It's historically always been true that however bad a hack scandal is when initially announced, you can be pretty well assured that it's significantly worse than was actually reported. That's certainly been true of the recent T-Mobile hack, which exposed the personal details (including social security numbers) of more than 53 million T-Mobile customers (and counting). It's the fifth time the company has been involved in a hack or leak in just the last few years, forcing the company's new(ish) CEO Mike Sievert to issue yet another apology for the company's failures last Friday:
Our investigation into the cybersecurity attack against @Tmobile & our customers is substantially complete. We didn’t live up to the expectations we have of ourselves to protect customer data. Here's how we're taking our security efforts to the next level.
The extra apology didn't come unprompted. It came after the hacker involved in the data breach conducted an interview with the Wall Street Journal (paywalled, here's an open alternative) in which he explained T-Mobile's overall consumer privacy and security protections as "awful":
Binns gained access to the servers after discovering an unprotected router by scanning T-Mobile's internet address for weak spots, The Journal reported. Over 53 million people had personal information compromised in the hack such as names, addresses, dates of births, phone numbers, Social Security numbers, and driver's license information."
In short he didn't so much as "hack" T-Mobile as he walked straight through an open door. Customers say they didn't know about the breach until the media did, prompting them to wonder why, if privacy and security is such a priority for a company like T-Mobile, they had to learn about the incident from somebody else:
"It just frustrates me, honestly," Richards said. "If our data is a priority for you guys to keep safe, how come I haven't gotten a notification or anything like that?"
Of course T-Mobile, like countless other American companies, isn't incentivized to actually secure user data because we don't have a meaningful privacy law for the internet-era. In most cases, the most companies like this see are a week of bad headlines and a few regulatory wrist slaps -- assuming U.S. regulators have the time or resources to pursue any kind of meaningful investigation at all. Without meaningful oversight and penalties the impact on consumers is often little more than an afterthought, and the most they get is another round of "free credit reporting" -- something they've already obtained from the last seven times their personal information wasn't properly secured.
Then of course there's the relentless "growth for growth's sake" mindset in telecom and other sectors that results in a near-mindless obsession with consolidation (often at the cost of anything else). T-Mobile has spent much of the last five years kissing Donald Trump's ass to gain regulatory approval for its job and competition eroding merger with Sprint. How much of the time spent pursuing their heavily criticized megadeal (and the follow up network integration) could have gone toward actually securing the company's servers, routers, and overall network?
You might recall that pre-merger T-Mobile used to make fun of the wireless sector's repeated failures in the TV space, such as Verizon's massive Go90 face plant. Of course, at the same time, T-Mobile was busy planning its own streaming TV efforts. Launched just last fall, T-Mobile's TVision TV service was supposed to truly disrupt the stodgy TV sector (something already happening at the hands of countless platforms). T-Mobile CEO Mike Sievert explained it like this last October:
"If ever there was an industry that needed an Un-carrier overhaul, it’s cable and satellite TV,” Sievert said, using the company’s term for its disruptive moves in the wireless industry. “I mean, it’s no secret why these companies are dying, they treat their customers so badly."
That was then, this is now. Less than half a year later, T-Mobile is now scrapping its live TV service and striking a deal to offer YouTube live TV services instead:
"It’s a major change for T-Mobile’s TVision service, which was launched just a few months ago, including both live and on-demand content. T-Mobile says the existing TVision Live, Live + and Live Zone services will be phased out starting April 29. T-Mobile customers will get a $10/month discount on YouTube TV, bringing the price down to $54.99/month, as well as a month of free service."
As Verizon and AT&T, have found, disrupting the TV sector is no easy feat, even when (in AT&T's case) you actually own a massive content empire in Time Warner. There are numerous reasons for telecom's failure to compete meaningfully in this space, a lot of it having to do with the fact that telecom giants, used to the lack of serious competition in broadband, aren't genuinely used to this whole disruption, competition, adaptation, and innovation stuff. Even T-Mobile, which made its fortunes being a competitive thorn in AT&T and Verizon's side, didn't find it to be a particularly easy road.
Granted there is still something to be said for T-Mobile figuring this out before it poured countless billions down the drain. Sort of. The company did spend an estimated $325 million to buy premium streaming vendor Layer3TV back in 2018.
Still, the losses aren't as bad as say, AT&T, which spent nearly $200 billion in megamergers thinking it was going to dominate the TV sector, only to lose 8 million TV subscribers in a few years (something I recently wrote about at The Verge) because it had absolutely no idea what it was actually doing. T-Mobile also seemed to assume this would be an easier path that it actually was, made tougher by the fact that the same broadcasters driving relentless price hikes in traditional TV, are also doing the same thing in streaming:
Another factor at play is that this version of T-Mobile isn't actually as disruptive as the trash-talking version helmed by former CEO John Legere just a few years ago. Thanks to the Sprint merger, AT&T, Verizon, and T-Mobile see significantly less competition. As a result, investors will inevitably pressure them to compete even less intently on price, and they'll inevitably comply. As a result, all of T-Mobile's "uncarrier" disruptive plays have been getting progressively lamer and lamer, with the company desperately hoping nobody notices.
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.
