For years now Verizon has made it clear that it no longer wants to be in the fixed-line broadband business. Despite countless billions in taxpayer subsidies and numerous unfinished obligations, the company has all-but frozen serious fiber deployments. It has also been either selling off unwanted DSL customers to smaller, ill-equipped telcos (which which almost always ends poorly for everybody except Verizon accountants and lawyers) or has quite literally tried to drive unwanted users away with both rate hikes and apathy.
Instead, Verizon executives decided to try and transform the stodgy old telco into a sexy new Millennial-focused advertising juggernaut. So far that has involved launching the company's Millennial-targeted "Go90" streaming video service, spending $4.4 billion on acquiring AOL, trying to acquire the drifting wreckage that is Yahoo, and developing controversial stealth ad tracking technology to build covert profiles of customer behavior as they wander around the Internet.
Despite the company heavily marketing Go90, zero rating the service so it doesn't count against usage caps, and even giving away data to users that try the service, it has seen extremely limited adoption among Verizon's target demographic. Verizon has refused to release subscriber numbers for the service, and the Go90 app is slowly falling down both the Apple App Store and Google Play rankings. Things have been so underwhelming, Verizon CEO Lowell McAdam was forced to admit to attendees of an investor conference this week that the company may have "over-hyped" the platform:
"It did get a little bit overhyped, and we contributed to that to some extent," McAdam said in a keynote appearance at the 44th Annual J.P. Morgan Conference. McAdam explained that Verizon's strength is in building networks, not necessarily developing popular content. "It's not exactly our strong suit," McAdam conceded.
Granted everybody not at Verizon knew that the company's attempt to magically make an old telco sexy for millennials would be a hard sell, especially given Verizon's long history of trying and failing to be content innovators. The company has long tried and failed when leaning outside of its core competency, whether that's operating its own app store, running a streaming venture with Red Box, or briefly operating a news website where authors were prohibited from talking about things like surveillance or net neutrality. Phone companies, after a generation of regulatory capture and "yes men" boardroom culture -- simply aren't genetically built for real disruption and innovation outside their core competency, no matter how many executives seem to believe otherwise.
McAdam then tried to walk back his comments a little, and tried to argue that Go90 isn't a failure, it's just a vision that's going to take a lot of time, and a lot of money (which won't be spent on networks), to execute:
"We've seen enough success to make us excited about continuing to work it... "Go90 is in a good spot from our perspective, we're going to continue to pursue it. But our expectations are realistic."
As a writer I generally love telecom investor conferences for the simple fact that for whatever reason, phone and cable executives still haven't figured out that the public can hear what's being said at them. What usually happens is a telecom executive will say something uncharacteristically candid, then the company's marketing department will jump in to try and spin the comments a few weeks later. As such it shouldn't be long before Verizon unveils a new marketing barrage that spins McAdam's comments and claims Verizon's quest to become sexy in the eyes of Millennials is going better than ever.
Back in 2012, Netflix and Disney struck a deal wherein Netflix would be the exclusive online provider of Disney content starting in 2016. And while we knew that the deal had been struck, it was only this week that Netflix announced on its blog that the exclusive arrangement would formally begin in September. As of September 1, if you want to stream the latest Disney (and by proxy Marvel, Lucasfilm and Pixar) films -- you need to do it via Netflix.
Given the popularity of the Marvel films and the now-annual release of new "Star Wars" titles, that deal has become bigger and more important than ever, making it a pretty large coup for Netflix. Especially if you consider that Disney is co-owner of Hulu, which is planning to dramatically scale up its own subscription streaming video service later this year or early next. In fact, while Hulu for years was little more than an uninteresting ad for traditional cable, data suggests that Hulu's catalog is now much larger, thanks in large part to Netflix's tight focus on original content.
And while this is good news if you already subscribe to Netflix, this ongoing quest to lock down content in exclusive arrangements has a notable downside as the practice expands. As Hulu, Netflix, and Amazon have tried to each lock down their own exclusives, finding your favorite movie or TV series has become a frustrating game of hunting and pecking to ferret out which provider has the exclusive rights. It's also becoming increasingly confusing for consumers to understand when these deals expire; something that's not effectively communicated by most streaming companies.
And, ironically, while many streaming video customers cut the cable cord due to high prices, exclusive arrangements are now forcing those customers to pay for countless streaming services if they actually want to access all of their favorite shows and movies. There's a certain danger in replacing the cable industry's long-standing walled gardens with newer, different walled gardens, and it's pretty clear most of these companies either don't see the potential pitfalls or, in a rush for eyeballs, just don't care.
And as broadcasters increasingly realize they can cut out the middlemen and launch their own streaming services, it seems inevitable that the exclusivity wars will only get worse. For example, if you want to watch the new "Star Trek" TV series from CBS when it launches in January 2017, you'll need to subscribe to CBS's $7 a month, All Access streaming platform. There's likely going to be a lot more where that came from, especially as Comcast takes a bigger role in managing Hulu (NBC Universal merger conditions preventing it from fiddling with Hulu to prevent anti-competitive shenanigans expire next year).
So while the streaming industry and broadcasters are intent on following the exclusivity concept deep down the rabbit hole, few if any seem to notice that while these kinds of exclusive deals may be good for one company over the short term, they're not going to be great for the broader streaming industry over the long haul. There's a lot of potential here to fracture content availability, confuse paying customers, and drive frustrated customers back to piracy after all of the work done to get them on legitimate platforms in the first place.
We've noted a few times how interstate inmate calling service (ICS) companies have a disturbingly cozy relationship with government, striking (technically buying) monopoly deals that let them charge inmate families $14 per minute. Worse, some ICS companies like Securus Technologies have been under fire for helping the government spy on privileged inmate attorney communications, information that was only revealed after Securus was hacked late last year. Given the apathy for prison inmates and their families ("Iff'n ya don't like high prices, don't go to prison son!") reform on this front has been glacial at best.
As such, ripping off inmate families and delivering sub-par services continues unabated. As many prisons eliminate personal visits, these ICS firms have expanded revenues by pretending to offer next-generation teleconferencing services. But while slightly more economical ($10 for 20 minutes), apparently companies like Securus with no competitors, a captive audience, and no repercussions for sloppy technology haven't quite figured out how to make this whole video chat thing work yet. As a result, inmates who use the services say their experiences are repeatedly abysmal:
"Johnson logged into the Securus Technologies website — a Skype-like communication system used by the Travis County jail — on her PC laptop. But the video player didn't have the latest version of Java. When Johnson installed it, the system insisted she had not. So Johnson tried another laptop — a MacBook this time. Java was working this time, Flash was not.
Thinking the browser might be the problem, Johnson tried launching the video player in Chrome, then switched to Safari before giving up and using the Securus Android app on her phone.
Finally, Coleman's face appeared on screen — barely. For the entire call, a glitch in the system caused Coleman's image to look like a tangle of window blinds. Johnson wanted to talk to Coleman about her case, but through most of the call, she simply repeated, "Hello — can you hear me now?" Johnson was charged $10 for the video visit, even after cutting it a few minutes short of the 20-minute maximum."
In short, Securus is the Comcast of the industrial incarceration sector, and as a result customer support and service is about what you'd expect. 600 prisons in 46 states now have video visitation, and more prisons are doing away with in site visitations monthly, creating yet more revenue opportunities for ICS outfits. Reformers have been arguing that cutting off in-person visitation increases on-site violence by frustrated inmates, and hindering an inmate's ability to maintain outside connections (kind of hard when your wife and child look like pixelated Godzilla) increases the risk of repeat incarceration:
"County officials across the country claim video visitation is good for security. When Renaud got ahold of prison records, they showed that incidences of inmate-on-inmate violence, disciplinary infractions and possession of contraband all rose after Travis County did away with in-person visitation. Because visitation is so new, these statistics are the earliest indication that the pro-security pitch for video visitation is all snake oil.
The past decade in research shows consistently (pdf) that maintaining the relationships the incarcerated will inevitably return to for support once they're released is a powerful agent in keeping them from repeat offenses. One study of over 16,000 incarcerated people found that any visitation at all, even just once, reduced the risk of recidivism by 13% for felony reconvictions."
The problem is that the dysfunction of prison telecom goes bone deep, and reform efforts remain superficial at best. After decades of inaction, the FCC recently tried to impose new price caps of twenty-two cents per minute on ICS companies, but those rules are on hold thanks to a lawsuit from prison telecom operators like Securus that claim prisons face riots if companies can't keep charging consistent rates.
But the core problem remains that such companies get to pay "concession fees" or "site commissions" (read: kickbacks) to prisons for monopoly control over prison inmate communications services. Prisons are paid $460 million annually in such concession fees, and Los Angeles makes $15 million annually off of such fees alone. Obviously that kind of cash quickly kills any attempt at real reform, so not unlike the outside world, prison telecom services remain an ouroboros of profitable dysfunction; a government-sanctioned monopoly with very real human costs, one nobody in the supply chain wants to even examine, much less actually fix.
While we have written quite a bit about major professional sports leagues marching towards expanded streaming options for viewers, and while each league is making progress in that direction, not all of the leagues are equal in how they're going about it. The NHL has been by far the least progressive in this arena, which is somewhat strange given how much more progressive it has been on other issues of modernity. On streaming, however, there seems to be some flip-flopping, with the league banning the use of services like Periscope by journalists, but then seeking to piggyback on baseball's fantastic MLB Advanced Media product to get better streaming to its viewers. The entire point of increased streaming options is to get the product out to as many people as possible, grow the fanbase, and ultimately rake in more money via increased viewership.
Which is what makes is supremely odd to see the NHL fail so hard recently with its streaming product and react to that failure by menacing anyone who might try to route around it. If you weren't already aware, a recent upgrade to the league's NHL.tv product appears to have instituted a refreshed round of blackout rules for games at the exact time when other leagues are attempting to minimize the impact of blackouts. Per Deadspin:
We’ve been getting tips all week from frustrated NHL.tv customers who installed NHL.tv’s new upgrade this week, only to see the entire service dissolve into an malfunctioning mess of blackouts. At pretty much any time when games are on, the @NHLTVSupport account’s mentions are full of hordes of complainers and angry people trying fruitlessly to be able to watch games on the platform they paid $160 for.
In addition to the surprise blackouts suddenly rearing their ugly heads, it appears that NHL.tv is having trouble working across certain devices for whatever reason. Chromebooks in particular appear to be affected, but other devices render the stream into a pixelated hell-scape. This is particularly problematic for a sport that relies so heavily on high-res viewing in order to follow the puck and the action in an arena where color differentiation is much more limited than with other sports.
But adding insult to injury is the all-caps threat clause the NHL slid into the update.
IF YOU CIRCUMVENT OR ATTEMPT TO CIRCUMVENT ANY BLACKOUT RESTRICTION OR OTHER USE RESTRICTION: YOUR SUBSCRIPTION WILL BE SUBJECT TO IMMEDIATE TERMINATION AND A CHARGE OF ONE HUNDRED DOLLARS ($100.00) FOR EARLY TERMINATION WILL BE APPLIED TO YOUR CREDIT OR DEBIT CARD; YOU MAY BE SUBJECT TO LEGAL ACTION; AND THE NHL RESERVES THE RIGHT TO REPORT SUCH MISCONDUCT TO APPROPRIATE LAW ENFORCEMENT AUTHORITIES.
Lovely. So a product that doesn't appear to work as advertised, served up to a customer base that appears to have been ill-informed about the blackout rules subsequently put in place for the product, is now on notice that doing anything to address this beyond waiting for the NHL to get their shit together will lose their subscription, be charged a fine, and be reported to the authorities for legal action.
Not exactly the best way to win over existing and new customers, NHL, particularly given that you're the league that can least afford to lose any fans.
At the time of the release, city attorneys had this to say.
“With respect to the release of videos of police incidents, the City of Chicago is working to find the right balance between the public’s interest in disclosure and the importance of protecting the integrity of investigations and the judicial process,” Stephen R. Patton, the head of Chicago’s Law Department, said Wednesday as the city announced it would no longer fight to prevent the release. “In this case, the city sought a protective order consistent with its decades-long policy. We recognize the policy needs to be updated, and while we await guidance from the Task Force on Police Accountability, we are working to be as transparent as possible.”
These are certainly the right words to be saying after the Laquan McDonald debacle. The city sat on dashcam footage of the shooting for over a year before a judge forced it out of its hands. The video showed a Chicago cop firing 16 shots at McDonald as he walked away from the officer. Transparency isn't exactly the Chicago way and Mayor Rahm Emanuel has been accused of burying the video to better suit his re-election campaign.
But let's not applaud the new transparency supposedly on display here. The city's legal department would likely have kept this video buried as well if it weren't for extenuating circumstances. And by "extenuating circumstances," I mean "misconduct that led to the resignation of two city attorneys."
[W]hether Mosqueda and Sierra acted with excessive force depends, in large part, on what [Officer] Mosqueda heard on the police-car radio that night. Not surprisingly, after they sued, Plaintiffs asked for the recording of what Mosqueda claimed to have heard over the radio, as well as any documents related to the recording. A recording was available. But Plaintiffs did not get it. Documents identifying the location of the recording were also available. But Plaintiffs did not get those either. The discovery responses that they did get led them to believe that no recording of the call or documents were available. From that, Plaintiffs reasonably concluded that Mosqueda was lying—that is, he actually had heard nothing, and the officers executed an overly aggressive traffic stop for their own reasons or no reason at all.
Plaintiffs prepared to present that theory at the trial, as well as the theory that the radio call was an excuse concocted after the shooting with the help of other officers, and the trial began with that presentation. But on the fourth day of trial, it was revealed that there was an OEMC record showing the potential availability of a recording of the call the officers heard that night, and soon afterwards, it was revealed that the recording was in fact still available. The actual recording did not mention that the Aurora had a gun or that the car was wanted for a shooting, but it did describe an Aurora similar to the one Pinex was driving. Plaintiffs' Counsel scrambled to adjust their trial presentation to account for the undisclosed recording, both to defend against it and to use it to support their version, but the jury ultimately found in favor of Mosqueda and Sierra.
The decision points out that this was not an error. The prosecution deliberately withheld the recording it had obtained until the case was already underway. City attorney Jordan Marsh admitted -- prior to jury deliberations -- that he had misled the court as to when he had first obtained this recording.
Judge, as I am thinking about this issue with the CD and Sergeant Lamperis, I represented to the Court yesterday that it was a couple of days ago that I first learned about the CD. I spoke with Jill Maderak at my office — I remember that I was sitting in my office when I did it — I was going over the event queries, and I have to — I have to believe that was sometime last week, because I don't think I would be speaking with her after Court. So it may very well — and certainly, I have talked to her and Ms. Dunaj about the CD multiple times, it may have been that I learned about the CD Thursday or Friday of last week. I don't know. I just wanted to let the Court know that — I may have been mistaken yesterday when it came up that — the first time I heard about it was Tuesday, or I said a couple days before, because I do have that recollection of talking with Jill Maderak in the office. So it may have been prior to trial.
This led directly to the court throwing everything out, awarding the plaintiffs a new trial and compensation for the legal fees -- not just for this lawsuit, but for the new trial still to come.
Mistakes do happen in discovery. Most often, the mistakes are innocent and no fault can be fairly assigned to the lawyer. But when a lawyer acts unreasonably and the other side does not get all the evidence to which it is entitled, then a remedy must follow to prevent the lawyer's negligence from unfairly harming the opponent. Even worse, when a lawyer crosses the line into intentional wrongdoing, then more severe punishment is warranted, because our system of justice depends on the honesty and good faith of lawyers to abide by the rules of discovery. For the reasons detailed below, the Court finds that City Law Department attorney Tom Aumann acted unreasonably during discovery. Worse, based on the record evidence, the Court must conclude that City Law Department attorney Jordan Marsh intentionally concealed the existence of the OEMC record that would have led to the discovery of the Zone 6 Audio before the trial.
Transparency may eventually take hold in Chicago, but it won't be anytime soon. The city has a habit of burying recordings, even to the point that it keeps them hidden from opposing counsel. The city and local police unions have made efforts to ensure the Chicago PD's dirty past stays hidden as well. The city is being forced towards transparency, but its efforts in this area are still mostly borne of political expedience -- whether in service to Mayor Emanuel's falling stock or due to the malfeasance of its own counsel.
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 history of anti-piracy activities by the legacy entertainment and software industries always seems to focus on the mistaken idea that if only the public were "more educated" piracy would magically go away. That's never been true. In fact, nearly every attempt at an education campaign hasn't just failed to work, it's often actively backfired and been mocked and parodied. And yet, if you talk to politicians and industry folks, they still seem to think that "more education" will magically work next time. One can only wonder what the hell the geniuses at the Software Alliance (the BSA -- which used to be the "Business Software Alliance" but has dropped the "Business" part, but not the "B" in its name) were thinking when they decided to "settle" with a guy who apparently uploaded some Microsoft software in the Czech Republic. The terms of the settlement required him to take part in a "professionally produced" anti-piracy video and that the video needed to get 200,000 views on YouTube or he might face having to pay damages in court.
The BSA is a well-known front for Microsoft, and has a long history of rather ridiculous claims about "piracy," so I guess it's little surprise that it's now engaged in out and out propaganda, but done so badly that it's turned the whole thing into a laughingstock. The whole "compelled speech" aspect of the settlement, including the requirement to get so many views, strikes basically everyone as ridiculous and stupid. Press attention has of course propelled the video to well over 200,000 thousand views at this point, and many of the YouTube comments are completely mocking the campaign -- and noting that they're watching the video to help the accused be let off the hook. The video is in Czech, but even so it's hilarious. It has the same sort of ominous production values as the old "You wouldn't download a car!" ads that have been mocked for years as well:
It really highlights just how out of touch folks at the BSA are, in that anyone actually thought this kind of thing would help it in any way, rather than making it a continued laughingstock.
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.