Back in 2011, AT&T stopped selling unlimited wireless data plans, and began heavily pushing more expensive capped and metered plans. Existing unlimited users at the time were grandfathered, but the company engaged in all manner of sneaky behavior to try and make life as unpleasant as possible for these users, ranging from blocking them from using Facetime unless they migrated to metered plans, to heavily throttling these "unlimited" users after only consuming a few gigabytes of data. Ultimately AT&T faced a $100 million fine by the FCC (currently being contested by AT&T), and a 2014 lawsuit by the FTC for misleading consumers and dramatically changing the terms of service while users were under contract.
Originally we noted how AT&T had used a Schrodinger-esque attempt to derail the lawsuit by claiming that since it would soon be a common carrier under Title II of the Communications Act (something its lawyers fought and continue fighting to this day), it didn't technically qualify as a common carrier under the FTC Act. At the time, consumer groups like Free Press found AT&T's tap dancing rather funny:
"It is rich to see AT&T in two different appellate courts at once, simultaneously arguing in this case that its mobile broadband is a common carriage service -- and therefore not subject to FTC jurisdiction -- while telling the DC Circuit that AT&T's mobile broadband cannot be treated as a common carrier service."
Initially it seemed like the laugh would be on AT&T, with a court last year denying AT&T's motion for dismissal (pdf), ruling it was "unambiguously clear" that only AT&T wireless voice, not wireless data, was classified as common carrier when the lawsuit was filed last fall. But this week an appeals court in California contradicted this finding and dismissed the FTC's case entirely, the ruling (pdf) stating AT&T can no longer be held in violation of the FTC Act because it's now classified as a common carrier under the Communications Act:
"The common carrier exemption in section 5 of the FTC Act carves out a group of entities based on their status as common carriers. Those entities are not covered by section 5 even as to non-common carrier activities. Because AT&T was a common carrier, it cannot be liable for the violations alleged by the FTC. The district court’s denial of AT&T’s motion to dismiss is reversed, and the case is remanded for entry of an order of dismissal."
There's some indications in the ruling that the court wasn't sure that the FTC ever had authority over AT&T under the FTC Act (Title II or no). But it's still amazing to realize that AT&T was simultaneously arguing before two different courts that ISPs should not be classified as common carriers under Title II, while at the same time using this pending reclassification as grounds to dismiss the FTC lawsuit. Fancy footwork, that. AT&T may still face the $100 million FCC fine for lying to its customers, provided its lawyers can't tap dance out of that punishment as well. This all occurs, of course, as AT&T's lawyers and trade groups continue their original assault on Title II and the net neutrality rules Title II allowed.
While T-Mobile has certainly done some good things for the wireless industry, the company's ongoing tone deafness on net neutrality isn't doing the carrier any favors. T-Mobile fought against real net neutrality rules, then, once passed anyway, got right to work trying to find creative ways around the rules using zero rating (exempting only some content from usage caps). When net neutrality advocates and scholars repeatedly pointed out T-Mobile was violating net neutrality and being a bit hypocritical ("we're edgy and love consumers but not real net neutrality!"), the company dug a deeper hole by attacking groups like the EFF.
Last week T-Mobile upped the ante with new plans that promise "unlimited" data, but are not only more expensive, they throttle tethering, throttle overall consumption at 26 GB, and throttle all video to 1.5 Mbps or 480p. Users who want HD video to actually work correctly can apparently pony up $25 more per month. Emboldened by T-Mobile and a (so far) apathetic FCC, Sprint revealed similar "unlimited" data plans of its own, which throttle all video, games and music to 1.5 Mbps, 2 Mbps, and 500 kbps respectively, unless you pony up another $25 per month.
Groups like the EFF were quick to point out that installing ISPs as middlemen who get to determine how well your services work based on how much you pay in a marginally-competitive broadband market sets a horrible precedent. If regulators allow T-Mobile to charge more money for HD video to work, what stops Comcast from charging you more if you want 4K Netflix streams to work? Or AT&T deciding it can charge you more if you want your Steam games to download at full bitrate? This is a door that, once opened, won't be easily closed. And once this practice is a standard, it will be abused.
T-Mobile, for whatever it's worth, continues to be annoyingly tone deaf about the slippery slope it's dragging the entire industry toward. However bad zero rating was, the act of throttling entire classes of traffic unless you pay your ISP more money is notably worse. Highlighting how video conferencing isn't throttled but YouTube is, The Verge tried to get T-Mobile to define "video" and "data" but came away stymied:
"I asked T-Mobile for the company’s definition of "data" and a spokesperson said "that’s not something I could give you," but suggested that the company was on "the right side of history," and that the goal was to make "unlimited sustainable for the mass market." That’s an admirable goal! But let’s not dance around the fundamentals of the situation. Net neutrality is the law of the land, and T-Mobile has aggressively pushed the boundaries of net neutrality by manipulating the traffic on its network."
But again, violating net neutrality principles isn't the same as violating net neutrality rules, and the FCC's rules were carved out with numerous exeptions that allow all manner of throttling -- provided ISPs claim it's for the health of the network. That's why T-Mobile frames this as a matter of "sustainability," even though it's really about adhering to basic dictionary definitions and not selling an "unlimited" service if you're not actually willing to offer it. For a company that markets itself as a pro-consumer alternative to traditional wireless carriers, T-Mobile seems increasingly hell bent on continuing some of the industry's worst habits.
While the United States' net neutrality rules are certainly better than nothing, we've noted a few times how they contain enough loopholes (and ignore enough hot button topics) as to be more than a little problematic. More specifically, they contain so much wiggle room they let ISPs of all stripes violate net neutrality -- just so long as they're a bit more creative about it. Verizon and Comcast were quick to highlight this when they began cap-exempting their own content, while still penalizing their competitors (without so much as a real peep from the FCC).
T-Mobile pushed these creative barriers further with Binge On, which exempts only the biggest and most popular video services from the company's usage caps (aka "zero rating"). This automatically puts thousands of smaller video providers, non-profits, educational institutions and startups at a notable market disadvantage, but by and large nobody outside of the EFF and academia seems to give much of a damn because a: ill-informed consumers are happy laboring under the illusion that they're getting something for free and b: the public (and by proxy media) is lazy and tired of debating net neutrality.
But the door being opened here leads to a monumental, potentially dangerous shift not only in how broadband service is purchased and sold, but in just how open the internet of the future is going to be.
Last week T-Mobile moved the bar even further with its new T-Mobile One plan, which provides 'unlimited' data, voice and text messaging for $70 per month. Users generally don't like the plan because it's technically more expensive than T-Mobile's previous plans. But it's also saddled with caveats, such as the fact that tethering (using your phone as a modem or hotspot) is throttled to 128 kbps, 'unlimited' technically means 26 GB, and by default all user video is throttled to 480p or 1.5 Mbps by default. Unless users pay T-Mobile a $20 monthly surcharge for HD quality.
Emboldened by T-Mobile and an utterly comatose FCC, Sprint has taken this idea even further, last week unveiling its own not-really-unlimited "Unlimited Freedom" plan with its own set of annoying caveats. Tethering is forbidden, "unlimited" actually means about 23 GB before your full connection is throttled, and by default all video is throttled to 1.5 Mbps, all games are throttled to "up to 2mbps" and all music streams are throttled at "up to 500kbps." That's a god-damned generous definition of unlimited by any measure.
But rejoice, this week Sprint came up with a "solution" for customers who, you know, would like all the services they use to actually work. The company has announced a new "Unlimited Freedom Premium" plan that raises all these arguably arbitrary limits -- if you're willing to shell out an additional $25 per month:
"This plan provides a premium quality mobile streaming experience with HD streaming videos at up to 1080p+, HD music streaming at up to 1.5 Mbps and streaming gaming at up to 8 Mbps."
Again, so we're clear: this is an ISP forcing users to pay more money if they want the services they consume to actually work properly. That's the exact sort of thing net neutrality rules were supposed to prevent. Yet here we are, dancing on a slippery slope, staring down an incredibly fractured, confusing, and potentially exploitable new paradigm for the already uncompetitive broadband sector. And frankly, nobody seems to give all that much of a shit. Either because they're bored of paying attention, or they can't see a few plays ahead on the chess match between net neutrality advocates and large ISPs.
If Sprint and T-Mobile can charge users premium to avoid video, game and music throttling, what prevents Comcast from charging users a premium if they want 4K video streaming to actually work? What stops AT&T from charging users a premium if they want their Steam games to download at full speed? The answer? Nobody, apparently, since the FCC has made it abundantly clear it believes that usage caps, zero rating, and pay-to-avoid-throttling schemes are just creative market experimentation. Except the only creativity on display here involves marketers convincing consumers to root against their own best, self interest.
As noted above, net neutrality violations are still perfectly legal here in the States, you just need a little creative showmanship when shafting the consumer. The FCC's Open Internet Order (pdf) is chock-full of "rules" that don't apply if you provide a bullshit-laden technical justification about how you're only throttling "for the health and security of the network." But congestion has always been used by the telecom industry to justify all manner of bad behavior, including unnecessary usage caps on captive customers. And regulators and the press can rarely be bothered to fact check these congestion claims (remember the exaflood?).
And while spectrum constraints on wireless networks are certainly real, that's no justification for the sea change. If your network can't actually handle unlimited data? Either raise prices transparently to pay for the necessary upgrades, or stop marketing "unlimited" services. What we don't want is the telecom sector with a generation of documented anti-competitive behavior under its belt dictating just how well services perform based on how much users are willing to pay. Because make no mistake, without vibrant, organic market competition (which is only marginally better in wireless) they will abuse the concept like an insatiable swarm of termites.
Initially, I assume both T-Mobile and Sprint will try to argue that this isn't that big of a deal, because users can always switch to metered plans that don't involve charging you more money for un-throttled services. At least until those other plans quietly disappear over a period of months, and paying a premium to actually use content the way it was intended is all the consumer has to choose from. And given that the majority of the public has no idea what a gigabyte even is, these new caveats and the horrible precedent they set will fly (and are clearly flying) right over their collective heads.
I understand that net neutrality is a convoluted and hyperbole-heavy debate that has gone on for more than a decade. As such there's clearly plenty of people happy to labor under the illusion that last June's FCC net neutrality win was the end of the conversation and they can take a nap. It's not, and they can't. We'll be fighting for an open internet for as long as ISPs keep trying creative ways to abuse the lack of last-mile broadband competition. In other words, forever.
For some time now T-Mobile has been accused of violating net neutrality by exempting the nation's biggest video services from its usage caps, and throttling all video on the network by default to 1.5 Mbps or 480p. Net neutrality advocates have repeatedly warned that giving some content or companies a leg up and fiddling with service quality sets a horrible precedent, and research has shown T-Mobile's system to be unreliable and exploitable. Still, T-Mobile has so far received applause from many regulators, media outlets and customers operating under the belief consumers are getting something for free.
As such, however bad the precedent being set here, there's no real political pressure on the FCC to act since consumers are effectively applauding what many believe to be a net neutrality violation. The FCC's net neutrality rules don't specifically prohibit zero rating, something we've long argued opens the door to creative abuses of net neutrality to thunderous applause, which is effectively what's happening here. The rules do require the FCC to explore whether zero rating is anti-competitive on a "case by case" basis, but so far, outside of a few letters, the FCC doesn't seem particularly pressed to take action.
Last week, T-Mobile introduced a new wrinkle to the entire saga by unveiling a new plan named T-Mobile One. Under T-Mobile One, users get "unlimited" data (technicaly 26 GB, after which you're throttled to 128 kbps), text and voice for $70 per month. But under this new plan, users find all video services throttled by default to 1.5 Mbps or 480p. If you want to stream video at any higher rate, you'll need to pony up an additional $25 per month. Groups like the EFF were quick to argue that the new plans still violate net neutrality:
"From what we’ve read thus far, it seems like T-Mobile’s new plan to charge its customers extra to not throttle video runs directly afoul of the principle of net neutrality," said EFF senior staff technologist Jeremy Gillula.
Right, but violating net neutrality principles and net neutrality rules is not the same thing. It's generally believed the FCC didn't crack down on T-Mobile's original plans because the FCC's Open Internet Order (pdf) not only didn't ban zero rating, but it stated that some throttling is ok if it's "a choice made by the end user." Because users could opt out of T-Mobile programs Binge On and Music Freedom, T-Mobile had creatively managed to inhabit an area not really outlawed by the agency's net neutrality rules.
...Gillula argues that the throttling of all video might violate the rule, despite the option to pay for high-speed video. He pointed to a sentence later in the same paragraph that says, "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."
"If you just substitute 'video' in for 'VoIP,' it's pretty clear that the FCC's intent was to prevent discriminatory throttling, even if the user could pay to avoid it," Gillula told Ars. "In other words, the FCC (and EFF) are just fine with ISPs offering different tiers of service, as long as the tiers don't discriminate against different types of content. But that's precisely what T-Mobile is doing here—discriminating against data based on its content."
Given past statements one gets the sense that the FCC isn't all too worried about the obvious, problematic impact usage caps and zero rating may have on the open Internet. But we're quickly getting to the point where the FCC needs to at least help detail where the line is drawn, one way or another. T-Mobile's experiments last week resulted in Sprint unveiling similar "unlimited" data plans of their own, which also throttle all video to 480p by default unless you pay a premium for higher resolution. But you'll note Sprint goes even further:
Unlimited Freedom utilizes optimization for streaming video, gaming and music, delivering a high-quality viewing experience for mobile devices with video streams of up to 480p resolution, gaming up to 2mbps and music streams at extreme quality of up to 500kbps.
If you'll pause with me at the very top of this long and slippery slope and look down, folks with even the faintest tea leaf reading ability should be able to envision one possible future where all broadband access is fragmented and fractured in just this fashion, users paying more or less for varying qualities of different content and services. This was, if you'll recall, the sort of thing net neutrality rules were designed to help us avoid. T-Mobile opposed Title II and real net neutrality rules for obvious reasons, and groups like the EFF (quite correctly) worry T-Mobile is now happily chipping away at the very foundation of an open internet...to thunderous public applause.
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 Szóka. “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.
Last year you'll recall that T-Mobile launched its "Binge On" zero rating program, which exempts the biggest video services from the company's usage caps (aka "zero rating"). Net neutrality advocates quickly complained that the practice violated net neutrality, since the very act of giving some companies an advantage automatically disadvantages some others. After T-Mobile spent some time lying about the nature of the program, the EFF came out with a detailed report noting that T-Mobile was just throttling all video files back to 1.5 Mbps, whether the content was being streamed or directly downloaded.
Net neutrality advocates like the EFF argued that the program at the very least should be opt in instead of opt out, concerns that T-mobile continues to ignore. YouTube similarly initially complained about the program and that video partners were being throttled by default. But in a matter of months, Alphabet/Google appears to have completely changed its mind, issuing a new blog post that says it's now partnering with T-Mobile to zero rate Google Play Movies and YouTube content traveling over the T-Mobile network.
According to YouTube, T-Mobile made a number of changes to Binge On that satisfied YouTube's concerns, including new "short codes" that let users more easily opt out. T-Mobile also apparently was willing to listen to YouTube's concerns about throttling partner services by default with no dialogue between companies:
"While T-Mobile has always stated that any video service can join the program at no charge, prior to our discussions, video services were not given a choice about whether their streams would be managed by T-Mobile if they did not join the program. Going forward, any video service meeting traffic-identification requirements will be able to opt-out, and T-Mobile will stop including them in the Binge On program and will no longer modify their video streams. In addition, T-Mobile will now work with video services that wish to optimize their own streams, using an average data rate limit. This allows video services to offer users an improved video experience, even at lower data rates, by taking advantage of innovations such as video compression technology, benefiting T-Mobile, their customers, and video providers.
To be clear it's good that T-Mobile is being slightly more transparent, even though it lied pretty consistently about what it was actually doing in the first place. It's also great that the company is providing better, simpler opt-out tools for consumers (dial #263# to turn Binge on off, and dial #266# to turn it on again). And it's also a major improvement that T-Mobile's letting video service providers opt out, while giving companies more control over precisely how video traffic is managed. The problem is that none of this solves the core problem with zero rating: the horrible precedent set by zero rating in the first place.
The superficial consumer lure of "free data" overshadows the fact that zero rating, no matter how much lipstick you put on it, still puts some companies at a market disadvantage. In a press release announcing YouTube's inclusion, T-Mobile crows that there's now 50 Binge On video partners. But how many video services exist on the Internet? 500? 1000? How many non-profits, educational services, startups, and independents still aren't being whitelisted by T-Mobile's systems? How many even realize they're being put at a market disadvantage to bigger companies?
By opening the door to zero rating a sliver, we've opened the door to fundamentally changing how Internet business works. That's why numerous regulators in India, Japan, The Netherlands and elsewhere have banned zero rating outright. Here in the States, the FCC, wary of hindering usage cap driven "innovation," decided to let the zero rating story play out, addressing anti-competitive behavior on a "case by case basis." But the FCC has failed to act, and that failure has not only resulted in T-mobile's Binge On (potentially bad), but companies like Verizon and Comcast now exempting their own content from caps (immeasurably worse).
Despite its faux-punk-rock consumer friendly rhetoric, T-Mobile has never been a fan of net neutrality, repeatedly coming out against both net neutrality rules and the FCC's Title II push. Google, once a net neutrality champion, has consistently weakened its position on the subject as it realized it too could benefit from a distorted playing field (especially in mobile).
Because users get "free data" doesn't mean zero rating is a good idea. Because YouTube's now happy that it has a little more control, doesn't make zero rating a good idea. Because users and companies can opt out, doesn't negate zero rating's negative impact on the Internet economy. Because all-too-many consumers, analysts and journalists don't really understand what's happening here doesn't make zero rating a good idea. Setting arbitrary usage caps and then letting some companies bypass them aggressively distorts the entire landscape of the Internet. But because so many folks still don't appear to understand this, we're down the zero rating rabbit hole. And it's not really clear if we're ever coming back.
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.
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.