I kinda feel bad for the PR people at T-Mobile. This morning, CEO John Legere put out a completely bullshit statement pretending to respond to the accusations that its BingeOn program is throttling online video. It didn't address the actual issues, made statements that were clearly false, and then accused people questioning the program of being "jerks." That seemed weird, considering the widespread concerns about all of this combined with T-Mobile's attempt to brand itself as the only consumer friendly mobile service provider.
But, if you really wanted to undermine the idea that you're a "consumer-first" operation that "cares about the open internet" and had to pick one group that you shouldn't go off on an unhinged rant about, you'd probably pick EFF. The group, which has been around forever, is somewhat famous for its willingness to fight for the public's digital rights, and unwillingness to compromise its beliefs. It has regularly sued or challenged numerous big companies that have undermined privacy and the open internet, including AT&T and Google.
After giving a misleading response to the actual question, talking about "selecting the bitrate" (which is throttling not optimization), he then gives a little smile and says:
Part B of my answer is: Who the fuck are you anyway EFF? Why are you stirring up so much trouble and who pays you?
This has immediately resulted in widespread mocking across Twitter, with many people tweeting to Legere that they fund EFF and they care a lot more about EFF than T-Mobile:
@JohnLegere /I/ pay @EFF. And I pay T-Mobile. Take care: /one/ of those two things could change really quickly, and it isn't the EFF one.
I've emailed T-Mobile's PR people to find out if Legere really doesn't know what EFF is, or if he really thinks that EFF is somehow a front group for a company attacking T-Mobile. I doubt I'll hear much of a response. But if Legere wanted to totally undermine his pro-consumer position in a single sentence, I don't think he could have picked a much worse one than what he actually came out with.
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.
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."
Consumer groups like Free Press also make the solid point that if you realize that caps are entirely arbitrary in the first place (untied to neither financial or network necessity), letting select services bypass them quickly loses its majesty:
"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.
1.
not limited; unrestricted; unconfined:
unlimited trade.
2.
boundless; infinite; vast:
the unlimited skies.
3.
without any qualification or exception; unconditional.
While carriers have long insisted they offer "unlimited" data, they go to great lengths to avoid offering said advertised product when the gluttonous masses inevitably come calling to partake in the all-you-can-eat buffet. Countless companies have had their wrists slapped for the failure to disclose that their "unlimited" plans are in fact quite limited. Verizon settled a lawsuit from NY's AG back in 2007 for advertising capped and throttled services as unlimited. When Verizon and AT&T later ditched all unlimited plans, they both still waged a quiet war on unlimited users, again throttling or otherwise restricting their data consumption.
In recent years T-Mobile has taken advantage of this shift and marketed itself as one of the last companies that truly embraces unlimited data. Well, sort of. If you sign up for an unlimited T-Mobile smartphone plan, T-Mobile's website will quietly inform you that by "unlimited" T-Mobile actually means 21 GB, after which (provided you're on a congested tower), you'll have your speeds "de-prioritized" for the remainder of your billing cycle. Customers that sign up for unlimited data are also greeted with this notice, usually down below the advertisement:
So under T-Mobile's "unlimited" plans, unlimited smartphone use may actually be somewhere around 21 GB, while data consumed when tethering the phone as a modem or hotspot is throttled after 7 GB of consumption. Now to be fair, those allotments are pretty generous. And as carriers are quick to argue, the fact that you can still use data beyond those limits (albeit at reduced speeds) still technically means the connection is "unlimited." But the industry's still playing it a little loose with what is a clearly-defined term (I've underlined the key synonyms above if any confused carriers are reading).
For a while now, T-Mobile customers that install third-party ROMs have been able to skirt the 7GB tethering throttling limit. This has, apparently, greatly annoyed T-mobile CEO John Legere, who has taken to the company's blog to declare he's now hunting down data "thieves" for the benefit of all mankind:
"...These violators are going out of their way with all kinds of workarounds to steal more LTE tethered data. They’re downloading apps that hide their tether usage, rooting their phones, writing code to mask their activity, etc. They are “hacking” the system to swipe high speed tethered data. These aren't naive amateurs; they are clever hackers who are willfully stealing for their own selfish gain."
According to Legere these "clever hackers" only comprise around 1/100 of a percent of the company's 59 million customers, and a few of them have been eating as much as two terabytes a month of data. So why is T-Mobile making so much noise about a small number of customers it could easily shove to metered plans privately? T-Mobile's trying to get out ahead of media criticism for imposing limits on "unlimited" data, and to avoid the FCC's net neutrality and transparency rules by clearly stating intent (even if the T-Mobile FAQ on the issue doesn't really offer technical specifics).
It should be noted that every ISP on the planet has to deal with a small subset of extremely heavy users. This is nothing new, and if T-Mobile had said nothing, people probably wouldn't have given a damn. But after insulting his userbase, Legere proceeds with false bravado to pretend that the perfectly ordinary practice of protecting the network from gluttons somehow makes T-Mobile an industry leader:
These abusers will probably try to distract everyone by waving their arms about throttling data. Make no mistake about it – this is not the same issue. Don’t be duped by their sideshow. We are going after every thief, and I am starting with the 3,000 users who know exactly what they are doing...I won't let a few thieves ruin things for anyone else. We’re going to lead from the front on this, just like we always do. Count on it!
Good job I guess?
To be clear: outside of its wishy-washy net neutrality stance I like T-Mobile, and think the company has done some great things to nudge the industry forward (like killing subsidies and reducing overseas roaming costs). I also think these allotments are more than fair for the price being paid, and T-Mobile has every right to police its network, since two terabytes of mobile consumption is gluttonous by any standard. That said, acting like it's the pinnacle of "clever hacking" and villainy to modify a device you own to get a service advertised as unlimited is a tad specious and theatrical. And Legere's decision to subsequently bicker with users on Twitter for the rest of the day wasn't the "uncarrier's" finest PR hour:
@LEVST3R as I said the abusers will try to confuse the issue and this is one of the ways..nice try
Snark, fanboys and fisticuffs aside, the core of the problem continues to be the use of the word unlimited to sell products that simply aren't. Since the first time the term was marketed it has confused the hell out of users who don't understand that in the age of finite spectrum, intelligent network management and hungry bean counters, there really is no such thing. If you're not willing to offer truly unlimited data (and frankly no spectrum-constrained wireless carrier truly is), stop advertising unlimited data, put your next-best offer clearly on the table, and stop molesting the god-damned dictionary.
Sprint was the only one of the big four carriers to clearly support Title II and full net neutrality rules, but since the rules' passage the company's behavior has been a little bit strange. Last week, Sprint announced a new "All In" promotion that offers new users unlimited text, voice and data for $60 a month, plus a $20 device lease fee. The plan was supposed to be the company's game changing assault on current industry darling T-Mobile, but Sprint curiously included a small caveat in the fine print of the program; absolutely all video going over the Sprint network would be throttled to 600 kbps regardless of network congestion:
"To improve data experience for the majority of users, throughput may be limited, varied or reduced on the network. Streaming video speeds will be limited to 600Kbps at all times, which may impact quality. Sprint may terminate service if off-network roaming usage in a month exceeds: (1) 800 min. or a majority of min.; or (2) 100MB or a majority of KB."
Users quickly made it clear that they weren't interested in an "unlimited" data plan with such limits, forcing Sprint CEO Marcelo Claure -- who claimed he was asleep in Tokyo during all the ruckus -- to reverse course and remove the 600 kbps limit. This flub came after the company's CEO had been making it perfectly clear Sprint is planning to kill unlimited data entirely, one of the few things people actually like about Sprint. In short, Sprint's trying very hard lately to act like the more-disruptive T-Mobile, but as the uncool "dad jeans" of the wireless sector, isn't quite sure how to go about it.
With the company's promo arriving with a thud, Sprint apparently tried to mimic T-Mobile in another way: mirror the trash-talking of T-Mobile's brash CEO John Legere. Sprint's Claure quickly decided the best course of action would be to head to Twitter and insist that T-Mobile's recent "uncarrier" efforts (specifically its handset early-upgrade program) were little more than finely crafted bullshit:
@JohnLegere I am so tired of your Uncarrier bullshit when you are worse than the other two carriers together. Your cheap misleading lease
The problem is that T-Mobile's amusing uncarrier efforts (which have included eliminating device subsidies, hidden fees, and other industry pain points) have been working. The magenta-hued carrier has been adding more new subscribers per quarter than any other U.S. operator, feeding a desperate consumer desire for better deals and less fine print. Sprint, meanwhile, has labored in last place in most network performance and customer satisfaction studies. As such, offering up some bullshit, then deriding other companies for engaging in bullshit, probably isn't the best way to reverse those lagging fortunes.
We've noted more than a few times how T-Mobile has been slowly improving the wireless industry by doing something outrageous: giving customers things they actually want. So far that's included unlimited data options at a time when the bigger carriers have embraced caps and steep overages -- and a move away from the old subsidized handset model, where users can now often buy handsets outright or subsidize them over payment plans. While some of the actual pricing promotions have been cosmetic in nature, there's no doubt that T-Mobile's consumer-friendly policies and wise ass CEO have been a great thing for the industry.
The latest example of T-Mobile disruption is its recent introduction of roll over data, a common sense approach that lets users store their unused monthly data allotments for future use in what T-Mobile calls a "Data Stash." It's certainly not a revolutionary idea, and it's not even original in the last month (a Southern wireless provider named C Spire offered the option a week or two before T-Mobile), but in a wireless industry dominated by just two players, we're at the point where god-damned common sense is the very height of innovative disruption.
Enter AT&T, bloated and groggy from decades of regulatory capture and unfamiliar with real competition (despite what groups like the CTIA claim). AT&T's been quietly admitting it's starting to feel the pinch from T-Mobile's shenanigans, which is of course precisely why AT&T tried to acquire and eliminate T-Mobile several years ago, and why regulators stepped in to block it.
Now forced to at least pretend to compete, AT&T this week introduced its own roll over data program, though in traditional ham-fisted AT&T fashion it has more than a little fine print. Unlike T-Mobile's plan that lets you store unused data bytes and bits for up to a year, AT&T lets you store your roll over data for all of one month. Worse perhaps, before you can even use your rolled-over data you have to first burn through your primary data allotment. Meanwhile, much like it did when AT&T pretended its very limited 1 Gbps offerings in Austin wasn't an obvious response to Google Fiber, AT&T is busy telling some reporters that this me-too effort (a poor one at that) has nothing whatsoever to do with T-Mobile.
It's another example of AT&T trying to fake and head bob its way past competition, in the process walking face first into T-Mobile's attempts to make the company look stupid. Amusingly, in an end of 2014 prediction blog post, T-Mobile CEO John Legere found it pretty easy to predict AT&T's behavior:
"AT&T will find new ways to cause their customers pain - especially those still on grandfathered unlimited plans. Just to squeeze more money out of them. (Meanwhile, we’ll keep embracing unlimited.) I’m also betting AT&T will introduce a weak Data Stash™ knock off – but the fine print will be massive, and they’ll miss the first and most important step in the process – which is to stop punishing their customers with domestic overages and instead get rid of them."
Again making AT&T look bad isn't hard, since AT&T is the one doing most of the heavy lifting. Legere quickly took to Twitter to mock AT&T for its efforts, in turn scoring even more PR points among consumers annoyed by AT&T and Verizon:
Only day 7 of 2015 and my predictions are coming true! Want to bet they won't give you 10GB to start or end overages? http://t.co/MyTQvGDU5l
It's perpetually entertaining to watch T-Mobile dismantle a giant by doing little more than treating consumers well and then just sitting back and waiting for AT&T to do something stupid. Of course with AT&T and Verizon's bottomless lobbying pockets, stranglehold on spectrum reserves, dominance of 80% of the wireless retail market and an even greater dominant share of the special access (cell tower backhaul) market, being a pain in the ass can only get T-Mobile so far. Still, it's progress for an industry that has spent ten years pantomiming what competition actually looks like. As T-Mobile and Sprint (not to mention the ocean of smaller MVNOs) gain their footing, pretending to compete is simply not going to be good enough for the nation's dopey duopoly.
Back in June we noted how T-Mobile had unveiled a new "Music Freedom" program that exempts the biggest music streaming companies from T-Mobile's usage caps. When introduced at the time, T-Mobile pitched the idea as a huge win for consumers, as you could listen to say -- Spotify -- without worrying about eroding your usage allotments. T-Mobile also insisted that if your favorite service isn't included, you can just Tweet T-Mobile to have it whitelisted for cap exemption. Sounds like a great deal for everybody, right?
Well, no. Imagine you're one of the thousands of smaller streaming services or non-profits arbitrarily deemed too small to get on the cap-exemption list. You're suddenly facing a steeper competitive slope than ever before, given that larger companies' services are excluded from the cap and yours aren't. Whereas T-Mobile should be delivering all bits equally, by injecting themselves into the middle, they've tilted the playing field against small operations and non-profits. Meanwhile, begging the company via Twitter for inclusion is far from a transparent process. Furthermore, in doing this, T-Mobile is quite clearly admitting that the data caps it puts on are artificially low, harming consumers by charging them extra if they happen to use a higher bandwidth service that hasn't buddy'd up with the company.
At the time it was announced, ultra-hip T-Mobile CEO John Legere was "genuinely surprised" by the criticism from neutrality advocates, arguing that because nobody was paying T-Mobile to bypass the caps -- it couldn't possibly be a neutrality violation. Judging from this recent Reddit conversation, many consumers are confused as well, and are quite eager to root against their best self interest. The FCC has also made it clear they think this is simply "creative pricing," and won't be prohibited by the agency's new neutrality rules.
But because consumers, hipsteresque CEOs and regulators don't understand what's happening doesn't make it less true: T-Mobile's idea (and AT&T's similarly-minded sponsored data effort) sets horrible precedents by letting carriers artificially inject themselves into a content and service ecosystem that is healthier with them out of the way. Accept the idea that carriers can use caps in such a discriminatory fashion, and you're opening the door to a world of aggressive and anti-competitive behavior.
This week T-Mobile announced they've added a few more small services like Google Play Music and SoundCloud, bringing the total list of cap-exempt services to 27 (how many streaming music, audio services, radio stations and podcast broadcasts exist in the world again?). Meanwhile, Legere seems no more enlightened as to why setting arbitrary usage limits then exempting only some companies isn't really a good idea, patting himself on the back for being so pro consumer:
"Music Freedom is pro-consumer, pro-music and pure Un-carrier," said John Legere, president and CEO of T-Mobile. “And today we’re taking another huge step toward our ultimate goal of including every streaming music service in the program. Anyone can play. No one pays. And everyone wins."
Except again, not everybody wins. Does a small independent streaming radio station too little to meet T-Mobile's invisible interest threshold for whitelisted services "win" if their bits are counted against the cap, but the bytes of Pandora aren't? Net neutrality is about carriers getting out of the way, not erecting annoying new arbitrary systems of control and monetization. T-Mobile has made some great, pro-consumer moves of late, but this isn't one of them. The company either doesn't understand that "Music Freedom" tramples all over net neutrality, or they understand this all too well and simply hope consumers are too stupid to notice.
Ever since regulators rejected AT&T's dodgy acquisition justifications for the T-Mobile deal, T-Mobile has taken on new life, disrupting the wireless sector with a number of consumer-friendly policies that have included dismantling the traditional subsidized phone model. A big part of that consumer-friendly attitude has come in the form of CEO John Legere, whose often hilarious foul-mouthed tirades, Twitter rants and faux-punk rock attitude are a welcome change from the mindlessly-optimistic and rote recitations of most CEOs.
At the same time, more than a few people have pointed out over the last year that Legere (whose career started with a twenty-year stretch at AT&T and a notably more stodgy stint as Global Crossing's CEO) is really just performing a cartoon caricature whose revolutionary spirit only goes so far. Prime examples are not only the company's private admissions that it's loathe to compete on price, but also Legere's un-nuanced positions on net neutrality, illustrating the CEO is immeasurably more status quo than his persona would have the tech industry believe.
Earlier this year, T-Mobile announced with great fanfare they'd be exempting the most popular music services from the wireless company's usage caps. We were quick to point out that while perhaps appealing superficially to consumers, this practice violates net neutrality by giving larger, more popular services a leg up over smaller, less-known competitors. T-Mobile was also criticized by Public Knowledge for exempting speedtests from the company's caps in order to mask the company's throttling practices. At the time, Legere was "genuinely surprised" by the criticism, arguing that because nobody was paying T-Mobile to bypass the caps -- it wasn't a neutrality violation.
Fast-forward to this week, and Legere is showing again that he really doesn't understand what fundamental net neutrality is really about. Responding to the President's surprise unequivocal support of Title II reclassification, Legere went on quite a Twitter tirade about the perils of "overzealous" regulation, proclaiming that weaker, legally-dubious Section 706 rules were better than the Title II approach, because, well, "innovation!"
Don’t let the gov’t kill innovation. It has made us the fastest growing wireless company in America. #netneutrality
In short, you've got a "pro-consumer" company that only exists because regulators prevented a duopoly from eating it -- complaining about regulatory intervention that's necessary to protect consumers from duopoly. As The Verge did an excellent job pointing out, Legere's simply engaging in "classic regulatory doublespeak" in order to protect his company's right to enact aggressive and anti-consumer pricing models sometime down the line. For examples of this ambition, you only need to look toward T-Mobile US's sister operations under Deutsche Telekom in Hungary, where T-Mobile recently started charging users more to access select content and services:
"Here’s how it works. T-Mobile offers access to areas of the Net to its users for a fixed fee per month. So for €5, for instance, a user may be able to use Spotify for the month; he or she can browse the open Internet at night for €10; and it can access DT’s IPTV for €3.20 per DAY. It looks like an a la carte cable company menu and it just breaks every possible rule and/or understanding of the way the Internet should be priced and nurtured."
While T-Mobile US's efforts are decidedly less ham-fisted than this, they're no less of an example of a carrier using arbitrary usage caps to fiddle with the user experience to its own ends. It's also a prime example of how easily people can be fooled into signing off on neutrality violations under the guise of creative pricing, and how rules need to be very clear in prohibiting this kind of behavior -- regardless of whether or not it's presented under a shiny veneer of purportedly consumer-friendly, ultra-hip paint.
Our general rule is that we ignore press releases, because they're fake news. People still send them to us sometimes, but I've got a pretty good email filter that filters them right into the trash. Every so often there's an interesting press release, but it's rare. It's even rarer from a large company. Rarer still: an interesting press release from a telco. And yet, here's T-Mobile with what may be the best press release you'll ever see from a phone company, outright ridiculing AT&T's plan to offer T-Mobile customers $450 to switch to AT&T. To be fair, T-Mobile, which has basically been the also-ran of the mobile world for years, has decided in the past year or so that the best strategy to change that is to basically do pretty much everything differently than mobile operators have done in the past, bucking lots of trends with concepts that are actually (gasp!) consumer friendly. It's kind of shocking to see a phone company come to the conclusion that, hey, perhaps treating customers right is a competitive advantage, but it does appear that T-Mobile has (to some extent) embraced that concept.
And then there's this press release. At the beginning of January, AT&T directly began offering T-Mobile users $450 to switch. Apparently the company has realized that if it can't buy T-Mobile directly, it might as well just buy its customers. Now, most companies when targeted by a larger competitor in this manner might sort through a variety of responses, and I'm sure at some point, perhaps late at night under the influence of an extra alcoholic beverage or two, someone might suggest the following. But to actually go ahead with it... well... that's a bit bold. In short, T-Mobile flips the offer on its head, noting that since it only applies to T-Mobile users, AT&T users now have a "risk free" way to test out T-Mobile -- and they throw in hilarious fake quotes from AT&T Mobility's CEO, Ralph de la Vega, mock the "death star" and a variety of other things you don't normally see in a telco press release -- such as comparing de la Vega to Darth Vader.
T-Mobile US, Inc. (NYSE: TMUS) today announced that pretty much everyone at the company is overcome with emotion and still kind of processing the decision by now-ex-rival AT&T to leave the dark side, step into the light, and join hands in supporting the Un-carrier consumer revolution.
“Call it an awakening,” said Ralph de la Vega, president and CEO of AT&T Mobility, “but I felt it was time to really stir things up and put the customer first for a change. And by “customer” I’m referring to our former customers who switch to T-Mobile, because our current customers don’t really qualify.” De la Vega said that the new T-Mobile switching offer was custom designed to entice its millions of contract customers to go ahead and give T-Mobile a try. “If for any reason you don’t love T-Mobile’s 4G LTE network, which is now faster than ours[i], we’ll actually pay you up to $450 to come back to AT&T, I kid you not.”
Ok, De La Vega didn’t actually say that, but he might as well have. Thanks to AT&T’s apparent change-of-heart and incredibly generous $450 T-Mobile customer buy-back campaign, insane numbers of its very own customers and even families of AT&T employees are enjoying a risk-free, zero-cost opportunity to switch to the Un-carrier. If customers making the switch are not completely satisfied with T-Mobile and its state-of-the-art nationwide 4G LTE network (now fastest in the U.S.)i, AT&T will cover the costs for customers switching back to their own slower network, up to $450 with trade-in[ii]. Details of the new AT&T offer can be found at att.com/att/switcherpromo.
“Wow. I mean … wow,” breathed John Legere, president and CEO of T-Mobile. “I guess we all have moments of doubt. You know? Like, can the darkness ever be defeated? But that they’ve singled us out in this way is just so affirming. I guess we must be doing something right. I mean, if AT&T can change, it feels like anything’s possible.
“It’s kind of like that scene where Darth Vader’s lying there and Luke helps take off his helmet,” Legere continued, “and you see that, okay, sure, Darth Vader’s pretty ugly, but he’s human after all.”
[....] “Somebody pinch me,” said Mike Sievert, Chief Marketing Officer. “By offering a risk-free way for their millions of customers to come over to T-Mobile – AT&T has helped put this Un-carrier consumer movement into overdrive. At T-Mobile we stand for Contract Freedom, and I want to thank our friends at AT&T for helping us liberate their former customers. This isn’t just about switching offers -- it’s about T-Mobile giving customers the service, the network, and the wireless experience they deserve, without having to worry when they switch.”
Sievert noted that AT&T’s recent full-page ad in The New York Times had signaled a real turning point in his mind – that the former industry rival had truly stepped out of the darkness and was seeking to mend its ways and support the Un-carrier consumer movement.
“I mean, a full page ad in The New York Times,” said Sievert. “That says commitment to me.”
Yes, T-Mobile also uses the press release to pitch its own deal for mobile phone users to switch to T-Mobile, but this is quite a press release. If other companies actually did press releases like this, I might have to actually adjust my email filters...
