Last year, you might recall that Netflix took some heat for striking zero rating deals with Australian ISPs, exempting Netflix content from broadband usage caps. Australia was a relatively unique scenario in that the cost of transit is so high, most big content services had struck similar deals, and Netflix didn't want to put itself at a disadvantage in the newly launched Australian market by stubbornly holding on to neutrality principles. Still, it's worth recalling what Netflix said after a few weeks of criticism:
"Data caps inhibit Internet innovation and are bad for consumers. In Australia, we recently sought to protect our new members from data caps by participating in ISP programs that, while common in Australia, effectively condone discrimination among video services (some capped, some not). We should have avoided that and will avoid it going forward. Fortunately, most fixed-line ISPs are raising or eliminating data caps in line with our belief that ISPs should provide great video for all services in a market and let consumers do the choosing."
"Zero rating isn't great for consumers as it has the potential to distort consumer choice in favor of choices selected by an ISP."
Fast forward to 2016, and Netflix is suddenly throwing its support behind T-Mobile and its controversial Binge On zero rating program. Speaking on the company's earnings call this week, Netflix CEO Reed Hastings praised Binge On, which throttles every shred of video that touches the T-Mobile network to 1.5 Mbps, whether or not consumers or content partners asked it to. According to Hastings, he's thrilled about the program because it has driven more usage to Netflix:
"It’s voluntary to the customer. Every customer of T-Mobile can decide to turn it on or turn it off," Hastings explained on an earnings call today. "They’re not charging any of the providers. It’s an open program. Many of our competitors such as Hulu and HBO are in the program also." Netflix may be more inclined to defend this program because the company benefits from it: Hastings says that Netflix is seeing more viewership from T-Mobile customers — no surprise since it makes "unlimited video consumption possible." Hastings added that he hopes these kinds of programs expand further."
But as the EFF has pointed out, the fact that users can opt out is irrelevant. T-Mobile's been throttling every shred of video that touches its network to 1.5 Mbps (streamed or direct downloaded) by default, and then lying about it. Critics like YouTube and the EFF have, quite correctly, pointed out that such a program should be opt-in, for both consumers and content partners. The other problem is simply one of precedent; let T-Mobile dick about with how content gets treated, and that opens the door to every carrier modifying traffic to their own benefit.
By refusing to ban zero rating outright, the FCC has opened the door to a flood of similar ideas that are even worse and, cumulatively and aggressively, are eroding the idea of an open Internet. Worse, it's happening to the thunderous applause of some consumers, who think they're being given a gift when an ISP imposes utterly arbitrary usage caps, then graciously allows select content to bypass said caps. Make no mistake though; the act of fucking about with traffic in this fashion is an assault on net neutrality. That many people don't understand this yet (or are eager to ignore the fact when it benefits them) doesn't magically make it less true.
A few years ago, Netflix's Hastings went on a Facebook rant about how Comcast was unfairly letting its own streaming services bypass the company's usage caps. But now that Netflix is seeing benefits from zero rating, it's apparently willing to throw its principles in the toilet. Netflix may want to be careful where it treads. As some companies have discovered, zero rating isn't your friend -- and the special treatment that benefits you today may come back to bite you tomorrow.
Earlier today we wrote about the latest misleading claims from John Legere and T-Mobile about its BingeOn program. I've seen some confusion some of the discussions about this -- some of it thanks to Legere's misleading claims -- so I wanted to go through exactly what T-Mobile appears to be doing and why it's problematic. Also, with that, I wanted to highlight the key part of the FCC's net neutrality rules regarding throttling, and the one single paragraph that T-Mobile appears to be banking on to protect it from getting slapped around.
First, let's be clear: T-Mobile wants to pretend that this is a "semantic" dispute about what it's doing, but that's bullshit. From the beginning the company has been flat out lying about its actions. That may get it in trouble in two ways -- first for violating the bright-line "no throttling" rules and for violating the corresponding transparency rules as well.
So what is T-Mobile doing: if you're a T-Mobile customer and you visit a page to stream or download video (whether or not it's a BingeOn partner), T-Mobile is automatically slowing down your bandwidth to about 1.5 Mbps. That's the throttling bit. What T-Mobile is telling people is that it's "optimizing" the video to a lower resolution. That may be true with some partners, but it's not true of non-partners, especially ones that are encrypted, such as YouTube, where T-Mobile has no way of "optimizing" the video. Instead, even with encrypted streams, since the metadata is still there, it can tell that you're, say, suddenly getting a lot of data from YouTube, and then it automatically slows down the bandwidth.
T-Mobile is hoping that at the server end, YouTube or any other video provider will see this slow bandwidth and say "oh, there's a narrow pipe here, so we should degrade the video down to lower resolution. So, if there's any "optimization" going on, it's actually happening at the server end after T-Mobile has basically tricked them into thinking there's a slow connection. But, in many cases, that doesn't happen, and the end result is not optimized video, or faster video, or even (as T-Mobile keeps claiming) getting to view 3x the amount of data under existing data caps. Instead, it's just the same video at the same resolution... but comes in much more slowly with lots of buffering.
So, to repeat: don't fall for John Legere's spin. The "proprietary technology" he keeps touting is not optimizing non-partner video. It is doing one thing and one thing only: and that's throttling the video.
Now, on to the FCC's rules. Let's look at what the rules pretty clearly say:
A person engaged in the provision of broadband Internet access service, insofar as such
person is so engaged, shall not impair or degrade lawful Internet traffic on the basis of
Internet content, application, or service, or use of a non-harmful device, subject to
reasonable network management.
Throughout the FCC's statement on the rules, it notes that this is a bright line rule.
With the no-throttling rule, we ban conduct that is not outright blocking, but inhibits the
delivery of particular content, applications, or services, or particular classes of content, applications, or
services. Likewise, we prohibit conduct that impairs or degrades lawful traffic to a non-harmful device
or class of devices. We interpret this prohibition to include, for example, any conduct by a broadband
Internet access service provider that impairs, degrades, slows down, or renders effectively unusable
particular content, services, applications, or devices, that is not reasonable network management. For
purposes of this rule, the meaning of “content, applications, and services” has the same as the meaning
given to this phrase in the no-blocking rule. Like the no-blocking rule, broadband providers may not
impose a fee on edge providers to avoid having the edge providers’ content, service, or application
throttled. Further, transfers of unlawful content or unlawful transfers of content are not protected by the
no-throttling rule. We will consider potential violations of the no-throttling rule under the enforcement
provisions outlined below.
We find that a prohibition on throttling is as necessary as a rule prohibiting blocking.
Without an equally strong no-throttling rule, parties note that the no-blocking rule will not be as effective
because broadband providers might otherwise engage in conduct that harms the open Internet but falls
short of outright blocking. For example, the record notes the existence of numerous practices that
broadband providers can engage in to degrade an end user’s experience.
From that, it seems fairly clear that what T-Mobile is doing violates the no throttling rule. It is slowing down a class of content that is not for anything having to do with reasonable network management.
But T-Mobile keeps harping on the fact that this is "the user's choice" and even claimed throttling is only throttling if the user has no choice. That's because of the next paragraph in the rules -- and this seems to be the entire crux of T-Mobile's argument for why it's not violating the rules:
Because our no-throttling rule addresses instances in which a broadband provider targets
particular content, applications, services, or non-harmful devices, it does not address a practice of slowing
down an end user’s connection to the Internet based on a choice made by the end user. For instance, a
broadband provider may offer a data plan in which a subscriber receives a set amount of data at one speed
tier and any remaining data at a lower tier. If the Commission were concerned about the particulars of a
data plan, it could review it under the no-unreasonable interference/disadvantage standard. In contrast,
if a broadband provider degraded the delivery of a particular application (e.g., a disfavored VoIP service)
or class of application (e.g., all VoIP applications), it would violate the bright-line no-throttling rule. We
note that user-selected data plans with reduced speeds must comply with our transparency rule, such that
the limitations of the plan are clearly and accurately communicated to the subscriber.
It's this paragraph that is going to be scrutinized like crazy. T-Mobile insists that because you have the choice to turn BingeOn off, that means that this is "based on a choice made by the end user" and thus the "no throttling" rule doesn't apply.
That seems like a difficult argument to sustain, given that T-Mobile made the initial choice for all of its users. So that initial choice was not made by the user, even if they can (through a convoluted process) turn it off. Separately, the second part that I bolded above appears to totally undermine T-Mobile's argument. It is degrading a class of applications (all video applications) and thus, the FCC rules note, it violates the bright-line no-throttling rule.
There is, separately, the issue of transparency. T-Mobile claims that it was transparent about all of this, but I don't think that's actually true. As we've covered, it really buried and hid the fact that BingeOn applied to non-partner videos, and did so in a confusing way. It also lied about the optimization and the claim that it couldn't even do anything to YouTube videos at the very time it was absolutely throttling them. That's not very transparent. On top of that, by continually falsely claiming that this was "optimization" not "throttling" and even claiming that it would "speed up" videos, rather than slow them down, I do wonder how the company can claim it was truly transparent.
On that front, T-Mobile has been relying on claims that it emailed and texted customers about the move. I have looked and I have received no such emails or texts. In fact, here are all the texts I've received from T-Mobile since August. Note the lack of any text about BingeOn.
Of course, who knows how the FCC will eventually deal with this, but the claim that the company is optimizing, rather than throttling is flat out wrong. It's a lie. The claim that it's respecting the net neutrality rules by letting you opt-out is questionable at best, and most likely false, as the consumer made no initial choice for the throttling. It's moves like these that raise serious questions about just how "consumer friendly" T-Mobile is really being, and which are seriously undermining trust in the company.
The big story of last week was T-Mobile CEO John Legere's meltdown over people calling out the bullshit claims about BingeOn "optimizing" mobile video when the truth is that it was simply throttling all video traffic (partners and non partners alike). Things got even worse when Legere decided to attack EFF and suggest that it was being paid to discredit BingeOn. The simple fact remains, however, that T-Mobile is throttling video streams (and downloads).
Legere briefly went quiet about all of this, but on Monday came out again with yet another statement in the form of an "Open Letter to Consumers about Binge On" which is at least a little more honest, but is still mostly misleading bullshit -- the very thing T-Mobile has built its recent reputation on avoiding.
We invented Binge On to provide customers with an easy and effective way to stretch their data bucket. Knowing that the number one (and climbing) use of data out there is video, it was obviously the natural place to focus. Binge On is like an economy button built into a new car to save gas, and it’s a benefit that customers got the minute we launched, to use it as much as they want to. Period.
Again that sounds good but is totally misleading. First of all, it's T-Mobile that sets the data buckets in the first place. So relieving consumers of the burden that T-Mobile itself placed on consumers is not a consumer-friendly move. It's punching someone and then claiming you're being nice by offering them a hand to get them off the ground. If you start the anti-consumer practice, it's not pro-consumer to roll back a tiny part of it.
Binge On is a FREE benefit given to all T-Mobile customers. It is and always has been a feature that helps you stretch your data bucket by optimizing ALL of your video for your mobile devices.
If this were truly a "benefit" then why does it also apply to unlimited accounts (like mine)? Unlimited account holders don't need or want this "benefit" (and it's not really much of a benefit as we'll get to).
We use our proprietary techniques to attempt to detectall video, determine its source, identify whether it should be FREE and finally adjust all streams for a smaller/handheld device. (Most video streams come in at incredibly high resolution rates that are barely detectable by the human eye on small device screens and this is where the data in plans is wasted). The result is that the data in your bucket is stretched by delivering streamed video in DVD quality - 480p or better (whether you have a 2GB, 6GB or 10GB plan etc.) so your data lasts longer. Putting aside the 38+ services for which we provide FREE data for video through Binge On, as discussed below – this “stretching” of your data bucket is estimated to allow you to watch UP TO 3X MORE VIDEO from your data plan than before. This is a huge step forward.
Again, it's worth remembering that when T-Mobile launched this supposedly consumer-friendly offering, they completely hid the fact that it applied to all video, implying strongly that it only applied to partners. In fact, the company's CTO argued that it was not even possible to identify many YouTube videos -- a claim that turned out to be one of the many lies T-Mobile has spread over this mess.
Second, T-Mobile keeps claiming that most users can't tell the difference between 480p videos and higher quality HD videos, but that's bullshit. In many cases the difference in quality is quite obvious. And, again, if this was all about having your data "last longer" there would be no reason at all to turn it on for unlimited account holders.
Also note that T-Mobile is being a bit misleading here, as its original marketing on BingeOn noted that the free video streaming did not apply to accounts that had less than 3GB on their caps:
Next up, Legere continues to pretend that this is clearly a beneficial service that his customers wanted, despite many, many users saying that they wanted no such thing:
As with virtually all of our Un-carrier benefits, we immediately gave it to everyone! First we reached out to all of our customers via email and SMS message, and told them all about the new functionality that was coming their way. Then we turned it on, for everyone! So if you are a T-Mobile customer – you already have Binge On!
Again, this makes absolutely no sense for unlimited accounts, and the fact that it's not opt-in is just silly:
We strive to default all of our customer benefits to “ON.” We don’t like to make customers dig around to find great new benefits -- that is something a traditional carrier would do when they really hope you, the consumer, won’t take any action. Can you imagine the disappointment, if people saw our TV commercials about Binge On, then went to watch 10 hours of video expecting it to be free, and only THEN learned that they needed to go into their settings to activate this new benefit? That’s how the Carriers would do it, but not T-Mobile. Everyone has it from day 1, period.
So instead of making customers dig around to find this (which is not a "great new benefit"), they make customers dig around to find how to turn it off because they don't want it. That's exactly how the big carriers do things. And, once again, there's simply no reason why it should ever be turned on for unlimited data users.
But here’s the thing, and this is one of the reasons that Binge On is a VERY “pro” net neutrality capability -- you can turn it on and off in your MyTMobile account – whenever you want. Turn it on and off at will. Customers are in control. Not T-Mobile. Not content providers. Customers. At all times.
This is what T-Mobile is banking on as the reason why it's not violating the bright line rule against throttling in the FCC's net neutrality rules -- because there's a small "out" in the rules, saying that the no throttling rule doesn't apply to choices made by the end user to throttle traffic. Of course, that's assuming a situation where the end user proactively decides to slow down certain types of traffic, not where it's forced upon them, and there's a convoluted process to opt-out of it.
Either way none of this addresses the actual concerns raised by many T-Mobile subscribers: T-Mobile lied. It said that it was "optimizing" the video when the truth is that it was just slowing down the video. It doesn't change the fact that T-Mobile was far from transparent in explaining that this throttling (not optimizing) applied to all video, even with non-partner video. Finally, T-Mobile lied in insisting that this "optimization" would make videos load faster, when the reality is that for many video services it neither saves any data (the full file is downloaded, just slower), nor does it speed things up. Instead, it makes it buffer when there's plenty of available bandwidth.
That's what people are complaining about and T-Mobile ignores all of it, continuing to insist that BingeOn is nothing but a consumer friendly offering.
In the end, Legere gives a weak apology to the EFF that again fails to recognize why so many people took issue with his characterization of the EFF ("who the fuck are you? and who pays you?") and pretends that it's just about a difference of opinion:
I will however apologize for offending EFF and its supporters. Just because we don’t completely agree on all aspects of Binge On doesn’t mean I don’t see how they fight for consumers. We both agree that it is important to protect consumers' rights and to give consumers value. We have that in common, so more power to them. As I mentioned last week, we look forward to sitting down and talking with the EFF and that is a step we will definitely take. Unfortunately, my color commentary from last week is now drowning out the real value of Binge On – so hopefully this letter will help make that clear again.
The problem wasn't "offending" EFF, it was that EFF did a good job exposing what T-Mobile is actually doing, and rather than responding to them, you freaked out, attacked them and their credibility and acted like they were some nobody shills. That's not offensive, it's stupid and raises serious questions about T-Mobile's intentions.
Again, what is the "value" of BingeOn, other than throttling video down? Legere still keeps insisting things that aren't really true at all. It's too bad, because Legere had built up T-Mobile to be customer friendly and his reaction to this whole situation has done serious damage to that reputation.
Well, this has really turned into quite a week for T-Mobile CEO John Legere, huh? First, his lies about BingeOn throttling were exposed. Then he doubled down on the lie insisting that BingeOn wasn't throttling despite clear evidence that it is. Then, he attacked EFF for exposing his lie. All the meanwhile, T-Mobile spokespeople were confirming that the company is, absolutely, slowing down all video traffic.
In light of recent events and comments made by your CEO, John Legere, we have decided to halt our participation in Binge On and disable our traffic shaping rules for the time being. As per the agreement, please consider this 24 hours notice that 4Stream.TV will no longer participate in the program.
As net neutrality supporters and EFF Members, we encourage you to be more honest and transparent about the issue and develop a program that we can be proud to participate in.
Kudos to Patrick Hampson and Aaron Zufall for making that decision.
Of course... the unfortunate truth, as we now know from all of this, is that even once they've decided not to participate in the program it doesn't change the fact that their videos will get throttled.
from the they're-wrong-about-the-throttling,-maybe-not-on-the-jerk-thing dept
On Monday we wrote about T-Mobile flat out lying about the nature of its BingeOn mobile video service -- and after a couple of days of silence, the company has come out swinging -- by lying some more and weirdly attacking the people who have accurately portrayed the problems of the service. As a quick reminder, the company launched this service a few months ago, where the company claimed two things (though didn't make it entirely clear how separate these two things were): (1) that the company would not count data for streaming video for certain "partner" companies and (2) that it would be "optimizing" video for all users (though through a convoluted process, you could opt-out).
There were a bunch of problems with this, starting with the fact that favoring some partner traffic over others to exempt it from a cap (i.e., zero rating) is a sketchy way to backdoor in net neutrality violations. But, the bigger issue was that almost everything about T-Mobile's announcement implied that it was only "partner" video that was being "optimized" while the reality was that they were doing it for any video they could find (even downloaded, not streamed). The biggest problem of all, however, was that the video was not being "optimized" but throttled by slowing down video.
Once the throttling was called out, T-Mobile went on a weird PR campaign, flat out lying, and saying that what they were doing was "optimizing" not throttling and that it would make videos stream faster and save users data. However, as we pointed out, that's blatantly false. Videos from YouTube, for example, were encrypted, meaning that T-Mobile had no way to "optimize" it, and tests from EFF proved pretty conclusively that the only thing T-Mobile was doing was slowing connection speeds down to 1.5 Mbps when it sensed video downloads of any kind (so not even streaming), and that actually meant that the full amount of data was going through in many cases, rather than an "optimized" file. EFF even got T-Mobile to admit that this was all they were doing.
So that makes the response of T-Mobile execs yesterday and today totally baffling because rather than actually respond to the charges, they've doubled down on the blatant lying, suggesting that either it's executives have no idea what the company is actually doing, or that they are purposely lying to their users, which isn't exactly the "uncarrier" way that the company likes to promote.
We'll start with the big cheese himself, CEO John Legere, whose claim to fame is how "edgy" he is as a big company CEO. He's now released a statement and a video that are in typical Legere outspoken fashion -- but it's full of blatant lies.
The video and the typed statement are fairly similar, but Legere adds some extra color in the video version.
Let's parse some of the statements. I'll mostly be using the ones from the written statement as they're easier to cut and paste, rather than transcribe, but a few from the video are worth calling out directly.
I’ve seen and heard enough comments and headlines this week about our Binge On video service that it’s time to set the record straight. There are groups out there confusing consumers and questioning the choices that we fight so hard to give our customers. Clearly we have very different views of how customers get to make their choices -- or even if they’re allowed to have choices at all! It’s bewildering …so I want to talk about this.
Of course, this is a nice, but misleading attempt to frame the conversation. No one is complaining about "giving choices to consumers." They're complaining about (1) misleading consumers and (2) providing a worse overall experience by throttling which (3) directly violates the the FCC's prohibition on throttling. The next part I'm taking from the video itself, rather than the printed statement, because Legere goes much further in the video, including the curses, which magically don't show up in the printed version:
There are people out there saying we’re “throttling.” That's a game of semantics and it's bullshit! That's not what we're doing. Really! What throttling is is slowing down data and removing customer control. Let me be clear. BingeOn is neither of those things.
This is flat out wrong and suggests Legere doesn't even know the details of his own service. As the EFF's tests proved (and the fact that YouTube videos are encrypted should make clear) T-Mobile is absolutely slowing down data. In fact, EFF got T-Mobile to confirm this, so Legere claiming it's "bullshit" is... well... bullshit!
But he's playing some tricky word games here, claiming that throttling is not just slowing down data, but also removing customer control. That's (1) not true and (2) also misleading. For all of Legere and T-Mobile's talk about "giving more options to consumers" or whatever, they're totally leaving out the fact that they automatically turned this on for all users without a clear explanation as to what was happening, leading to multiple consumer complaints about how their streaming videos were no longer functioning properly -- even for users on unlimited data plans.
Customer choice? Sure they could "opt-out" after through a convoluted process that many did not understand. But T-Mobile made the choice for all its users, rather than providing a choice for its customers to make.
Mobile customers don’t always want or need giant heavy data files. So we built technology to optimize for mobile screens and stream at a bitrate designed to stretch your mobile data consumption. You get the same quality of video as watching a DVD, but use only 1/3 as much data (or, of course, NO data used when it’s a Binge On content provider!). That's not throttling. That's a huge benefit.
Again, this is both wrong and misleading. There is no optimization. Legere is lying. They are 100% slowing down the throughput on video when they sense it. The EFF's tests prove as much. Yes, for some video providers when they sense lower bandwidth, they will downgrade the resolution, but that's the video provider optimizing, not T-Mobile. T-Mobile is 100% throttling, and hoping that the video provider downgrades the video.
But in cases where that doesn't happen then it doesn't save any data at all (the EFF test confirmed that the full video file still comes through, just slower).
Also, note the play on words "You get the same quality of video as watching a DVD." At first you think he's saying that you get the same video quality overall, but he's not. He's saying as a DVD, at 480p, which is lower than the 1080p that many HD videos are offered at. And that's what many people are complaining about -- that they'd like to watch videos at the full 1080p, but T-Mobile made the choice that they can't do that unless they go through a convoluted process to turn this off.
Rather than respond to any of this, Legere then claims that "special interest groups" and Google are doing this.... "to get headlines."
So why are special interest groups -- and even Google! -- offended by this? Why are they trying to characterize this as a bad thing? I think they may be using Net Neutrality as a platform to get into the news.
Wait, what? Google -- the same Google that absolutely refused to say anything publicly at all about net neutrality for years during the debate suddenly wants to get into the news by jumping on the net neutrality bandwagon? Does Legere have any idea how ridiculous that sounds? And it's not like Google has a problem getting into the news. And what about EFF and others? Does he really think they need to get extra news coverage?
But note the facts here: at no point does Legere respond to the actual charges leveled against the company. He then concludes by yelling at everyone for daring to complain about this:
At T-Mobile we're giving you more video. More choice. And a powerful new choice in how you want your video delivered. What's not to love? We give customers more choices and these jerks are complaining, who the hell do they think they are? What gives them the right to dictate what my customers, or any wireless consumer can choose for themselves?
Nice. I'm part of the contingent complaining about this and I'm also a T-Mobile customer... and the CEO just called me a jerk while telling me he's fighting for his customers? Really now?
And again this whole statement is blatantly misleading. The "choice" was made by T-Mobile for all users, and getting out of it involves a convoluted process that most don't understand and where none of this was made clear to end users. Beyond violating the FCC's "no throttling" rule, I wonder if it also violates the FCC's transparency rules as well, in which they are required to be much more upfront about how the data is being treated.
Also, the statement above is from the video where we're described as "jerks," but in the written version it leaves out the "jerks" claim, but also includes the following bit mocking YouTube for letting users choose to change the resolution on videos:
YouTube complained about Binge On, yet at the same time they claim they provide choice to customers on the resolution of their video. So it's ok for THEM to give customers choice but not for US to give our customers a choice? Hmmm. I seriously don't get it.
But that's bullshit also. YouTube's choice option there is a clear pulldown on every video shown, so that a user just needs to click on the video their watching and set the resolution. T-Mobile's is a process that's not clear at all, with some users reporting they had to call in and get T-Mobile customer service to turn BingeOn off for their account. To compare the two situations is completely bonkers.
As far as I can tell, Legere either doesn't understand what his own company is doing technically, or knows and is purposely misrepresenting it. Neither of those look good and go against the entire "uncarrier" concept they keep pitching. I'd expect better as a T-Mobile customer than being told that I'm a "jerk" for pointing this out.
And it appears he's not the only one among senior execs at T-Mobile who still don't realize what their own company is doing. On Wednesday at a Citigroup conference, T-Mobile's Chief Operating Officer Mike Sievert
spewed some more nonsense suggesting he, too, has no idea what his own company is doing:
At a Citigroup investor conference Wednesday, T-Mobile executives shot back, saying YouTube’s stance is “absurd.” YouTube is owned by Alphabet Inc. “We are kind of dumbfounded, that a company like YouTube would think that adding this choice would somehow be a bad thing,” said T-Mobile Chief Operating Officer Mike Sievert. He said YouTube hasn’t “done the work yet to become part of the free service.”
Taken at face value, that comment makes no sense. If YouTube hasn't done the work yet to become a part of the free service than why the fuck is T-Mobile slowing down its videos? YouTube wasn't complaining about "adding this choice." YouTube was complaining about direct throttling of video content by T-Mobile, in clear violation of the FCC's prohibition on throttling.
Sievert and Legere both don't seem to understand (1) what YouTube and users are complaining about or (2) what his own company is doing. That's... troubling, given that these are the CEO and COO of the company. It really seems like T-Mobile execs might want to spend some time talking to its tech team to understand the fact that the only thing T-Mobile is doing to video is throttling it down to 1.5 Mbps, rather than any actual "optimization" before spewing more nonsense and calling their own customers "jerks." And, they might want to realize that their claim that this is all "bullshit" is actually complete bullshit. And that their bullshit may very well violate the FCC's rules.
Big companies often have a way of tap dancing around the truth. It's rarely lying, because they will choose their words carefully, in a manner that clearly misleads or distorts, but is not necessarily outright lying. T-Mobile, however, appears to be flat out lying. We recently wrote about the charges from YouTube that T-Mobile was throttling YouTube videos as part of its Binge On program that zero rates video on mobile phones so it doesn't count against data caps. We noted the problems with this program when it launched, but YouTube's claims take it even further.
Again, the program supposedly "optimizes" video streams down to a lower resolution, with the promise that partner videos will not count against T-Mobile's data caps. However, YouTube pointed out that it is not a partner and its videos were being throttled, in clear violation of the clear "no throttling" rules from the FCC. T-Mobile took exception to my post about it and demanded corrections and clarifications, making a few different claims. After investigating the claims, I can say (1) that we will not be clarifying or correcting anything in the original post and (2) more importantly, it appears that T-Mobile is flat out lying in some of its claims. It's not dancing around the truth, it is claiming things that are simply untrue. This is the key claim that T-Mobile's PR person made to me:
Using the term “throttle” is misleading. We aren’t slowing down YouTube or any other site. In fact, because video is optimized for mobile devices, streaming from these sites should be just as fast, if not faster than before. A better phrase is “mobile optimized” or “lower resolution.”
This is clearly not true. While you can have a semantic debate about whether "throttling" is "optimizing," the facts with T-Mobile are pretty clear: it is NOT optimizing YouTube videos at all. It is 100% throttling them.
When Binge On first launched without YouTube as a partner, many people asked why, and T-Mobile's VP of Engineering, Grant Castle, explained that the reason was because it could not identify YouTube videos, since nearly all YouTube traffic is encrypted. Thus, T-Mobile admitted that it had no way to "optimize" YouTube videos:
T-Mobile says the problem is technical. The software it is using to deliver streaming video at lower-definition quality needs to be able to identify the incoming traffic as being video as opposed to, say, photographs or email. It can’t always do that with YouTube.
Most YouTube traffic uses a protocol called HTTPS, which T-Mobile can detect, but some portions may be using a less-used protocol called UDP that the wireless company has more difficulty reading, according to Grant Castle, vice president of engineering at T-Mobile. That means the carrier isn’t certain about the format of some streams coming from YouTube.
“YouTube is a little difficult,” said Mr. Castle.
Thus, the only thing that T-Mobile can do for many YouTube encrypted streams is not to "optimize" it at all, but to flat out throttle it down to speeds around 1.5 mbps. You can see this in the tests done by Dualsim.us and the following video.
Remember how T-Mobile in their message to me said that the "optimized" videos should show up "just as fast, if not faster than before." Yeah, that's bullshit. Watch the video below (I start the video about 5 minutes in -- the first five minutes mostly just show that the two phones are both on T-Mobile's unlimited network with similar speed connections -- at which point the video comparison is shown):
As you can see, rather than "just as fast, if not faster than before," what you see for the throttled -- not "optimized" -- video is, instead, something much slower. That's because T-Mobile appears to downgrade the data flow from ~12 Mbps down to something like 1.4 or 1.5 Mbps.
That's absolutely 100% throttling. There is no "optimization" going on because T-Mobile cannot optimize those videos, since they're encrypted.
T-Mobile is lying. Flat out lying.
And... in a bit of perfect timing, just as I was completing this post, I see that EFF has published the results of its own technical tests of BingeOn, which also confirm that there is no "optimization" here -- and got T-Mobile to admit it was lying. It's purely throttling:
Our last finding is that T-Mobile’s video “optimization” doesn’t actually alter or enhance the video stream for delivery to a mobile device over a mobile network in any way. This means T-Mobile’s “optimization” consists entirely of throttling the video stream’s throughput down to 1.5Mbps. If the video is more than 480p and the server sending the video doesn’t have a way to reduce or adapt the bitrate of the video as it’s being streamed, the result is stuttering and uneven streaming—exactly the opposite of the experience T-Mobile claims their “optimization” will have.
Given the difference between what T-Mobile implies they do and what we found, we contacted them to get clarification. They confirmed that they don’t do any actual optimization of video streams other than reducing the bandwidth allocated to them (and relying on the provider to notice, and adapt the bitrate accordingly).
In fact, the EFF study compared a hash of the download to a version that was on the server and found the files were identical (i.e., no "optimization" -- just purely throttling). Again, this is the exact opposite of what T-Mobile's PR person told me in demanding a correction. T-Mobile is lying.
EFF also discovered that T-Mobile's earlier statement that it can't detect encrypted video is also misleading, as the company now claims it can:
The second major finding in our tests is that T-Mobile is throttling video downloads even when the filename and HTTP headers (specifically the Content-Type) indicate the file is not a video file. We asked T-Mobile if this means they are looking deeper than TCP and HTTP headers, and identifying video streams by inspecting the content of their customers’ communications, and they told us that they have solutions to detect video-specific protocols/patterns that do not involve the examination of actual content.
Finally, EFF realized that even if you're just downloading the video (i.e., not streaming, but downloading for later viewing), you STILL get throttled:
The first result of our test confirms that when Binge On is enabled, T-Mobile throttles all HTML5 video streams to around 1.5Mps, even when the phone is capable of downloading at higher speeds, and regardless of whether or not the video provider enrolled in Binge On. This is the case whether the video is being streamed or being downloaded—which means that T-Mobile is artificially reducing the download speeds of customers with Binge On enabled, even if they’re downloading the video to watch later. It also means that videos are being throttled even if they’re being watched or downloaded to another device via a tethered connection.
A separate claim in the email from T-Mobile is more of the "tap dancing around the truth" variety. And it's the claim that T-Mobile made it clear from the beginning that it would be doing this to non-partner videos as well. Here's what the T-Mobile rep said in the email to me:
This is how Binge On has always worked. We said it from the stage, in press materials, on the web, and in customer notifications last month, and media covered it last month, as well.
This is extremely misleading. Nearly everyone I've spoken to among people who follow these issues had no idea that the "throttling" (not optimization) applied to non-partner videos. I, as a T-Mobile customer, also never received any such notice (though the PR person then forwarded me the "notification" email, so I guess technically I have now received it). Either way, I went back to look at the press release and T-Mobile's own page about Binge-On to see about how clearly the company really revealed that it would also be throttling non-partner video. And the company was not at all clear about it.
In the press release (not surprisingly), T-Mobile focuses on all the Binge On partners. To realize that it's also throttling other videos you have to carefully parse some confusing text buried in the 8th paragraph of the press release, which most people won't even recognize. Here are paragraphs four through eight -- with the relevant mention bolded (without that, you might miss it):
With Binge On, video now streams free for viewers and subscribers of Crackle, Encore, ESPN, Fox Sports, Fox Sports Go, HBO Now, HBO Go, Hulu, MLB, Movieplex, NBC Sports, Netflix, Sling TV, Sling Box, SHOWTIME, STARZ, T-Mobile TV, Univision Deportes, Ustream, Vessel, Vevo, VUDU—with more streaming services on the way—without ever touching their 4G LTE data on Simple Choice plans with extra data. T-Mobile is also including Verizon’s Go90 and AT&T’s DirecTV streaming services in Binge On, so even the Duopoly’s video services stream without fear of overages.
Binge On is open to any streaming video provider who meets the technical requirements, which are available online at www.t-mobile.com/bingeon. And it’s completely free for video streaming providers to join.
“With Binge On, no one pays—not the customers, not the video streaming services—and everyone wins,” said Legere.
Powered by new technology built in to T-Mobile’s network, Binge On optimizes video for mobile screens, minimizing data consumption while still delivering DVD or better quality (e.g. 480p or better). That means more reliable streaming for services that stream free with Binge On, and for almost all other video, it means T-Mobile Simple Choice customers can watch up to three times more video from their data plan. And, as always, T-Mobile has put customers in total control with a switch to activate or deactivate Binge On for each line in their My T-Mobile account. Binge On is all about customer choice.
So basically all of the press release is talking about how Binge On is about "free" video from partners, and then in the second half of a sentence, buried in the middle of a paragraph (eight paragraphs into the press release) is a tidbit about how "for all other videos" the bandwidth is downgraded (what T-Mobile falsely calls "optimized"). That is the farthest thing from being clear about what is happening.
Similarly, on the website for Binge On itself, this is far from clear. Most of the page goes on and on and on about how "you can stream all you want for FREE without using your data." The clear implication is that video streaming doesn't count against a datacap. Lower down it has the following:
What basically no one is going to realize is that the "Watch 3X more video" claim on the right is talking about non-partner video. They don't actually say that. In fact, given how so much of the focus is on how the video doesn't count against the data cap at all, the whole "3x more video" bit is actually kind of confusing, because they're both saying you can watch "as much video as you want" on the left, and then on the right, saying you can now watch 3x as much video. They are not being clear at all about this.
It's only if you go all the way to the bottom of the page and click to expand the first "question" about Binge On that it finally explains what this means:
I mean, it's really, really buried. Here's a screenshot of the whole page, showing you where this information is buried (and, remember, this is showing it to you after I've clicked the little "+" button to show more). Most people will miss it entirely:
So, yeah: T-Mobile is flat out lying in claiming that it "optimizes" YouTube, and it's being ridiculously misleading in arguing that it was abundantly clear about how Binge On would impact non-partner videos.
Now, the big question: will the FCC actually do anything about this?
For quite some time now, we've pointed out that the whole zero rating issue was a way for broadband providers to conduct a stealth war on net neutrality -- first putting in place "restrictions" that they could then "lift" for partners, pretending it was a consumer friendly move. Last month, T-Mobile introduced Binge-on, it's second such attempt at zero rating. Its first, Music Freedom, exempted some streaming music services from its data caps. Binge-On focused on video, but had a few oddities. Like Music Freedom, Binge On would make "select" video streaming platforms exempt from the data cap -- but in order to do that, it would downgrade the quality of those streams to 480p, a lower resolution than most are used to these days. It was notable that neither YouTube nor Amazon Prime were included "partners" in the launch.
But... some people started noticing some problems: specifically, even those services that have not partnered with T-Mobile started seeing their own videos downgraded. The complaints started to flow on Reddit: someone noticed that Amazon-owned Twitch.tv's videos were suddenly being throttled. Others noticed YouTube videos being throttled. In both cases, those users were able to "fix" the problem by going into their account and turning off Binge On, but it still seemed troubling that T-Mobile had decided to automatically turn on Binge On for users, downgrading streaming video, even for video providers who had not agreed to such provisions.
Degrading video quality this way violates the FCC’s no-throttling part of the net neutrality rule, which forbids reducing the quality of an application or an entire class of applications. Even though T-Mobile and its brilliant CEO, John Legere, have done much to shake up the mobile industry in positive ways (they even won me over as a subscriber), this is one practice that the company should, and probably must, abandon.
As a purely legal matter, T-Mobile cannot easily defend its actions by arguing that this discrimination is good for its users. The FCC has already rejected that argument in advance by adopting a “bright-line” rule for all technical forms of discrimination absent some special technical justification. After hearing from millions of Americans throughout 2014, the FCC decided earlier this year that “the record overwhelmingly supports adopting rules and demonstrates that three specific practices invariably harm the open Internet,” and named one of them throttling.
YouTube, which is owned by Alphabet Inc., said T-Mobile is effectively throttling, or degrading, its traffic. “Reducing data charges can be good for users, but it doesn’t justify throttling all video services, especially without explicit user consent,” a YouTube spokesman said.
T-Mobile -- which has never been a fan of the new net neutrality rules, seems to think that because the service is "optional" that makes it okay. But that ignores two key things: (1) the FCC's rules say no throttling and (2) even if it is optional, T-Mobile turned it on for everyone, without telling users, and has not made it at all clear to users what's happening. That is, in every complaint you see online, you'll notice that people have no idea that this service has been turned on.
That makes it hard to square with the idea that this is for the benefit of T-Mobile subscribers. T-Mobile's only statement on this issue so far is also totally disingenuous:
In a statement, the No. 3 U.S. carrier by subscribers said its customers “love having free streaming video that never hits their data bucket” and like “both the quality of their video experience and the complete control they have.”
Again, this is T-Mobile exempting certain services from the data caps it set up itself. If customers love having streaming video that doesn't hit their data caps, then there are all sorts of ways to do that, which don't involve messing up the user experience overall, and without surreptitiously turning this system on in a way that messes up the plans of users.
Over the last few months, we've seen basically all of the major telcos look for ways to test the boundaries of the new net neutrality rules. At some point the FCC is going to have to smack them down or the tests are going to get more anti-consumer and more blatant. And, again, don't be fooled into thinking this is a "pro" consumer move in that it exempts data from the cap. That's like someone tackling you and then demanding to be called a nice guy for giving you a hand to get back up. The data caps are set by T-Mobile itself. The argument pretending that an exemption is somehow consumer friendly should immediately be spun around to point out that the caps themselves are then clearly anti-consumer.
Either way, one hopes that the FCC is actually paying attention, otherwise the telcos are going to keep moving to walk all over the new rules, with plans like this one, figuring out where and how they can throttle or prioritize traffic based on the providers' own needs, rather than based on what the internet allows.
The FCC's unwillingness to clearly ban zero rating as part of the net neutrality rules is starting to bite the agency -- and consumers -- squarely on the ass. Zero rating -- or the practice of letting some content bypass an ISPs' usage caps -- is seen by many to be a major anti-competitive problem, given the act of giving some companies cap exempt status puts everybody else at a disadvantage. That's why Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan have banned the practice.
But the FCC, in its infinite wisdom, decided that instead of banning zero rating, it would take a wait and see approach, addressing zero rating behavior on a case by case basis. And you can understand the logic; the FCC believes it's best to let ISPs experiment with what they insist are just creative new pricing models. The problem is one of precedent. Allow any form of zero rating, and you've already opened the door to the role of ISP as warden and gatekeeper. The other problem? The FCC's wait and see approach has so far involved doing absolutely nothing, even in the face of obvious anti-competitive behavior.
As a result, T-Mobile's now exempting both select video and audio streaming services from caps as part of its Music Freedom and Binge On programs. AT&T and Verizon's "Sponsored Data" programs charge companies a fee to have their content receive preferred, cap exempt status, putting any smaller companies that can't afford the fee at a disadvantage. Comcast has been slowly expanding its usage caps, then exempting its own content from them, giving it an unfair advantage against Netflix.
Though they vary in severity, all four of these companies are using their power as middlemen to potentially give some companies an advantage over others, the very thing our net neutrality rules were supposed to put an end to. Comcast's behavior is probably the most unapologetically anti-competitive of the bunch. Yet the FCC's response to most of these so far has ranged from total silence to outright praise.
Well, at least until last week, when the agency finally fired off letters to Comcast, AT&T and T-Mobile (pdf), asking them for more detail on zero rating plans that have been fully detailed for months (in AT&T's case, a few years). At an agency meeting last week FCC boss Tom Wheeler made it clear this was simply an inquiry, not an investigation, and the letter informs the companies the FCC's just looking to better understand what ISPs are doing (the agency was, apparently, in cryogenic storage all year):
"We want to ensure that we have all the facts to understand how this service relates to the Commission's goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources. We would also like to hear from you any additional perspectives you'd like to share about changes in the Internet ecosystem as a whole. To assist us in this review, we request that Comcast make available relevant technical and business personnel for discussions about the service with FCC staff, no later than January 15, 2016."
While the FCC moves at a glacial pace, Comcast has spent much of the year using broadband usage caps and zero rating for unfair market advantage. Again, Comcast is imposing unnecessary broadband caps in uncompetitive markets to hinder Internet video, then exempting its own streaming service from usage caps to penalize competitors like Netflix. So far, Comcast has argued this couldn't possibly be a net neutrality violation because the service spends significantly more time traveling over Comcast's managed IP infrastructure instead of the public Internet. It's a tap dance, and the FCC's response is timid and underwhelming.
If the FCC had clearly prohibited zero rating, it wouldn't have opened the door to Comcast's latest logical lambada. As we worried when the rules were crafted, leaving zero rating enforcement ambiguous opens the door to all manner of net neutrality violations -- just as long as an ISP is wearing the right tap dancing shoes.
Last year we noted that for being such a supposedly cool CEO, T-Mobile's John Legere seemed utterly clueless on the subject of net neutrality. Not only did the CEO claim that Title II and new net neutrality rules would "kill innovation" (tip: that didn't happen), he seemed totally oblivious to the bad precedent set by the company's zero rating efforts. Those efforts began with T-Mobile's decision to let some music services bypass user usage caps, which as we've discussed at great length puts smaller companies and non-profits at a distinct disadvantage.
But since our regulators (and much of the press and public) seem clueless to the harm of zero rating so far, T-Mobile has decided to expand these efforts. Last week the company started cap-exempting video services, and now the company has announced it's bringing zero rating to the company's prepaid wireless brand (MetroPCS) as well. Now the company's prepaid and postpaid (monthly billed) customers both will find that thirty-three of the biggest music stream services no longer count against their usage caps (yeah, sorry, small independent radio streaming stations too little to get on T-Mobile's whitelisted radar).
As usual, the move was framed as a huge boon to consumers:
“Once again we are setting MetroPCS apart from the rest of the pack in ways that no one else will,” said John Legere, president and CEO of T-Mobile US. “MetroPCS is the #1 brand in prepaid because we keep giving customers more of what they want, and today that means adding Music Unlimited and Data Maximizer to the list! Their data will last longer than ever before without ridiculous penalty fees or trickery!"
And like regulators, most of the telecom beat covering T-Mobile has been oblivious to the bad precedent set. They don't quite yet understand that letting a wireless carrier suddenly decide what traffic gets whitelisted from already-arbitrary usage restrictions sets the stage for a total upheaval of how the Internet works now. They also don't understand that if it's ok for T-Mobile to do this, it's ok for a company like AT&T to do something similar -- and AT&T's version is going to be notably worse. The Los Angeles Times, for example, struggles to see where the problem lies:
"Besides, there's nothing in the FCC's neutrality rules that bars data caps, which enable carriers to segment the market and charge higher prices to those who put a higher value on bandwidth. Binge On represents another reduction in the pain caused by data caps, which seems like an unalloyed good thing for consumers."
But you're not reducing a "pain point" by creating an arbitrary data cap, then letting some content bypass that cap -- you're just getting in the way of a healthy Internet ecosystem. And just because the FCC lacked the foresight to prohibit zero rating in our net neutrality rules (unlike Chile, Norway, Netherlands, Finland, Iceland, Estonia, Latvia, Lithuania, Malta and Japan, which all bar zero rating), that doesn't mean this isn't a potentially horrible idea that's going to change the face of the Internet. It's very clear that the perils of zero rating are something we're eager to experience first hand here in the States, applauding our own "great fortune" all the way.
As rumored, T-Mobile has unveiled its latest attempt to kick the nation's wireless duopoly in the shins: exempting video services from the company's wireless broadband usage caps. According to the company's latest press release, T-Mobile customers will soon be able to stream video from 24 participating partners without it counting against user usage allotments. The initial list of participating companies includes most of the usual suspects, with T-Mobile stating any notable omissions (like YouTube and Amazon Prime Streaming) will be added in time.
It's an obvious extension of the company's existing Music Freedom effort, which makes select music services cap exempt. That effort caused a bit of a net neutrality kerfuffle at launch, given that initially only the most popular music services (dictated by T-Mobile customer votes) were cap exempt. As is the problem with most zero rating programs, that immediately creates an unlevel playing field for smaller nonprofits and independents that aren't big enough to get onto T-Mobile's radar and be whitelisted.
But with Binge On, T-Mobile was obviously more prepared for the inevitable net neutrality criticism that somehow caught the company off guard last time.
This is "not a net neutrality problem,” T-Mobile US CEO John Legere was quick to proclaim during the announcement. "It’s free, the providers don’t pay, the customers don't pay. Most importantly...you can shut it off, it’s complete customer choice," he added. Users who enable the service enjoy "optimized" 480p video streams that don't count against their caps. Turn it off, and users will view standard, higher-resolution streams that will erode their usage allotments. Legere also promised that any company "can meet our technical criteria" (said criteria hasn't yet been specified) can participate.
As far as zero rated programs go, it's not an apparently awful implementation, and it's going to appeal to a lot of customers. The problem continues to be precedent. The simple act of accepting wireless carriers as middlemen fit to determine what should or shouldn't be allowed past arbitrary usage restrictions paves the way for a very uncertain future, as the Verge rather hysterically worries:
"Binge On is bad because it gives T-Mobile too much power. It’s really that simple. And yes, it’s bad for net neutrality. If net neutrality has a core idea, it’s that regular people ought to be in charge of the internet — especially since the internet is mostly just people. That means companies like T-Mobile shouldn’t be picking winners and losers, even if customers appear to be winning in the short term. And there are definitely going to be losers. Legere insists that anybody who wants to be a part of Binge On can be, as long as they meet T-Mobile’s technical specifications. It’s not clear what those specifications are yet, though Legere used words like "optimized video" and "DVD quality or better." But that just sounds a lot like another type of managed network: cable television."
"T-Mobile wants to suggest it’s saving customers by exempting video from its data caps. But we have to remember that T-Mobile imposed these caps in the first place. It’s a cheap sales trick: First you fabricate a problem for customers; then you make that problem go away and act like you’ve done them a huge favor."
And not everybody is as consumer-friendly and disruptive as T-Mobile. Allowing T-Mobile to inject itself into the data stream in this fashion encourages other wireless carriers to do so, and you can be damn certain that AT&T and Verizon's vision of zero rating will be notably more ham-fisted and problematic. Even if you admire T-Mobile's particular implementation of zero rating, small independents still have to reach out for T-Mobile's permission to be placed on the same, level playing field as their larger counterparts. Many may not even realize they're in such a position.
You'll probably see countless reports suggesting that T-Mobile's move is sure to "invite scrutiny by the FCC," but that's highly unlikely. T-Mobile's done a fantastic job of selling a potentially problematic precedent as consumer empowerment. Meanwhile, the FCC has made it abundantly clear it sees usage caps and zero rating as creative pricing experimentation, in the process opening the door wide to a lopsided vision of the Internet many will naively be cheering for.