We’ve noted for a long while that Americans pay some of the highest prices in the developed world for mobile data. But U.S. network quality doesn’t really make that a great value equation. U.S. 5G networks are notoriously slower than 5G networks in many other countries, and studies have found U.S. video streaming over wireless also lags behind the rest of the world.
Last week, JD Power and Associates released a new study showing that US wireless network problems are on the rise, with slow loading times or network errors the most frequent complaints:
As wireless customers continue to increase their phone and device usage, more problems in network quality are being cited and the perception of network quality is declining. The most common reported problem is slow or failure to load content, according to the J.D. Power 2022 U.S. Wireless Network Quality Performance StudySM—Volume 2, released today.
On the plus side, these problems are less frequent when 5G is present. But again, U.S. 5G is far slower than overseas due to an initial dearth of essential middle-band spectrum. And, like 4G, still isn’t uniformly available if you happen to live in any of America’s significant rural nooks and crannies.
As with most problems with U.S. telecom, the problem is multifold. Poor regulatory policymaking meant middle-band spectrum didn’t get to market quickly enough. Poor regulatory oversight meant regulators don’t punish companies meaningfully for poor performance, price gouging, or terrible customer service. And consolidation weakened competition, reducing organic market pressure to do better.
It’s usually the same story. And it’s usually blamed by captured policymakers on foreboding US geography, or not giving carriers enough subsidies, tax breaks, or regulatory favors. And while the U.S. wireless and fixed broadband segments will be the very first to try and claim US telecom services offer an incredible value and top-shelf performance, that illusion is generally shattered once you actually travel the planet.
On Monday, the FTC announced that it was issuing what’s known as 6(b) orders to nine social media and video streaming companies, demanding a fairly massive amount of information regarding their data collection and usage policies, as well as their advertising practices. To me, this is a huge missed opportunity. If the FTC is truly trying to gain a better understanding of data collection, privacy, and advertising practices, perhaps to better inform Congress on how to, say, pass a truly comprehensive (and useful?!?) privacy legislation, then there are ways to do that. But this… is not that. This looks like a weird fishing expedition for a ton of unrelated information, from an odd selection of nine companies, many of whom are in a very different business than the others. It leaves me quite perplexed.
First, let’s look at the odd selection of companies. The letters are going to:
Amazon (apparently including Twitch)
Bytedance (TikTok)
Discord
Facebook
Reddit
Snap
Twitter
WhatsApp (owned by Facebook)
YouTube
Okay, so they’ve definitely focused on many of the big players, but they’ve also left out a ton as well. Where’s LinkedIn? Or Github? Or WeChat? Or Pinterest? Or Quora? They list Facebook and Whatsapp… but not Instagram? Where’s Zoom? Now it’s true that sometimes the FTC will randomly sample a bunch of companies in a particular industry to get a look at certain practices — but for that to make sense, you want to sample from a set of similarly situated companies. This is… not that.
For the smaller companies on the list, such as Reddit and Discord, the FTC demanding they file a ton of paperwork in a very short time frame is going to mean a tremendous waste of time.
The second concern is the broad nature of the requests. The “sample order” is massive. There are 53 separate requests, many with multiple sub-parts. They’re not just asking for specific information, but rather going on what appears to be an incredibly broad fishing expedition for information about a wide variety of practices at all of these companies — including broad demands for future strategies and plans. For example, beyond just information on the number of users, it demands all documents relating to “business strategies or plans,” “research and development efforts,” “strategies or plans to reduce costs, improve products or services…” It also seems to be demanding all “presentations to management committees, executive committees, and boards of directors.”
That feels like a fishing expedition, rather than an attempt to actually understand data collection and usage practices.
There are categories of information included here that I think it would be useful for the FTC to understand. But there’s just so much information requested that it seems likely to bury the useful information.
The one FTC Commissioner who dissented from this effort, Noah Joshua Phillips, raises important questions in his dissent:
Effective 6(b) orders look carefully at business practices in which companies engage in a manner
designed to elicit information, understand it, and then present it to the public in way that is
usable and can form a basis for sound public policy.
The first step is to select a group of recipients that will permit such examination, usually a group
of firms engaged in conduct that can be compared. But the logic behind the choice of recipients
here is not clear at all. The 6(b) orders target nine entities: Facebook, WhatsApp, Snap, Twitter,
YouTube, ByteDance, Twitch, Reddit, and Discord. These are different companies, some of
which have strikingly different business models. And the orders omit other companies engaged
in business practices similar to recipients, for example, Apple, Gab, GroupMe, LinkedIn, Parler,
Rumble, and Tumblr, not to mention other firms the data practices of which have drawn
significant government concern, like WeChat. The only plausible benefit to drawing the lines
the Commission has is targeting a number of high profile companies and, by limiting the number
to nine, avoiding the review process required under the Paperwork Reduction Act, which is not
triggered if fewer than ten entities are subject to requests.
Phillips calls out the same broad demands I raised above regarding business plans, R&D and presentations, noting:
Such a request would be suited to an antitrust investigation. But as part of an inquiry ostensibly
aimed at consumer privacy practices, it amounts to invasive government overreach. And that is
just one of the order?s 50-plus specifications.
And, finally, he highlights how this effort is just demanding way too much information to be of use for a comprehensive policy recommendation:
The biggest problem is that today?s 6(b) orders simply cover too many topics to make them
likely to result in the production of comparable, usable information?yet another feature proper
oversight and public comment could have flagged. Rather than a carefully calibrated set of
specifications designed to elicit information that the agency could digest and analyze as a basis
for informing itself, Congress, stakeholders, and the public, these 6(b) orders instead are
sprawling and scattershot. Their over 50 specifications, most with numerous and detailed
subparts, address topics including, but not limited to: advertising (reach, revenue, costs, and
number and type); consumer data (collection, use, storage, disclosure, and deletion); as noted
above, all strategic, financial, and research plans; algorithms and data analytics; user engagement
and content moderation; demographic information; relationships with other services; and
children and teens (policies, practices, and procedures).
Recipients of 6(b) orders typically negotiate to limit their productions, to tailor them in light of
their specific business models and business practices. Perhaps the Commission will push back on
attempts to do so, devoting additional lawyers to litigating the orders and having a federal judge
oversee them, rather than OIRA. Or negotiation may reduce the burdens. But if that happens,
each recipient will be responding to a different set of negotiated specifications. That certain of
the companies in question have very different business models makes this even more likely. The
end result of that is, say, the agency learning a lot about one recipient?s advertising practices, but
not as much about its algorithms. For another recipient, the agency might receive information
about privacy practices but very little about its plans to expand. Each of the nine recipients will
produce differing, if any, amounts of information to each of the 50-plus specifications.
I actually think it would be a good thing for the FTC to better understand how these companies work and their practices. I think it could be useful for them to gain such an understanding, and then make recommendations on a comprehensive federal privacy law. But I don’t see how this fishing expedition does any of that. Instead, it just asks for basically everything and the kitchen sink from a somewhat random selection of companies, some of whom will have difficulty producing all of this information.
Summary: The ability to instantly upload recordings and stream live video has made content moderation much more difficult. Uploads to YouTube have surpassed 500 hours of content every minute (as of May 2019), making any form of moderation inadequate.
The same goes for Twitter and Facebook. Facebook’s user base exceeds two billion worldwide. Over 500 million tweets are posted to Twitter every day (as of May 2020). Algorithms and human moderators are incapable of catching everything that violates terms of service.
Both platforms removed the videos and deactivated Flanagan’s accounts. Twitter’s response took only minutes. But the spread of the videos had already begun, leaving moderators to try to track down duplicates before they could be seen and duplicated yet again. Many of these ended up on YouTube, where moderation efforts to contain the spread still left several reuploads intact. This was enough to instigate an FTC complaint against Google, filed by the father of the journalist killed by Flanagan. Google responded by stating it was still removing every copy of the videos it could locate, using a combination of AI and human moderation.
Users of Facebook and Twitter raised a novel complaint in the wake of the shooting, demanding “autoplay” be opt in — rather than the default setting — to prevent them from inadvertently viewing disturbing content.
Moderating content as it is created continues to pose challenges for Facebook, Twitter, and YouTube — all of which allow live-streaming.
Decisions to be made by social media platforms:
What efforts are being put in place to better handle moderation of streaming content?
What efforts — AI or otherwise — are being deployed to potentially prevent the streaming of criminal acts? Which ones should we adopt?
Once notified of objectionable content, how quickly should we respond?
Are there different types of content that require different procedures for responding rapidly?
What is the internal process for making moderation decisions on breaking news over streaming?
While the benefits of auto-playing content are clear for social media platforms, is making this the default option a responsible decision — not just for potentially-objectionable content but for users who may be using limited mobile data?
Questions and policy implications to consider:
Given increasing Congressional pressure to moderate content (and similar pressure from other governments around the world), are platforms willing to “over-block” content to demonstrate their compliance with these competing demands? If so, will users seek out other services if their content is mistakenly blocked or deleted?
If objectionable content is the source for additional news reporting or is of public interest (like depictions of violence against protesters, etc.), do these concerns override moderation decisions based on terms of service agreements?
Does the immediate removal of criminal evidence from public view hamper criminal investigations?
Are all criminal acts of violence considered violations of content guidelines? What if the crime is being committed by government agents or law enforcement officers? What if the video is of a criminal act being performed by someone other than the person filming it?
Resolution: All three platforms have made efforts to engage in faster, more accurate moderation of content. Live-streaming presents new challenges for all three platforms, which are being met with varying degrees of success. These three platforms are dealing with millions of uploads every day, ensuring objectionable content will still slip through and be seen by hundreds, if not thousands, of users before it can be targeted and taken down.
Content like this is a clear violation of terms of service agreements, making removal — once notified and located — straightforward. But being able to “see” it before dozens of users do remains a challenge.
In all sorts of intellectual property conversations, one common refrain is something like “If you let people copy others, those copycats will be just as successful without having to work to develop a product.” This ire is most commonly aimed at big companies that see something successful and simply come up with their own version of it. And, to be generous, there certainly does seem to be something less than fair about that. But then you take a step back and watch just how often these copycat startups fall flat on their faces and you have to wonder why anyone worries about this stuff at all. Does nobody remember Google Plus?
Other companies have shown that it often builds more trust to not care about copycats any further than poking fun at them. Again, this is because the innovator almost always has a massive leg up on the copycat competitor, rather than the other way around. The most recent example of this is Microsoft’s Mixer platform, which was supposed to be a streaming service geared towards video gaming, with Twitch being the competition it was trying to “copy” off of. Well, even with the corporate power and war chest of Microsoft behind it, the platform failed and has since been offloaded to Facebook Gaming.
The shutdown starts today, with a transition plan laid out by Microsoft for Mixer streamers. Mixer Partners will be granted partner status with Facebook Gaming, and the platform will honor and “match all existing Partner agreements as closely as possible,” according to the blog detailing the change.
Several big-name streamers, such as Ninja and Shroud, moved from Twitch exclusively to Mixer this year. On Twitter, popular streamer King Gothalion announced he would be moving to Facebook; earlier this year, he signed a deal to stream exclusively on Mixer.
Even with some pretty big streaming names on the service, Mixer failed. Why? Well, because Twitch had already built up an audience and trust within the public for its product. Microsoft didn’t do enough to make Mixer stand apart from Twitch. Instead, the strategy appeared to roughly be just throwing money at some high profile streamers and expect audiences to flock to the platform because of it. That didn’t work, however.
Those streamers will now be free to move on to either Facebook Gaming or back to Twitch, where most of them began. Where the majority decide to go will be quite telling, but I imagine Facebook will throw money at this the same way Microsoft did. And if Facebook doesn’t do enough to make Gaming stand out and special compared with Twitch, it’ll likely fail in exactly the same way. What we’ve seen from Facebook Gaming thus far, however, does have some more intriguing social and DIY elements.
But the real lesson here is that building a copycat startup isn’t some get rich quick scheme. Or, it is, but it rarely works. So if you create a great platform, build a great community, and deliver great content… you probably are wasting time if you’re worrying about copycats.
With net neutrality on the ropes, major U.S. carriers continue to experiment with new ways to nickel-and-dime their subscribers. One of the cornerstones of this new effort involves erecting arbitrary restrictions, then charging mobile consumers extra money to overcome them. Case in point: Sprint’s attempt to charge users more money if they want to avoid arbitrary throttling of games, video, and music. Another example: Verizon’s decision to throttle all video on its network to 480p unless you pay the company for a more expensive, not really “unlimited” data plan.
While carriers like to insist that they only throttle user wireless connections in cases of network congestion, a recent study explored how that wasn’t remotely true. Carriers are increasingly throttling connections just to create arbitrary restrictions, and these restrictions, more often than not, have less and less to do with actual network congestion, and more and more to do with nickel-and-diming subscribers:
“There?s no evidence that any of these policies are only happening during network overload. They?re throttling video traffic even when the network doesn?t need to. It happens 24/7, and in every region where we have tests.”
Another study by Open Signal released last week notes that the United States lags behind dozens of other countries in terms of quality wireless streaming. The report took a closer look at streaming performance across 69 countries, using 90 billion measurements across 8 million devices between May and August of 2018. Countries were then ranked on the quality of their “overall video experience” based on how frequently videos buffered, the resolution of the stream, and overall video load times.
The United States didn’t fare very well. U.S. video quality ranked 59th in terms of overall video quality, and 34th in terms of average speeds. Not too surprisingly, the combination of slower wireless broadband speeds and arbitrary throttling and deprioritization practices carriers engage in are a major reason for the the U.S.’ poor showing:
“Video experience can also be heavily impacted by operator policy. Many operators globally use video optimization technologies to restrict the level of video resolution their customers can access on their phones. As our tests sample video at different resolutions, any downgrading of video quality ? say from HD to SD ? would have an impact on our scores.
The U.S. is a prime example of such policies at work.”
Don’t forget that studies show that U.S. consumers pay significantly more money for mobile bandwidth than users in many developed markets, only to have their actual video quality still ranked terribly. For its part, Open Signal leans heavily on the carrier justification for these arbitrary limits, insisting that they’re done exclusively to protect the network from congestion:
“Depending on the type of video, a 720p stream can consume twice as much or more data than a 480p stream. And as video now accounts for the majority of all mobile internet traffic, a doubling of the gross tonnage of video consumption would have a major impact on any operator’s network. More traffic leads to congestion, and congestion not only impacts overall speeds available to consumers but can also lead to inconsistent connections and poorer latencies ? all of which have a bearing on video experience.”
But that brings us back to that recent study by Northeastern, which showed that carrier throttling of video was in no way related to congestion. Yes, carriers may be eager to tightly restrict video to prevent traffic from being greater to save money, but that may not necessarily mean they’re responding to congestion. As made clear above, most carriers are very interested in erecting artificial tiers of service, where you have to pay more money for a stream to work as the sender originally intended. That’s less to do with congestion, and more to do with trying to make even more money off of American consumers.
With net neutrality dead and federal consumer protection taking a nice long vacation, you’re going to see a hell of a lot more of that type of behavior if the mega-ISPs and the FCC win the looming lawsuit filed by 23 State Attorneys General.
Last week we noted how Comcast had imposed new limits on its shiny new “unlimited” wireless plans. The company informed users of its Xfinity Wireless service that moving forward, all video on the service would be throttled back to 480p, with plans to begin charging you more if you want to watch your video in full HD quality. As we noted then, this was just a continuation of a theme already established by wireless carriers like T-Mobile and Sprint, which involved imposing arbitrary throttling thresholds for games, music and video, then charging you additional money to get around those bogus limitations.
It shouldn’t be particularly hard to see how imposing arbitrary limits that impede your ability to experience content as the originators intended sets a terrible precedent. And should the FCC’s net neutrality repeal survive its looming legal challenge, you’re going to see wireless carriers and ISPs slowly embrace more and more of this sort of thing, at least once they know for sure that the government has zero interest in actually policing such “creative” abuse of a broken market. What we’re seeing now is just the orchestra getting warmed up.
Following on the heels of Comcast, Charter has launched its own wireless service offering that also promises users “unlimited” connectivity. But like Comcast’s offering, Charter’s service will also throttle all video to 480p. The company’s Spectrum Mobile website explains how the industry’s definition of “unlimited data” still leaves a little something to be desired:
“After 20 GB per line, you may experience reduced speeds for the rest of the bill cycle.
There are no additional fees for using your phone as a mobile hotspot. After 5 GB of mobile hotspot data use in the bill cycle, mobile hotspot speeds are reduced to a maximum of 600 kbps for the rest of the bill cycle. Mobile hotspot data counts toward your 20 GB high-speed data allowance. Remember, your laptop may consume more data than your phone would for similar activities.
DVD-quality video streaming is supported. Video typically streams at 480p.”
As Sprint and T-Mobile try to sell regulators on their job and competition-eroding megamerger, one of their core justifications for the deal is that the reduction in total overall competitors from four to three is no big deal because cable operators are tinkering with wireless mitigating any real fallout. But that ignores a few things. Like the fact that T-Mobile’s CEO previously laughed off these services as irrelevant and destined to fail. Or that Comcast and Charter lean on Verizon Wireless’ network for backup, reducing their incentive to disrupt Verizon. And they’ve struck a deal that involves agreeing not to compete with each other.
As a result, Charter and Comcast’s wireless plans are almost mirror images of one another, including the middle finger at net neutrality (aka your right to enjoy content as intended by the service you’re subscribing to without your ISP injecting itself in the process to make an additional buck).
For now, Charter isn’t charging you more to watch videos in actual HD, but you can be pretty certain that’s coming down the road. With ISPs wary of the looming net neutrality court challenge, they’re trying desperately to remain on their best behavior. As such, you’re going to see very glacial moves toward tighter restrictions as these companies try to cash in on the one-two punch of limited competition and napping regulators like Ajit Pai. Initially — like being unable to watch HD video on your phone — they won’t seem like the end of the world, but cumulatively and over time, you can be damn well assured it’s going to hurt.
For years now, ESPN has been the perfect personification of the cable and broadcast industry’s denial regarding cord cutting. Long propped up by a system that forces consumers to buy massive bundles of largely-unwatched channels, ESPN has struggled with the rise of streaming alternatives and sleeker, “skinny” channel bundles. The sports network, which has lost 7 million viewers in just a few years, has been trying to argue that these losses (which caused Disney stock to lose $22 billion in value in just two days at one point) are simply part of some kind of overblown, mass hallucination.
“People trading down to lighter cable packages. That impact hasn’t leaked into ad revenue, nor has it leaked into ratings. The people who?ve traded down have tended to not be sports fans, and have tended to be older and less affluent. We still see people coming into pay TV. It remains the widest spread household service in the country after heat and electricity.”
In other words, there’s “nothing to see here” — outside of the total collapse of our entire legacy business model. At one point late last year, ESPN even went so far as to make a giant (unwarranted) stink about Nielsen data showing the cable channel had lost 621,000 homes in a single month. Things still aren’t looking particularly good for the company, with Disney’s earnings indicating that ESPN is fairly consistently losing about 10,000 viewers per day. That’s not surprising when you see surveys indicating that 56% of subscribers would drop ESPN in a heartbeat if it meant saving the $8 per user the channel is estimated to cost consumers.
Despite these numbers, Skipper and other ESPN executives have spent the last few years insisting that offering a standalone streaming app (you know, evolving for the market you’re doing business in) wasn’t financially viable:
“We could sell ESPN, as a standalone product, but we don’t believe it to be a good business,” Skipper said. “We’re in 90 million homes,” he added, “so no, we do not have a contemplation now that we would launch as a standalone.”
That was then, this is now. And ESPN executives appear to have been overruled by Disney higher ups. Speaking on the company’s recent earnings call, Disney CEO Bob Iger said that ESPN would now be conducting an about-face, and would launch a standalone streaming video service sometime in the next year or so:
“Iger affirmed that ESPN will launch a branded standalone streaming service later this year, in partnership with BAMTech, the digital technology firm in which Disney bought a $1 billion stake last year. He also talked up the prospects for ESPN to offset the industry-wide trend of declining subscriber rates via from traditional MVPDs through gains from the handful of upstart streaming channel packages that are in the works.”
Necessary evolution — how novel! Granted, ESPN’s still on the hot seat. I’ve heard from several industry insiders familiar with ESPN’s contracts with cable companies that language currently prevents cableco’s from breaking ESPN out of the core channel lineup (something ESPN sued Verizon for in 2015, because of course) unless ESPN offers its own streaming service standalone. In other words ESPN’s in for a rocky stretch either way.
Either the company launches a streaming video service that encourages cable companies to kick ESPN from the core bundle, further eroding ESPN’s traditional cable customer totals, or they refuse to offer such a service and these users leave anyway. But when you’re facing a major dismantling and reconfiguring of a legacy industry due to disruption, it’s better to be out in front of it and ready to meet evolving user demand, than stumbling around blindly in denial.
Last month, you might recall that Netflix found itself at the center of some “controversy” after it admitted it was throttling AT&T and Verizon customer Netflix streams to 600 kbps. At the time, the company stated it was only doing so to help out customers on metered usage plans. Netflix also stated that it wasn’t throttling the streams of Sprint and T-Mobile users, since “historically those two companies have had more consumer-friendly policies” (read: still offer unlimited data plans).
The cable industry and net neutrality opponents quickly tried to claim Netflix’s admission meant the company was a hypocrite on net neutrality, with some even calling for an “investigation.” The telecom industry’s PR push was short lived however, given most people realized that Netflix was actually trying to help consumers out, and it’s kind of odd to punish a company for technically throttling its own service. At the end of the day, the consensus was that the only real thing Netflix did wrong was not being fully transparent about what it was doing, and why.
Fast forward to this month and Netflix says it has now released a tool that will let users control themselves whether their stream is throttled, and how much. According to a company blog post, all users on mobile plans will now be throttled to 600 kbps, though you’ll have the option of changing that in the settings of the latest version of the app, including setting it to unlimited streaming. Notes Netflix:
“The default setting will enable you to stream about 3 hours of TV shows and movies per gigabyte of data. In terms of bitrates, that currently amounts to about 600 Kilobits per second. Our testing found that, on cellular networks, this setting balances good video quality with lower data usage to help avoid exceeding data caps and incurring overage fees. If you have a mobile data plan with a higher data cap, you can adjust this setting to stream at higher bitrates. Our goal is to give you more control and greater choice in managing your data usage whether you?re on an unlimited mobile plan or one that?s more restrictive.”
So, the story ends with Netflix giving consumers a tool to manage their own usage, and being totally clear about what they’re doing, which should make everybody happy, right? Not so much. Net neutrality opponents at TechFreedom were quick to blast the media with a press release trying to claim that Netflix was being held to a different standard:
“Three cheers for Netflix for user empowerment, but there?s no principled reason why broadband operators shouldn?t be able to give users the same option,? said Berin Sz?ka. ?The rhetoric for ?net neutrality? has always been about user empowerment. But the FCC wound up writing a hard-line rule that seems to completely ban broadband providers from adjusting video quality even if users want that. That?s crazy. It means consumers won?t get the kind of master interface that can manage quality across all video platforms ? which, in turn, would make ordinary users comfortable experimenting with multiple video platforms.”
That is, unfortunately, a very confused interpretation of what net neutrality actually is. Net neutrality rules are only necessary in telecom due to the lack of competition. Without competition, ISPs can use their monopoly over the last mile to hinder competitors or competing services (of which there are numerous examples), or to give their own services an unfair market advantage (something both Comcast and Verizon are currently doing with zero rating and usage caps). Users can, in stark contrast, stop using Netflix should they find the company engaging in anti-competitive behavior.
Ever since Netflix started speaking out about things like usage caps and net neutrality, the company’s been targeted by the telecom industry and its loyal allies as the very worst sort of villain. In this case, the difference between Netflix trying to help capped users and ISPs using a lack of competition to unfair advantage — should be night and day to most people. Unless of course you’re desperately clinging to the false narrative that net neutrality isn’t a real issue, and think a generation of easily documentable anti-competitive behavior on the part of incumbent ISPs is some kind of mass hallucination.
Netflix’s criticism of usage caps and vocal support of net neutrality (not to mention its threat as a pay TV competitor) has helped it replace Google as public enemy number one for the telecom industry. As such, every PR, lobbying, and political asset at the telecom industry’s disposal has taken aim at the streaming giant over the last few years, accusing the company of being a dirty freeloader and horrible hypocrite that’s unfairly lobbying the government to attack poor, honest, hardworking companies like AT&T and Comcast.
So when Netflix announced last week it was throttling the connections of AT&T and Verizon customers, the telecom industry’s various policy tendrils quivered in collective orgasm at the fresh opportunity for attack.
As noted last week, offhand comments by T-Mobile CEO John Legere appear to have forced Netflix to admit that it has been throttling AT&T and Verizon wireless customers back to 600 kbps. This was, the company insists in a blog post, an attempt to help out users stuck on metered plans with low usage caps and high overage fees. More curiously perhaps, Netflix also admitted that it hasn’t been throttling connections for users on Sprint and T-Mobile, because “historically those two companies have had more consumer-friendly policies” (read: they offer unlimited data plans).
Netflix’s revelation quickly resulted in AT&T, a company that has throttled customers and lied about it for years, insisting it was “outraged” by the revelation (since obviously Netflix’s decision would have cost it user overage fee penalties). The American Cable Association, a coalition of hundreds of smaller cable companies (but with Comcast NBC Universal also as a member) took things one step further, issuing a statement demanding an FCC investigation into Netflix’s behavior:
“ACA has said all along that this Federal Communications Commission’s approach to Net Neutrality is horribly one-sided and unfair because it leaves consumers unprotected from the actions of edge providers that block and throttle lawful traffic. The FCC’s disclosure rules also fall short by covering ISPs but allowing edge providers to affect consumers’ Internet experience in the same ways that ISPs’ actions can. And now we see further evidence of these shortcomings in Netflix’s confession that it has been engaging in covert video throttling to select groups of consumers.”
“ACA is disappointed, but not surprised, that Netflix used its immunity from the FCC’s Net Neutrality rules to engage in this practice. Netflix has the ability and incentive to engage in this anti-consumer behavior notwithstanding its impact on the virtual cycle that promotes the broadband deployment sustaining Netflix’s business model. In light of this revelation, ACA calls on the FCC to initiate a Notice of Inquiry into the practices of edge providers and how these companies can threaten the openness of the Internet. Under Section 706, the FCC has the authority to conduct such an inquiry and issue regulations, should it be deemed necessary.”
There’s obviously a few things wrong with that statement. One, it’s not a net neutrality violation if you’re throttling yourself, that’s just vanilla stupid. Two, net neutrality rules were applied to the broadband industry because of limited competition. If there was competition, users could punish bad behavior by switching ISPs, making the rules unnecessary. Net neutrality rules weren’t applied to edge content companies because users actually have a choice of options there. The same can’t be said for the broadband industry, where most are lucky to have the choice of one ISP that can provide anything resembling next-gen connectivity.
If there’s one thing that Netflix can be dinged for, it’s for lecturing ISPs on transparency, then failing to reveal that this was even happening. And thanks to competition, anybody bothered by that (and that’s not many, since nobody noticed what Netflix was doing for five years) has the choice of switching streaming video providers. But an investigation into a company for effectively throttling itself? The cable industry either doesn’t actually understand how net neutrality works, or it’s feeding the public a line of bullshit, trying to saddle Netflix with regulations it just spent the last decade trying to argue weren’t necessary in the first place.
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.