EU's Open Internet Regulation (2015/2120), enforced by national regulators and interpreted through guidelines from BEREC (Body of European Regulators for Electronic Communications), permits zero-rating in principle but has struck down specific implementations. The Court of Justice of the European Union ruled in 2021 (in cases involving Telenor and Vodafone Hungary) that zero-rating combined with subsequent throttling of non-zero-rated traffic once a cap is hit violates the regulation. The practice isn't banned outright, but the details of implementation are litigated case by case.

United States: it depends which year you ask. Under the 2015 Open Internet Order, the FCC treated zero-rating case by case rather than banning it. Under the 2017 repeal (the "Restoring Internet Freedom Order"), there was no federal rule against it at all, only a transparency requirement. The 2024 attempt to restore utility-style regulation (Title II reclassification under the Communications Act) would have brought zero-rating scrutiny back, but the Sixth Circuit Court of Appeals struck that order down in January 2025, ruling the FCC lacked authority absent clearer congressional direction. As of 2026, US net neutrality enforcement sits primarily at the state level: California's 2018 net neutrality law (SB-822) survived a carrier legal challenge and remains active, meaning a carrier's obligations can differ depending on which US state a customer is in.

Why this matters for business strategy, not just legal compliance

This isn't an abstract compliance checkbox. Net neutrality rules determine which monetization plays are even legal to build.

Sponsored data and zero-rating deals are a real revenue line for carriers in permissive jurisdictions. A carrier can charge a streaming service to zero-rate its app, in effect selling app companies a distribution advantage with the carrier's own subscriber base. That's a viable product in the US (federally, currently) and in parts of the EU with careful design. It is flatly illegal in India.

5G network slicing (allocating dedicated, differentiated quality-of-service lanes on the same physical network, for example a low-latency slice for autonomous vehicle connectivity versus a best-effort slice for regular browsing) raises the paid-prioritization question directly. Regulators are actively working out whether specialized services sold to enterprise customers count as legitimate "specialized services" (generally allowed under EU rules if they don't degrade general internet access) or as prioritization dressed up in new technical language. This is a live, unresolved compliance question for carriers building 5G B2B products right now.

Platform and carrier partnerships (a streaming bundle with a mobile plan, a carrier-branded app store with preferential data treatment) need a jurisdiction-by-jurisdiction legal review before launch, not after. A bundling strategy that works in the US may need a completely different structure in the EU, and may be entirely blocked in India.

For a useful primer with more technical depth on the mechanics regulators actually inspect, see the Electronic Frontier Foundation's net neutrality resources, a nonprofit digital rights organization that has tracked these cases closely across jurisdictions.

The compliance posture professionals need

Three practical habits separate telecom professionals who navigate this well from those who get blindsided:

1. Track the regulator, not just the law. Net neutrality law text often stays static while regulator posture swings with political appointments (the FCC composition changes with each US presidential administration). The FCC's 2015, 2017, and 2024 orders all interpreted the same underlying statute (the Communications Act) differently.

2. Design for the strictest applicable jurisdiction if you operate across borders. A global carrier or platform (Facebook's Free Basics being the cautionary tale) cannot assume a product that's compliant in one market transfers cleanly to another. India's flat ban is the strictest major-market rule; anything designed to survive it will likely be safe elsewhere, though not automatically profitable elsewhere.

3. Watch adjacent enforcement bodies, not just telecom regulators. In the EU, competition authorities under DGDGData governance is the set of policies, roles, and processes that ensure data is accurate, secure, well-defined, and used responsibly across an organization.Voir la définition complète → Competition and data protection regulators under GDPR (General Data Protection Regulation) can each independently constrain a zero-rating or bundling deal even if BEREC's net neutrality guidelines don't. Compliance is rarely a single-agency question.

Key Takeaways

• Net neutrality rules (no blocking, no throttling, no paid prioritization) are enforced very differently across markets: India bans zero-rating outright (TRAI, 2016), the EU allows it conditionally under BEREC guidelines and CJEU case law, and the US currently has no binding federal rule after the Sixth Circuit vacated the FCC's 2024 restoration attempt, though California's state law (SB-822) still applies.
• Zero-rating (exempting specific apps from data caps) is the most commercially contested gray zone: it can be a legitimate carrier revenue product or an illegal content-based pricing distinction, depending entirely on jurisdiction and implementation details.
• 5G network slicing and "specialized services" are the next frontier of this debate: regulators haven't fully settled whether differentiated quality-of-service lanes for enterprise use cases constitute lawful specialization or disguised prioritization.
• Business model design for carriers and platforms must happen jurisdiction-by-jurisdiction and regulator-by-regulator, since the same legal statute can produce opposite rules depending on political administration and court challenges, as the FCC's three reversals since 2015 demonstrate.
• Net neutrality compliance rarely sits with one regulator alone: competition authorities and data protection regulators (like under GDPR in the EU) can independently block deals that a telecom-specific regulator would otherwise allow.