Well, this has really turned into quite a week for T-Mobile CEO John Legere, huh? First, his lies about BingeOn throttling were exposed. Then he doubled down on the lie insisting that BingeOn wasn't throttling despite clear evidence that it is. Then, he attacked EFF for exposing his lie. All the meanwhile, T-Mobile spokespeople were confirming that the company is, absolutely, slowing down all video traffic.
In light of recent events and comments made by your CEO, John Legere, we have decided to halt our participation in Binge On and disable our traffic shaping rules for the time being. As per the agreement, please consider this 24 hours notice that 4Stream.TV will no longer participate in the program.
As net neutrality supporters and EFF Members, we encourage you to be more honest and transparent about the issue and develop a program that we can be proud to participate in.
Kudos to Patrick Hampson and Aaron Zufall for making that decision.
Of course... the unfortunate truth, as we now know from all of this, is that even once they've decided not to participate in the program it doesn't change the fact that their videos will get throttled.
The T-Mobile throttling saga is getting worse. Their PR people have totally stopped responding to me after I pointed out how they were lying about their claims to be "optimizing" video when they were really throttling. And then the company's CEO, John Legere insisted that claims that T-Mobile was "throttling" were bullshit (and then, bizarrely attacked EFF).
T-Mobile customers who activate the company’s controversial Binge On video service will experience downgraded internet connection speeds when viewing videos on YouTube or other sites that don’t take part in Binge On, a T-Mobile spokesperson confirmed today. They’ll also experience slower speeds when trying to download video files for offline use from websites that do not participate in Binge On, at least until the customer deactivates the service.
Of course, even that statement is wrong. It's not for "customers who activate" Binge On. T-Mobile automatically activated it for everyone, and then let you call in to customer service to deactivate it.
But the way that T-Mobile tries to insist that this is not throttling is now to argue that because users can turn it off that's why it's not throttling. Yesterday we noted that tricky sleight of mouth when Legere added an unnecessary clause to the definition of throttling. Here's John Legere's statement yesterday:
What throttling is is slowing down data and removing customer control. Let me be clear. BingeOn is neither of those things.
And again, there are two major problems with this statement: (1) As his own company's spokesperson is now admitting, yes, they absolutely do slow down the data and (2) "removing customer control" has nothing to do with the definition of throttling. Especially when they made the initial choice for all customers.
And, just to add to this, let me remind you what a T-Mobile spokesperson told me via email just a couple of weeks ago:
Using the term “throttle” is misleading. We aren’t slowing down YouTube or any other site. In fact, because video is optimized for mobile devices, streaming from these sites should be just as fast, if not faster than before. A better phrase is “mobile optimized” or “lower resolution.”
And yet now the company is admitting that they are, in fact, slowing down YouTube, not "optimizing" it or making the resolution lower. As I said at the time, T-Mobile is flat out lying. And now two statements from the company directly contradict each other, and the company's CEO is still insisting that the company isn't doing what the company admits it's doing.
I've seen some corporate snafu meltdowns before, but this is reaching epic levels -- and that's bad news for a company that had spent so much time building up a reputation as a "straight shooter." Good reputations are hard to build, but easy to let slip away....
I kinda feel bad for the PR people at T-Mobile. This morning, CEO John Legere put out a completely bullshit statement pretending to respond to the accusations that its BingeOn program is throttling online video. It didn't address the actual issues, made statements that were clearly false, and then accused people questioning the program of being "jerks." That seemed weird, considering the widespread concerns about all of this combined with T-Mobile's attempt to brand itself as the only consumer friendly mobile service provider.
But, if you really wanted to undermine the idea that you're a "consumer-first" operation that "cares about the open internet" and had to pick one group that you shouldn't go off on an unhinged rant about, you'd probably pick EFF. The group, which has been around forever, is somewhat famous for its willingness to fight for the public's digital rights, and unwillingness to compromise its beliefs. It has regularly sued or challenged numerous big companies that have undermined privacy and the open internet, including AT&T and Google.
I've emailed T-Mobile's PR people to find out if Legere really doesn't know what EFF is, or if he really thinks that EFF is somehow a front group for a company attacking T-Mobile. I doubt I'll hear much of a response. But if Legere wanted to totally undermine his pro-consumer position in a single sentence, I don't think he could have picked a much worse one than what he actually came out with.
from the they're-wrong-about-the-throttling,-maybe-not-on-the-jerk-thing dept
On Monday we wrote about T-Mobile flat out lying about the nature of its BingeOn mobile video service -- and after a couple of days of silence, the company has come out swinging -- by lying some more and weirdly attacking the people who have accurately portrayed the problems of the service. As a quick reminder, the company launched this service a few months ago, where the company claimed two things (though didn't make it entirely clear how separate these two things were): (1) that the company would not count data for streaming video for certain "partner" companies and (2) that it would be "optimizing" video for all users (though through a convoluted process, you could opt-out).
There were a bunch of problems with this, starting with the fact that favoring some partner traffic over others to exempt it from a cap (i.e., zero rating) is a sketchy way to backdoor in net neutrality violations. But, the bigger issue was that almost everything about T-Mobile's announcement implied that it was only "partner" video that was being "optimized" while the reality was that they were doing it for any video they could find (even downloaded, not streamed). The biggest problem of all, however, was that the video was not being "optimized" but throttled by slowing down video.
Once the throttling was called out, T-Mobile went on a weird PR campaign, flat out lying, and saying that what they were doing was "optimizing" not throttling and that it would make videos stream faster and save users data. However, as we pointed out, that's blatantly false. Videos from YouTube, for example, were encrypted, meaning that T-Mobile had no way to "optimize" it, and tests from EFF proved pretty conclusively that the only thing T-Mobile was doing was slowing connection speeds down to 1.5 Mbps when it sensed video downloads of any kind (so not even streaming), and that actually meant that the full amount of data was going through in many cases, rather than an "optimized" file. EFF even got T-Mobile to admit that this was all they were doing.
So that makes the response of T-Mobile execs yesterday and today totally baffling because rather than actually respond to the charges, they've doubled down on the blatant lying, suggesting that either it's executives have no idea what the company is actually doing, or that they are purposely lying to their users, which isn't exactly the "uncarrier" way that the company likes to promote.
We'll start with the big cheese himself, CEO John Legere, whose claim to fame is how "edgy" he is as a big company CEO. He's now released a statement and a video that are in typical Legere outspoken fashion -- but it's full of blatant lies.
The video and the typed statement are fairly similar, but Legere adds some extra color in the video version.
Let's parse some of the statements. I'll mostly be using the ones from the written statement as they're easier to cut and paste, rather than transcribe, but a few from the video are worth calling out directly.
I’ve seen and heard enough comments and headlines this week about our Binge On video service that it’s time to set the record straight. There are groups out there confusing consumers and questioning the choices that we fight so hard to give our customers. Clearly we have very different views of how customers get to make their choices -- or even if they’re allowed to have choices at all! It’s bewildering …so I want to talk about this.
Of course, this is a nice, but misleading attempt to frame the conversation. No one is complaining about "giving choices to consumers." They're complaining about (1) misleading consumers and (2) providing a worse overall experience by throttling which (3) directly violates the the FCC's prohibition on throttling. The next part I'm taking from the video itself, rather than the printed statement, because Legere goes much further in the video, including the curses, which magically don't show up in the printed version:
There are people out there saying we’re “throttling.” That's a game of semantics and it's bullshit! That's not what we're doing. Really! What throttling is is slowing down data and removing customer control. Let me be clear. BingeOn is neither of those things.
This is flat out wrong and suggests Legere doesn't even know the details of his own service. As the EFF's tests proved (and the fact that YouTube videos are encrypted should make clear) T-Mobile is absolutely slowing down data. In fact, EFF got T-Mobile to confirm this, so Legere claiming it's "bullshit" is... well... bullshit!
But he's playing some tricky word games here, claiming that throttling is not just slowing down data, but also removing customer control. That's (1) not true and (2) also misleading. For all of Legere and T-Mobile's talk about "giving more options to consumers" or whatever, they're totally leaving out the fact that they automatically turned this on for all users without a clear explanation as to what was happening, leading to multiple consumer complaints about how their streaming videos were no longer functioning properly -- even for users on unlimited data plans.
Customer choice? Sure they could "opt-out" after through a convoluted process that many did not understand. But T-Mobile made the choice for all its users, rather than providing a choice for its customers to make.
Mobile customers don’t always want or need giant heavy data files. So we built technology to optimize for mobile screens and stream at a bitrate designed to stretch your mobile data consumption. You get the same quality of video as watching a DVD, but use only 1/3 as much data (or, of course, NO data used when it’s a Binge On content provider!). That's not throttling. That's a huge benefit.
Again, this is both wrong and misleading. There is no optimization. Legere is lying. They are 100% slowing down the throughput on video when they sense it. The EFF's tests prove as much. Yes, for some video providers when they sense lower bandwidth, they will downgrade the resolution, but that's the video provider optimizing, not T-Mobile. T-Mobile is 100% throttling, and hoping that the video provider downgrades the video.
But in cases where that doesn't happen then it doesn't save any data at all (the EFF test confirmed that the full video file still comes through, just slower).
Also, note the play on words "You get the same quality of video as watching a DVD." At first you think he's saying that you get the same video quality overall, but he's not. He's saying as a DVD, at 480p, which is lower than the 1080p that many HD videos are offered at. And that's what many people are complaining about -- that they'd like to watch videos at the full 1080p, but T-Mobile made the choice that they can't do that unless they go through a convoluted process to turn this off.
Rather than respond to any of this, Legere then claims that "special interest groups" and Google are doing this.... "to get headlines."
So why are special interest groups -- and even Google! -- offended by this? Why are they trying to characterize this as a bad thing? I think they may be using Net Neutrality as a platform to get into the news.
Wait, what? Google -- the same Google that absolutely refused to say anything publicly at all about net neutrality for years during the debate suddenly wants to get into the news by jumping on the net neutrality bandwagon? Does Legere have any idea how ridiculous that sounds? And it's not like Google has a problem getting into the news. And what about EFF and others? Does he really think they need to get extra news coverage?
But note the facts here: at no point does Legere respond to the actual charges leveled against the company. He then concludes by yelling at everyone for daring to complain about this:
At T-Mobile we're giving you more video. More choice. And a powerful new choice in how you want your video delivered. What's not to love? We give customers more choices and these jerks are complaining, who the hell do they think they are? What gives them the right to dictate what my customers, or any wireless consumer can choose for themselves?
Nice. I'm part of the contingent complaining about this and I'm also a T-Mobile customer... and the CEO just called me a jerk while telling me he's fighting for his customers? Really now?
And again this whole statement is blatantly misleading. The "choice" was made by T-Mobile for all users, and getting out of it involves a convoluted process that most don't understand and where none of this was made clear to end users. Beyond violating the FCC's "no throttling" rule, I wonder if it also violates the FCC's transparency rules as well, in which they are required to be much more upfront about how the data is being treated.
Also, the statement above is from the video where we're described as "jerks," but in the written version it leaves out the "jerks" claim, but also includes the following bit mocking YouTube for letting users choose to change the resolution on videos:
YouTube complained about Binge On, yet at the same time they claim they provide choice to customers on the resolution of their video. So it's ok for THEM to give customers choice but not for US to give our customers a choice? Hmmm. I seriously don't get it.
But that's bullshit also. YouTube's choice option there is a clear pulldown on every video shown, so that a user just needs to click on the video their watching and set the resolution. T-Mobile's is a process that's not clear at all, with some users reporting they had to call in and get T-Mobile customer service to turn BingeOn off for their account. To compare the two situations is completely bonkers.
As far as I can tell, Legere either doesn't understand what his own company is doing technically, or knows and is purposely misrepresenting it. Neither of those look good and go against the entire "uncarrier" concept they keep pitching. I'd expect better as a T-Mobile customer than being told that I'm a "jerk" for pointing this out.
And it appears he's not the only one among senior execs at T-Mobile who still don't realize what their own company is doing. On Wednesday at a Citigroup conference, T-Mobile's Chief Operating Officer Mike Sievert
spewed some more nonsense suggesting he, too, has no idea what his own company is doing:
At a Citigroup investor conference Wednesday, T-Mobile executives shot back, saying YouTube’s stance is “absurd.” YouTube is owned by Alphabet Inc. “We are kind of dumbfounded, that a company like YouTube would think that adding this choice would somehow be a bad thing,” said T-Mobile Chief Operating Officer Mike Sievert. He said YouTube hasn’t “done the work yet to become part of the free service.”
Taken at face value, that comment makes no sense. If YouTube hasn't done the work yet to become a part of the free service than why the fuck is T-Mobile slowing down its videos? YouTube wasn't complaining about "adding this choice." YouTube was complaining about direct throttling of video content by T-Mobile, in clear violation of the FCC's prohibition on throttling.
Sievert and Legere both don't seem to understand (1) what YouTube and users are complaining about or (2) what his own company is doing. That's... troubling, given that these are the CEO and COO of the company. It really seems like T-Mobile execs might want to spend some time talking to its tech team to understand the fact that the only thing T-Mobile is doing to video is throttling it down to 1.5 Mbps, rather than any actual "optimization" before spewing more nonsense and calling their own customers "jerks." And, they might want to realize that their claim that this is all "bullshit" is actually complete bullshit. And that their bullshit may very well violate the FCC's rules.
Big companies often have a way of tap dancing around the truth. It's rarely lying, because they will choose their words carefully, in a manner that clearly misleads or distorts, but is not necessarily outright lying. T-Mobile, however, appears to be flat out lying. We recently wrote about the charges from YouTube that T-Mobile was throttling YouTube videos as part of its Binge On program that zero rates video on mobile phones so it doesn't count against data caps. We noted the problems with this program when it launched, but YouTube's claims take it even further.
Again, the program supposedly "optimizes" video streams down to a lower resolution, with the promise that partner videos will not count against T-Mobile's data caps. However, YouTube pointed out that it is not a partner and its videos were being throttled, in clear violation of the clear "no throttling" rules from the FCC. T-Mobile took exception to my post about it and demanded corrections and clarifications, making a few different claims. After investigating the claims, I can say (1) that we will not be clarifying or correcting anything in the original post and (2) more importantly, it appears that T-Mobile is flat out lying in some of its claims. It's not dancing around the truth, it is claiming things that are simply untrue. This is the key claim that T-Mobile's PR person made to me:
Using the term “throttle” is misleading. We aren’t slowing down YouTube or any other site. In fact, because video is optimized for mobile devices, streaming from these sites should be just as fast, if not faster than before. A better phrase is “mobile optimized” or “lower resolution.”
This is clearly not true. While you can have a semantic debate about whether "throttling" is "optimizing," the facts with T-Mobile are pretty clear: it is NOT optimizing YouTube videos at all. It is 100% throttling them.
When Binge On first launched without YouTube as a partner, many people asked why, and T-Mobile's VP of Engineering, Grant Castle, explained that the reason was because it could not identify YouTube videos, since nearly all YouTube traffic is encrypted. Thus, T-Mobile admitted that it had no way to "optimize" YouTube videos:
T-Mobile says the problem is technical. The software it is using to deliver streaming video at lower-definition quality needs to be able to identify the incoming traffic as being video as opposed to, say, photographs or email. It can’t always do that with YouTube.
Most YouTube traffic uses a protocol called HTTPS, which T-Mobile can detect, but some portions may be using a less-used protocol called UDP that the wireless company has more difficulty reading, according to Grant Castle, vice president of engineering at T-Mobile. That means the carrier isn’t certain about the format of some streams coming from YouTube.
“YouTube is a little difficult,” said Mr. Castle.
Thus, the only thing that T-Mobile can do for many YouTube encrypted streams is not to "optimize" it at all, but to flat out throttle it down to speeds around 1.5 mbps. You can see this in the tests done by Dualsim.us and the following video.
Remember how T-Mobile in their message to me said that the "optimized" videos should show up "just as fast, if not faster than before." Yeah, that's bullshit. Watch the video below (I start the video about 5 minutes in -- the first five minutes mostly just show that the two phones are both on T-Mobile's unlimited network with similar speed connections -- at which point the video comparison is shown):
As you can see, rather than "just as fast, if not faster than before," what you see for the throttled -- not "optimized" -- video is, instead, something much slower. That's because T-Mobile appears to downgrade the data flow from ~12 Mbps down to something like 1.4 or 1.5 Mbps.
That's absolutely 100% throttling. There is no "optimization" going on because T-Mobile cannot optimize those videos, since they're encrypted.
T-Mobile is lying. Flat out lying.
And... in a bit of perfect timing, just as I was completing this post, I see that EFF has published the results of its own technical tests of BingeOn, which also confirm that there is no "optimization" here -- and got T-Mobile to admit it was lying. It's purely throttling:
Our last finding is that T-Mobile’s video “optimization” doesn’t actually alter or enhance the video stream for delivery to a mobile device over a mobile network in any way. This means T-Mobile’s “optimization” consists entirely of throttling the video stream’s throughput down to 1.5Mbps. If the video is more than 480p and the server sending the video doesn’t have a way to reduce or adapt the bitrate of the video as it’s being streamed, the result is stuttering and uneven streaming—exactly the opposite of the experience T-Mobile claims their “optimization” will have.
Given the difference between what T-Mobile implies they do and what we found, we contacted them to get clarification. They confirmed that they don’t do any actual optimization of video streams other than reducing the bandwidth allocated to them (and relying on the provider to notice, and adapt the bitrate accordingly).
In fact, the EFF study compared a hash of the download to a version that was on the server and found the files were identical (i.e., no "optimization" -- just purely throttling). Again, this is the exact opposite of what T-Mobile's PR person told me in demanding a correction. T-Mobile is lying.
EFF also discovered that T-Mobile's earlier statement that it can't detect encrypted video is also misleading, as the company now claims it can:
The second major finding in our tests is that T-Mobile is throttling video downloads even when the filename and HTTP headers (specifically the Content-Type) indicate the file is not a video file. We asked T-Mobile if this means they are looking deeper than TCP and HTTP headers, and identifying video streams by inspecting the content of their customers’ communications, and they told us that they have solutions to detect video-specific protocols/patterns that do not involve the examination of actual content.
Finally, EFF realized that even if you're just downloading the video (i.e., not streaming, but downloading for later viewing), you STILL get throttled:
The first result of our test confirms that when Binge On is enabled, T-Mobile throttles all HTML5 video streams to around 1.5Mps, even when the phone is capable of downloading at higher speeds, and regardless of whether or not the video provider enrolled in Binge On. This is the case whether the video is being streamed or being downloaded—which means that T-Mobile is artificially reducing the download speeds of customers with Binge On enabled, even if they’re downloading the video to watch later. It also means that videos are being throttled even if they’re being watched or downloaded to another device via a tethered connection.
A separate claim in the email from T-Mobile is more of the "tap dancing around the truth" variety. And it's the claim that T-Mobile made it clear from the beginning that it would be doing this to non-partner videos as well. Here's what the T-Mobile rep said in the email to me:
This is how Binge On has always worked. We said it from the stage, in press materials, on the web, and in customer notifications last month, and media covered it last month, as well.
This is extremely misleading. Nearly everyone I've spoken to among people who follow these issues had no idea that the "throttling" (not optimization) applied to non-partner videos. I, as a T-Mobile customer, also never received any such notice (though the PR person then forwarded me the "notification" email, so I guess technically I have now received it). Either way, I went back to look at the press release and T-Mobile's own page about Binge-On to see about how clearly the company really revealed that it would also be throttling non-partner video. And the company was not at all clear about it.
In the press release (not surprisingly), T-Mobile focuses on all the Binge On partners. To realize that it's also throttling other videos you have to carefully parse some confusing text buried in the 8th paragraph of the press release, which most people won't even recognize. Here are paragraphs four through eight -- with the relevant mention bolded (without that, you might miss it):
With Binge On, video now streams free for viewers and subscribers of Crackle, Encore, ESPN, Fox Sports, Fox Sports Go, HBO Now, HBO Go, Hulu, MLB, Movieplex, NBC Sports, Netflix, Sling TV, Sling Box, SHOWTIME, STARZ, T-Mobile TV, Univision Deportes, Ustream, Vessel, Vevo, VUDU—with more streaming services on the way—without ever touching their 4G LTE data on Simple Choice plans with extra data. T-Mobile is also including Verizon’s Go90 and AT&T’s DirecTV streaming services in Binge On, so even the Duopoly’s video services stream without fear of overages.
Binge On is open to any streaming video provider who meets the technical requirements, which are available online at www.t-mobile.com/bingeon. And it’s completely free for video streaming providers to join.
“With Binge On, no one pays—not the customers, not the video streaming services—and everyone wins,” said Legere.
Powered by new technology built in to T-Mobile’s network, Binge On optimizes video for mobile screens, minimizing data consumption while still delivering DVD or better quality (e.g. 480p or better). That means more reliable streaming for services that stream free with Binge On, and for almost all other video, it means T-Mobile Simple Choice customers can watch up to three times more video from their data plan. And, as always, T-Mobile has put customers in total control with a switch to activate or deactivate Binge On for each line in their My T-Mobile account. Binge On is all about customer choice.
So basically all of the press release is talking about how Binge On is about "free" video from partners, and then in the second half of a sentence, buried in the middle of a paragraph (eight paragraphs into the press release) is a tidbit about how "for all other videos" the bandwidth is downgraded (what T-Mobile falsely calls "optimized"). That is the farthest thing from being clear about what is happening.
Similarly, on the website for Binge On itself, this is far from clear. Most of the page goes on and on and on about how "you can stream all you want for FREE without using your data." The clear implication is that video streaming doesn't count against a datacap. Lower down it has the following:
What basically no one is going to realize is that the "Watch 3X more video" claim on the right is talking about non-partner video. They don't actually say that. In fact, given how so much of the focus is on how the video doesn't count against the data cap at all, the whole "3x more video" bit is actually kind of confusing, because they're both saying you can watch "as much video as you want" on the left, and then on the right, saying you can now watch 3x as much video. They are not being clear at all about this.
It's only if you go all the way to the bottom of the page and click to expand the first "question" about Binge On that it finally explains what this means:
I mean, it's really, really buried. Here's a screenshot of the whole page, showing you where this information is buried (and, remember, this is showing it to you after I've clicked the little "+" button to show more). Most people will miss it entirely:
So, yeah: T-Mobile is flat out lying in claiming that it "optimizes" YouTube, and it's being ridiculously misleading in arguing that it was abundantly clear about how Binge On would impact non-partner videos.
Now, the big question: will the FCC actually do anything about this?
For quite some time now, we've pointed out that the whole zero rating issue was a way for broadband providers to conduct a stealth war on net neutrality -- first putting in place "restrictions" that they could then "lift" for partners, pretending it was a consumer friendly move. Last month, T-Mobile introduced Binge-on, it's second such attempt at zero rating. Its first, Music Freedom, exempted some streaming music services from its data caps. Binge-On focused on video, but had a few oddities. Like Music Freedom, Binge On would make "select" video streaming platforms exempt from the data cap -- but in order to do that, it would downgrade the quality of those streams to 480p, a lower resolution than most are used to these days. It was notable that neither YouTube nor Amazon Prime were included "partners" in the launch.
But... some people started noticing some problems: specifically, even those services that have not partnered with T-Mobile started seeing their own videos downgraded. The complaints started to flow on Reddit: someone noticed that Amazon-owned Twitch.tv's videos were suddenly being throttled. Others noticed YouTube videos being throttled. In both cases, those users were able to "fix" the problem by going into their account and turning off Binge On, but it still seemed troubling that T-Mobile had decided to automatically turn on Binge On for users, downgrading streaming video, even for video providers who had not agreed to such provisions.
Degrading video quality this way violates the FCC’s no-throttling part of the net neutrality rule, which forbids reducing the quality of an application or an entire class of applications. Even though T-Mobile and its brilliant CEO, John Legere, have done much to shake up the mobile industry in positive ways (they even won me over as a subscriber), this is one practice that the company should, and probably must, abandon.
As a purely legal matter, T-Mobile cannot easily defend its actions by arguing that this discrimination is good for its users. The FCC has already rejected that argument in advance by adopting a “bright-line” rule for all technical forms of discrimination absent some special technical justification. After hearing from millions of Americans throughout 2014, the FCC decided earlier this year that “the record overwhelmingly supports adopting rules and demonstrates that three specific practices invariably harm the open Internet,” and named one of them throttling.
YouTube, which is owned by Alphabet Inc., said T-Mobile is effectively throttling, or degrading, its traffic. “Reducing data charges can be good for users, but it doesn’t justify throttling all video services, especially without explicit user consent,” a YouTube spokesman said.
T-Mobile -- which has never been a fan of the new net neutrality rules, seems to think that because the service is "optional" that makes it okay. But that ignores two key things: (1) the FCC's rules say no throttling and (2) even if it is optional, T-Mobile turned it on for everyone, without telling users, and has not made it at all clear to users what's happening. That is, in every complaint you see online, you'll notice that people have no idea that this service has been turned on.
That makes it hard to square with the idea that this is for the benefit of T-Mobile subscribers. T-Mobile's only statement on this issue so far is also totally disingenuous:
In a statement, the No. 3 U.S. carrier by subscribers said its customers “love having free streaming video that never hits their data bucket” and like “both the quality of their video experience and the complete control they have.”
Again, this is T-Mobile exempting certain services from the data caps it set up itself. If customers love having streaming video that doesn't hit their data caps, then there are all sorts of ways to do that, which don't involve messing up the user experience overall, and without surreptitiously turning this system on in a way that messes up the plans of users.
Over the last few months, we've seen basically all of the major telcos look for ways to test the boundaries of the new net neutrality rules. At some point the FCC is going to have to smack them down or the tests are going to get more anti-consumer and more blatant. And, again, don't be fooled into thinking this is a "pro" consumer move in that it exempts data from the cap. That's like someone tackling you and then demanding to be called a nice guy for giving you a hand to get back up. The data caps are set by T-Mobile itself. The argument pretending that an exemption is somehow consumer friendly should immediately be spun around to point out that the caps themselves are then clearly anti-consumer.
Either way, one hopes that the FCC is actually paying attention, otherwise the telcos are going to keep moving to walk all over the new rules, with plans like this one, figuring out where and how they can throttle or prioritize traffic based on the providers' own needs, rather than based on what the internet allows.
The FCC's unwillingness to clearly ban zero rating as part of the net neutrality rules is starting to bite the agency -- and consumers -- squarely on the ass. Zero rating -- or the practice of letting some content bypass an ISPs' usage caps -- is seen by many to be a major anti-competitive problem, given the act of giving some companies cap exempt status puts everybody else at a disadvantage. That's why Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan have banned the practice.
But the FCC, in its infinite wisdom, decided that instead of banning zero rating, it would take a wait and see approach, addressing zero rating behavior on a case by case basis. And you can understand the logic; the FCC believes it's best to let ISPs experiment with what they insist are just creative new pricing models. The problem is one of precedent. Allow any form of zero rating, and you've already opened the door to the role of ISP as warden and gatekeeper. The other problem? The FCC's wait and see approach has so far involved doing absolutely nothing, even in the face of obvious anti-competitive behavior.
As a result, T-Mobile's now exempting both select video and audio streaming services from caps as part of its Music Freedom and Binge On programs. AT&T and Verizon's "Sponsored Data" programs charge companies a fee to have their content receive preferred, cap exempt status, putting any smaller companies that can't afford the fee at a disadvantage. Comcast has been slowly expanding its usage caps, then exempting its own content from them, giving it an unfair advantage against Netflix.
Though they vary in severity, all four of these companies are using their power as middlemen to potentially give some companies an advantage over others, the very thing our net neutrality rules were supposed to put an end to. Comcast's behavior is probably the most unapologetically anti-competitive of the bunch. Yet the FCC's response to most of these so far has ranged from total silence to outright praise.
Well, at least until last week, when the agency finally fired off letters to Comcast, AT&T and T-Mobile (pdf), asking them for more detail on zero rating plans that have been fully detailed for months (in AT&T's case, a few years). At an agency meeting last week FCC boss Tom Wheeler made it clear this was simply an inquiry, not an investigation, and the letter informs the companies the FCC's just looking to better understand what ISPs are doing (the agency was, apparently, in cryogenic storage all year):
"We want to ensure that we have all the facts to understand how this service relates to the Commission's goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources. We would also like to hear from you any additional perspectives you'd like to share about changes in the Internet ecosystem as a whole. To assist us in this review, we request that Comcast make available relevant technical and business personnel for discussions about the service with FCC staff, no later than January 15, 2016."
While the FCC moves at a glacial pace, Comcast has spent much of the year using broadband usage caps and zero rating for unfair market advantage. Again, Comcast is imposing unnecessary broadband caps in uncompetitive markets to hinder Internet video, then exempting its own streaming service from usage caps to penalize competitors like Netflix. So far, Comcast has argued this couldn't possibly be a net neutrality violation because the service spends significantly more time traveling over Comcast's managed IP infrastructure instead of the public Internet. It's a tap dance, and the FCC's response is timid and underwhelming.
If the FCC had clearly prohibited zero rating, it wouldn't have opened the door to Comcast's latest logical lambada. As we worried when the rules were crafted, leaving zero rating enforcement ambiguous opens the door to all manner of net neutrality violations -- just as long as an ISP is wearing the right tap dancing shoes.
If you were wondering whether or not the FCC would bless T-Mobile's new controversial zero rating plans, agency boss Tom Wheeler has given a pretty good indication of which way the agency is leaning. As covered previously, T-Mobile's been aggressively experimenting with zero rating -- first by exempting only the biggest music services from its usage caps -- then more recently by announcing Binge On. Binge On exempts video services from T-Mobile's wireless data caps, but "optimizes" those streams, limiting them to 480p.
T-Mobile tap danced around net neutrality rather cleverly, by making the option something users can disable, while stating that any company that wants to participate can join, for free. The problem remains one of precedent: by opening the doors to carriers as middle men in this fashion, you're fundamentally changing the way the internet works. Companies now need to seek special permission from ISPs to ensure their traffic is on a level playing field. A small streaming company in Cleveland, for example, may not even realize it's being discriminated against, or that it needs to contact T-Mobile to stop it.
The pitfalls are nuanced, and consumers have generally been oblivious to the bad precedent thanks to the lure of "free data" (that's not really free, since usage caps are entirely arbitrary constructs to begin with). And now we can add FCC boss Tom Wheeler to the list of folks who apparently think abandoning a truly open internet is just a nifty idea:
"Wheeler, in a press conference following the FCC's November meeting, appeared to endorse the Binge On offering, calling it pro-competitive and innovative. "It is clear in the Open Internet order that we are pro-competition and pro-innovation and clearly, this meets both of those criteria," he said. "It is highly innovative and highly competitive."
But apparently to appease the six of us that see the potential pitfalls here, the FCC boss then turned around and suggested the agency will be keeping an eye on the program:
"He said the FCC would keep an eye on Binge On per the general conduct standard in those new open Internet rules, which allows the FCC to look at such business models on a case-by-case basis.
That rule, he elaborated, says a carrier "should not unreasonably interfere with the access to someone who is trying to get to an edge provider and an edge provider who is trying to get to a consumer. So, what we are going to be doing is watching Binge On, keeping and eye on it, and measure it against the general conduct rule."
Again, T-Mobile's program may not be the most offensive net neutrality violation ever seen, but the precedent remains horrible. While T-Mobile may be more consumer friendly than other carriers, the simple act of allowing zero rating opens the door to carriers like AT&T and Verizon that are decidedly less so. Meanwhile, Wheeler may be replaced by an FCC boss with an even more flexible interpretation of "innovation" (assuming they're not busy trying to dismantle the rules entirely). This potential for preferential discrimination is why Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan all moved to prohibit zero rating in some fashion.
The FCC did e-mail me to note that the "Commission staff is working to make sure it understands the new offering," but Wheeler's comments (and previous FCC statements) make it pretty clear that the agency sees usage caps and zero rating as little more than creative pricing. In other words, the agency's telling ISPs: violate net neutrality, just be creative about it. As T-Mobile's program took root, the magenta-hued character that is T-Mobile CEO John Legere was quick to applaud himself:
Last year we noted that for being such a supposedly cool CEO, T-Mobile's John Legere seemed utterly clueless on the subject of net neutrality. Not only did the CEO claim that Title II and new net neutrality rules would "kill innovation" (tip: that didn't happen), he seemed totally oblivious to the bad precedent set by the company's zero rating efforts. Those efforts began with T-Mobile's decision to let some music services bypass user usage caps, which as we've discussed at great length puts smaller companies and non-profits at a distinct disadvantage.
But since our regulators (and much of the press and public) seem clueless to the harm of zero rating so far, T-Mobile has decided to expand these efforts. Last week the company started cap-exempting video services, and now the company has announced it's bringing zero rating to the company's prepaid wireless brand (MetroPCS) as well. Now the company's prepaid and postpaid (monthly billed) customers both will find that thirty-three of the biggest music stream services no longer count against their usage caps (yeah, sorry, small independent radio streaming stations too little to get on T-Mobile's whitelisted radar).
As usual, the move was framed as a huge boon to consumers:
“Once again we are setting MetroPCS apart from the rest of the pack in ways that no one else will,” said John Legere, president and CEO of T-Mobile US. “MetroPCS is the #1 brand in prepaid because we keep giving customers more of what they want, and today that means adding Music Unlimited and Data Maximizer to the list! Their data will last longer than ever before without ridiculous penalty fees or trickery!"
And like regulators, most of the telecom beat covering T-Mobile has been oblivious to the bad precedent set. They don't quite yet understand that letting a wireless carrier suddenly decide what traffic gets whitelisted from already-arbitrary usage restrictions sets the stage for a total upheaval of how the Internet works now. They also don't understand that if it's ok for T-Mobile to do this, it's ok for a company like AT&T to do something similar -- and AT&T's version is going to be notably worse. The Los Angeles Times, for example, struggles to see where the problem lies:
"Besides, there's nothing in the FCC's neutrality rules that bars data caps, which enable carriers to segment the market and charge higher prices to those who put a higher value on bandwidth. Binge On represents another reduction in the pain caused by data caps, which seems like an unalloyed good thing for consumers."
But you're not reducing a "pain point" by creating an arbitrary data cap, then letting some content bypass that cap -- you're just getting in the way of a healthy Internet ecosystem. And just because the FCC lacked the foresight to prohibit zero rating in our net neutrality rules (unlike Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan, which all bar zero rating), that doesn't mean this isn't a potentially horrible idea that's going to change the face of the Internet. It's very clear that the perils of zero rating are something we're eager to experience first hand here in the States, applauding our own "great fortune" all the way.
As rumored, T-Mobile has unveiled its latest attempt to kick the nation's wireless duopoly in the shins: exempting video services from the company's wireless broadband usage caps. According to the company's latest press release, T-Mobile customers will soon be able to stream video from 24 participating partners without it counting against user usage allotments. The initial list of participating companies includes most of the usual suspects, with T-Mobile stating any notable omissions (like YouTube and Amazon Prime Streaming) will be added in time.
It's an obvious extension of the company's existing Music Freedom effort, which makes select music services cap exempt. That effort caused a bit of a net neutrality kerfuffle at launch, given that initially only the most popular music services (dictated by T-Mobile customer votes) were cap exempt. As is the problem with most zero rating programs, that immediately creates an unlevel playing field for smaller nonprofits and independents that aren't big enough to get onto T-Mobile's radar and be whitelisted.
But with Binge On, T-Mobile was obviously more prepared for the inevitable net neutrality criticism that somehow caught the company off guard last time.
This is "not a net neutrality problem,” T-Mobile US CEO John Legere was quick to proclaim during the announcement. "It’s free, the providers don’t pay, the customers don't pay. Most importantly...you can shut it off, it’s complete customer choice," he added. Users who enable the service enjoy "optimized" 480p video streams that don't count against their caps. Turn it off, and users will view standard, higher-resolution streams that will erode their usage allotments. Legere also promised that any company "can meet our technical criteria" (said criteria hasn't yet been specified) can participate.
As far as zero rated programs go, it's not an apparently awful implementation, and it's going to appeal to a lot of customers. The problem continues to be precedent. The simple act of accepting wireless carriers as middlemen fit to determine what should or shouldn't be allowed past arbitrary usage restrictions paves the way for a very uncertain future, as the Verge rather hysterically worries:
"Binge On is bad because it gives T-Mobile too much power. It’s really that simple. And yes, it’s bad for net neutrality. If net neutrality has a core idea, it’s that regular people ought to be in charge of the internet — especially since the internet is mostly just people. That means companies like T-Mobile shouldn’t be picking winners and losers, even if customers appear to be winning in the short term. And there are definitely going to be losers. Legere insists that anybody who wants to be a part of Binge On can be, as long as they meet T-Mobile’s technical specifications. It’s not clear what those specifications are yet, though Legere used words like "optimized video" and "DVD quality or better." But that just sounds a lot like another type of managed network: cable television."
"T-Mobile wants to suggest it’s saving customers by exempting video from its data caps. But we have to remember that T-Mobile imposed these caps in the first place. It’s a cheap sales trick: First you fabricate a problem for customers; then you make that problem go away and act like you’ve done them a huge favor."
And not everybody is as consumer-friendly and disruptive as T-Mobile. Allowing T-Mobile to inject itself into the data stream in this fashion encourages other wireless carriers to do so, and you can be damn certain that AT&T and Verizon's vision of zero rating will be notably more ham-fisted and problematic. Even if you admire T-Mobile's particular implementation of zero rating, small independents still have to reach out for T-Mobile's permission to be placed on the same, level playing field as their larger counterparts. Many may not even realize they're in such a position.
You'll probably see countless reports suggesting that T-Mobile's move is sure to "invite scrutiny by the FCC," but that's highly unlikely. T-Mobile's done a fantastic job of selling a potentially problematic precedent as consumer empowerment. Meanwhile, the FCC has made it abundantly clear it sees usage caps and zero rating as creative pricing experimentation, in the process opening the door wide to a lopsided vision of the Internet many will naively be cheering for.