T-Mobile Still Doesn't Understand (Or Simply Doesn't Care) That Their 'Music Freedom' Plan Tramples Net Neutrality

from the paved-with-good-intentions dept

Back in June we noted how T-Mobile had unveiled a new "Music Freedom" program that exempts the biggest music streaming companies from T-Mobile's usage caps. When introduced at the time, T-Mobile pitched the idea as a huge win for consumers, as you could listen to say -- Spotify -- without worrying about eroding your usage allotments. T-Mobile also insisted that if your favorite service isn't included, you can just Tweet T-Mobile to have it whitelisted for cap exemption. Sounds like a great deal for everybody, right?

Well, no. Imagine you're one of the thousands of smaller streaming services or non-profits arbitrarily deemed too small to get on the cap-exemption list. You're suddenly facing a steeper competitive slope than ever before, given that larger companies' services are excluded from the cap and yours aren't. Whereas T-Mobile should be delivering all bits equally, by injecting themselves into the middle, they've tilted the playing field against small operations and non-profits. Meanwhile, begging the company via Twitter for inclusion is far from a transparent process. Furthermore, in doing this, T-Mobile is quite clearly admitting that the data caps it puts on are artificially low, harming consumers by charging them extra if they happen to use a higher bandwidth service that hasn't buddy'd up with the company.

At the time it was announced, ultra-hip T-Mobile CEO John Legere was "genuinely surprised" by the criticism from neutrality advocates, arguing that because nobody was paying T-Mobile to bypass the caps -- it couldn't possibly be a neutrality violation. Judging from this recent Reddit conversation, many consumers are confused as well, and are quite eager to root against their best self interest. The FCC has also made it clear they think this is simply "creative pricing," and won't be prohibited by the agency's new neutrality rules.

But because consumers, hipsteresque CEOs and regulators don't understand what's happening doesn't make it less true: T-Mobile's idea (and AT&T's similarly-minded sponsored data effort) sets horrible precedents by letting carriers artificially inject themselves into a content and service ecosystem that is healthier with them out of the way. Accept the idea that carriers can use caps in such a discriminatory fashion, and you're opening the door to a world of aggressive and anti-competitive behavior.

This week T-Mobile announced they've added a few more small services like Google Play Music and SoundCloud, bringing the total list of cap-exempt services to 27 (how many streaming music, audio services, radio stations and podcast broadcasts exist in the world again?). Meanwhile, Legere seems no more enlightened as to why setting arbitrary usage limits then exempting only some companies isn't really a good idea, patting himself on the back for being so pro consumer:
"Music Freedom is pro-consumer, pro-music and pure Un-carrier," said John Legere, president and CEO of T-Mobile. “And today we’re taking another huge step toward our ultimate goal of including every streaming music service in the program. Anyone can play. No one pays. And everyone wins."
Except again, not everybody wins. Does a small independent streaming radio station too little to meet T-Mobile's invisible interest threshold for whitelisted services "win" if their bits are counted against the cap, but the bytes of Pandora aren't? Net neutrality is about carriers getting out of the way, not erecting annoying new arbitrary systems of control and monetization. T-Mobile has made some great, pro-consumer moves of late, but this isn't one of them. The company either doesn't understand that "Music Freedom" tramples all over net neutrality, or they understand this all too well and simply hope consumers are too stupid to notice.

Filed Under: data caps, john legere, music freedom, music streaming, net neutrality, open internet, streaming
Companies: t-mobile

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  1. icon
    Malor (profile), 25 Nov 2014 @ 8:13pm

    What they're doing isn't so bad: plus, you're coming from the wrong angle anyway.

    I think you're missing the boat a little bit on this one, Techdirt.

    Having done networking for a long time, one of the fundamental truths of being an ISP is that, for the most part, you're paying for bandwidth. T-Mobile is in that same position; their customers pay them for traffic, and then they buy the capacity to deliver that traffic from other people. (taking, of course, a hefty markup, since they're buying enormous circuits and get a heck of a volume deal.)

    One thing that T-Mobile can do, though, is avoid paying for traffic by peering directly with destination networks. That is, rather than buying transit via Cogent to get bits from Netflix, they can run a wire directly to Netflix, and then carry those bits over their own infrastructure without having to pay anyone else.

    What has net neutrality supporters really upset is when an ISP uses its monopoly control over its customers to extract rent from providers; they're demanding to be paid on both sides for delivering data to customers, when the fundamental idea of the Internet is that you're only supposed to get paid for bandwidth once, and that people are free to buy bandwidth from any provider. In essence, ISPs like AT&T are using their monopoly status to muscle out the competition, taking money away from Cogent, Level 3, and other transit providers, and demanding that it go into their pockets instead. This is profoundly abusive, and it's something to be furious about.

    But just running a link to another network, and avoiding paying for transit? That's just smart engineering. My take is that T-Mobile is saving money by directly peering with different services, and then passing those savings along to the customers. As long as they don't charge the provider anything, it's cool. In fact, it can save money for both sides; Netflix doesn't have to buy bandwidth for T-Mobile customers, and T-Mobile doesn't have to buy bandwidth for Netflix. They have a (significant!) upfront capital cost to buy the routers and run the fiber, and then it's done, and costs almost nothing to run. And all the money being spent goes to other companies entirely, like Cisco and Juniper and so on. There's no conflict of interest, it's just eliminating the middleman, and passing the savings along.

    Now, over the long haul, this could become a problem; T-Mobile might decide it wants to charge Netflix for access to T-Mobile's customers. That, in a word, is garbage. As long as that doesn't happen, as long as the peering agreements don't cost either side anything, other than the capital cost to build the link, then it's not such a big deal.

    And what about small players, without their own network numbers and BGP presence? Most of them are going to be so small that T-Mobile can probably just absorb the streaming cost without hurting too much. If they get big enough to be visible on the usage charts, then they can set up some kind of peering arrangement. If nothing else, they could set up a small remote presence in a colo where T-Mobile has equipment. This isn't hugely expensive, and any service pushing enough traffic to be noticeable on a giant network like that should easily have the money to set something up.

    Further: you're looking at this from the wrong angle, anyway. You're being a little horrified that T-Mobile is charging more for some bits than others. What you should actually be horrified about is the idea of charging per-bit at all. Data caps should not be allowed: ISPs should be required to sell bandwidth as commit speed, and burstable-to speed. This reflects the actual architecture of networking. Transferring bits from place to place is just barely this side of free, until you don't have enough space in your pipes, at which point you have to spend a bunch of money to run a bigger one... and then the run cost goes back to just about zero. Charging per bit is an absolute racket.

    Going with a commit and a burstable-to communicates truthful figures. Commit represents what everyone will get if they're all trying to use their connections at the same time, and will be quite low, but guaranteed to always be delivered, barring major hardware or software failure.

    Burstable-to is what everyone sells now, the headline number, and it's fundamentally a lie. Very few ISPs can actually deliver the bandwidth they're claiming to sell. This is what you should be furious about. Net neutrality is really only an issue because ISPs are under-provisioned. If they weren't allowed to lie anymore, if they were forced to sell only what they could really deliver, then there would be no need for prioritization, because there would be enough bandwidth.

    The whole idea behind caps is to try to monetize a free resource. Bits are so cheap you can think of them as costing nothing; it's not quite true, but it almost is. What actually costs money is peak demand, and that's where the commit and burstable-to figures come in. They represent your slice of the big pipes at the ISP. After you've paid for your slice, it's nobody's business what you do with it. Use it 24x7, or don't use it at all: those pipes cost the same amount either way. There's no marginal cost on usage.... the cost comes from laying in more capacity, and from paying the people to keep it all running. Those costs don't change based on usage.

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