Data Limits & Data Freebees: New Creeping Threats to Net Neutrality?
Earlier this year, the Federal Communications Commission voted in favor of stronger rules to keep Internet service providers from favoring some data traffic on the Internet over others. The February FCC decision was hailed as a victory by Net Neutrality advocates, or those who believe that the only free Internet is one where "all data is treated equally" by the companies that transmit it.
But now, there may be a new threat to Net Neutrality being introduced by fits and starts, often in the guise of perks for customers and their wallets.
This week, two different ISPs in two different markets announced data freebies for customers who want to stream video: T-Mobile announced Binge On feature, offering a handful of streaming apps that won't go against customers' data caps, while Comcast announced its latest streaming video service, Stream TV, which also wouldn't count against customer data caps.
So if T-Mobile and Comcast are not metering streaming video, why is this a problem?
Immediate Benefits to Customers
On the face of it, Comcast free streaming service and especially T-Mobile's multi-app offering are of immediate benefit to their customers.
T-Mobile's Binge On, for example, is a free add-on to its "Uncarrier" offerings that gives users unlimited streaming from Netflix, HBO Now, Hulu, Sling TV, and Watch ESPN, among a list of about dozen other third-party video apps, without going against their data limits.
For mobile-first Latinos, the data freebie (known as "zero-rating") could be quite beneficial. When I asked about the possibility of working with wireless carriers to zero-rate Sling TV and Sling Latino in a Q&A earlier this year, Sling CEO Roger Lynch told me that "there is a natural symbiotic relationship between" his streaming video app and mobile carriers. He adding that it wouldn't "surprise" him if a partnership evolved to help customers avoid data caps. What's wrong with that?
Currently the FCC has no rules against zero-rating, and on Thursday Chairman Tom Wheeler -- previously an unlikely hero for many Net Neutrality supporters -- stated he thought T-Mobile's move was "highly innovative and highly competitive." But he also added that he would be "keeping an eye" on it, according to Bloomberg.
'Scarcity' and Loopholes
The problem, as I have alluded to previously when bandwidth was the issue, before the FCC squashed the concept of "fast lanes" altogether, the problem is one of ISPs imposing artificial scarcity and playing favorites.
Comcast: Cap-tain Obvious
Let's start with Comcast, since of course, more people are prone to distrusting one of the lowest-rated companies in the U.S. for customer service.
First of all, artificial scarcity: Comcast didn't used to cap customers' data plans at a certain number of gigabytes per month. Now, the company is only rolling out the caps in small chunks at a time.
The company's soft-pedaling it as a "market trial" each time it expands data caps -- along with the way it announces it to customers, by saying it has "raised" your data allotment from the (previously unenforced) 250GB per month to (a now in effect) 300GB limit -- underlines how Comcast knows its customers will react. It knows it is imposing new limits and artificial scarcity.
Once there's a limit on previously unlimited data, Comcast can introduce its zero-rated Stream TV service, which gives Comcast an advantage over competitors like Netflix and Sling TV.
The playbook is simple: Impose scarcity, and then promote loopholes (which happen to only favor your company).
T-Mobile's Blurry Binge On
The case of T-Mobile, as Wheeler's reaction implies, is a little more ambiguous from a Net Neutrality perspective.
Wireless customers, firstly, have gotten used to data limits (since truly "Unlimited" data plans have gone the way of the dinosaur years ago), and it seems more natural for wireless Internet to have an in-built component of scarcity than wireline ISPs.
Secondly, T-Mobile isn't zero-rating "T-Mobile TV" or something.
The company is not acting as obviously anticompetitive as Comcast is: all of the free video streaming apps are competitors against one another, and there's a great deal of them included in the offer.
But consider this: YouTube isn't included in Binge On.
Of course, you may not feel bad for a company like Google missing out on the potential bump in traffic that data-cap free streaming like Binge On could provide it.
But what about a hypothetical upstart video streaming service that could maybe disrupt the streaming market with some incredible innovation -- if treated fairly, if allowed to compete? That startup isn't, and likely wouldn't be included in Binge On. It's not an established, popular customer choice. And it maybe never will be, since T-Mobile is incentivizing its customers to ignore it, along with YouTube, Facebook videos, and many others.
The Litmus Test
Ultimately, if you see a new plan, a new offer, or policy that limits what you used to do or offers you loopholes on your limits, just ask the question: Am I making the choice here, or is the company that provides my Internet deciding what's better, freer, or easier to use?
The answer will tell you whether or not that move threatens Net Neutrality.
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