T-Mobile Backs Off Added Fee For HD Streaming As Unlimited Data Wars Heat Up

from the almost-what-competition-looks-like dept

Tue, Feb 14th 2017 3:20pm — Karl Bode

While the U.S. wireless industry isn't quite as competitive as it's portrayed as (non-price competition is generally the law of the land), T-Mobile has still managed to disrupt the sector with a crazy idea: giving users what they want. That was again made evident this week when Verizon was forced to bring back sort-of unlimited data after spending the last several years telling consumers they didn't really want such simple, straightforward plans. Verizon's long-standing belief that it can tell consumers what they're supposed to want took a notable blow this week by any measure.

Shortly after Verizon announced it was returning to unlimited data, T-Mobile once again upped the ante, announcing it would no longer be charging an extra fee to stream HD video over the company's LTE Network. According to the announcement, T-Mobile not only stopped charging a premium for HD quality (the de-prioritization of which you may recall T-Mobile lied was happening at several points), but also eased up on the restrictions surrounding tethering (using your phone as a modem).

In a statement, T-Mobile CEO John Legere hinted at studies showing that Verizon has nearly lost its network size and speed edge over T-Mobile, which the company had long been using to justify its refusal to more seriously compete:

"I don’t blame Verizon for caving. They just lost their network advantage, and they know it … and more importantly, more and more customers know it. Their back’s against the wall,” said John Legere, president and CEO at T-Mobile. “This is what the Un-carrier does—drag the carriers kicking and screaming into the future. Next up, we’re going to force them to include monthly taxes and fees. Mark my words."

Granted the term "unlimited" is still being abused here, since you may find your connection throttled (technically "de-prioritized") after 28 gigabytes of consumption on T-Mobile's network, or 22 gigabytes of consumption on Verizon Wireless. And U.S. residents will still probably wind up paying significantly more money at slower speeds than most developed nations. Meanwhile, T-Mobile tells Ars Technica that video on the T-Mobile network is still throttled to 1.5 Mbps by default, with the onus placed on customers to remember to enable HD video manually or it reverts to the default, de-prioritized state:

"T-Mobile responded to our question about HD video day passes by saying, "All customers have to do to get HD is go into the app or online to turn on. It’s very easy." Customers still have to enable HD video every 24 hours or it reverts to 480p, a T-Mobile spokesperson told Ars via e-mail. However, the company's Twitter support account says it only will have to be enabled once per month. T-Mobile's press release doesn't clear things up."

Even with caveats, this is at least providing a vague resemblance of what wireless competition is supposed to look like. Given the number of customers T-Mobile is now hoovering up from AT&T, it may also force AT&T to revisit its own opposition to unlimited data plans (currently only available if you subscribe to both AT&T wireless and DirecTV). So even though the industry still struggles with the dictionary definition of unlimited, the fact T-Mobile is pushing AT&T and Verizon to actually try to compete is certainly a good thing.

The problem is that competition in the wireless space is viciously fickle, and by and large most of AT&T and Verizon's promotions remain somewhat theatrical in nature when it comes to actually lowering your overall price once various fees are factored in. And should the rumored T-Mobile and Sprint merger be approved by regulators, you can be fairly sure that even this level of more superficial competition may not be around for long.

Filed Under: competition, hd streaming, mobile data, streaming, unlimited data
Companies: t-mobile, verizon

8 Comments

A Little Something Called Competition Forces Verizon To Bring Back Unlimited* Data

Wireless

from the we-compete-when-we-want-to dept

Mon, Feb 13th 2017 10:46am — Karl Bode

Despite the rising competitive threat of T-Mobile, Verizon Wireless has spent the last few years simply refusing to seriously compete on price. That stubbornness has extended to the company's refusal to match T-Mobile's unlimited data plans, eliminated by Verizon back in 2011. In a truly competitive market, you're supposed to listen to your customers and try to provide whatever they're clamoring for. But Verizon's tack has been the exact opposite; the company spending the last few years trying to tell consumers they don't really want simpler, unlimited data options -- and that these plans are unnecessary and unviable.

For most of this time, Verizon Wireless' excuse du jour was that it didn't have to compete on price or service because its network was just that phenomenal. But a report last week by Open Signal found that T-Mobile, once considered an under-cooked upstart, was finally fielding a network that nearly matches Verizon in terms of both speed and overall coverage:

"Our testers were able to find a Verizon LTE signal 88.2% of the time, cementing Big Red's place at the top of our 4G rankings. But T-Mobile has been systematically closing the gap. In the fourth quarter its 4G availability was less than two percentage points below Verizon's, the closest we've seen that difference."

Initially Verizon tried to downplay the results, insisting that because Open Signal uses crowdsourced data, that the results souldn't be taken seriously. That didn't go over particularly well over at T-Mobile:

Typical @Verizon to say they (and their well-paid consultants) know better than 4.5 BILLION customer experiences. 🤔 https://t.co/bSO2HOLvNz

— John Legere (@JohnLegere) February 10, 2017

But Verizon then did a 180, announcing late last week that the company would finally be offering unlimited data again, and without throttling video, music or games as a result (which is now standard practice at both T-Mobile and Sprint). Of course the industry's definition of "unlimited" remains as murky as it has always been, with Verizon quick to note that by "unlimited," they actually mean somewhere around 22 gigabytes per month, after which your connection will likely be throttled:

"On all Verizon Unlimited plans you get our fast LTE speeds. To ensure a quality experience for all customers, after 22 GB of data usage on a line during any billing cycle we may prioritize usage behind other customers in the event of network congestion. While we don’t expect to do that very often, network management is a crucial tool that benefits all Verizon customers."

Still, a good move is a good move. And Verizon's decision will likely push AT&T (which currently only sells you unlimited data if you bundle your wireless connection a with DirecTV service) to follow suit. Granted competition in telecom is fickle and inconsistent, and non-price competition -- where theatrics trump actual value -- is generally the rule of thumb. And should rumors of a new Sprint, T-Mobile merger be accurate, we could very quickly be facing three large carriers with, once again, little to no incentive to actually give consumers what they want.

Filed Under: competition, mobile, mobile broadband, unlimited data
Companies: t-mobile, verizon

24 Comments

New FCC Boss Kills Zero Rating Inquiry, Signals Death Of Net Neutrality Enforcement

Broadband

from the not-with-a-bang-but-with-a-whimper dept

Mon, Feb 6th 2017 10:46am — Karl Bode

Surprising nobody, new FCC boss Ajit Pai used a flurry of late-Friday announcements to roll back a number of consumer-friendly FCC initiatives the former Verizon lawyer (and the large ISPs that already love him) didn't like. Among them was the Wheeler-led FCC's attempt to crack down on zero rating, the practice of an ISP exempting its own content from its own arbitrary usage caps, while still penalizing competitors. The former FCC had just belatedly ruled that both AT&T and Verizon's zero rating efforts were anti-consumer, anti-competitive, and dramatically damaged the open streaming video market.

That was then, and this is now.

This new, Pai-led FCC wasted no time sending AT&T, Verizon and Comcast letters (pdf) proclaiming that all FCC inquiries into the anti-competitive impact of zero rating have been dropped. In a brief statement (pdf) issued to the media, Pai went so far as to imply he was doing this not because it's what giant ISPs wanted -- but because of a selfless dedication to the poor:

"Today, the Wireless Telecommunications Bureau is closing its investigation into wireless carriers' free-data offerings. These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings."

You'll find that taking an anti-consumer position on something, then insisting it was only done to aid the downtrodden, will be a common refrain from this new Pai-led FCC. In reality, zero rating data doesn't create "free data plans," it simply shifts the cost burden onto streaming video providers -- or more accurately, the customers of streaming video providers. Those customers suddenly face having to pay more money for competing services, which naturally funnels them to the streaming services of AT&T (DirecTV Now), Verizon (Go90), or Comcast (Stream TV).

ISPs like AT&T and Verizon had tried to argue that disadvantaging competitors in this fashion wasn't a big deal, because those companies could pay AT&T and Verizon a steep and unnecessary surcharge to cap-exempt their services too, putting themselves back on equal footing with ISPs. Given that many smaller companies couldn't afford such tolls, the former FCC's report (pdf) made it clear that this structure would be abused by giant, incumbent gatekeepers:

"Thus, it would appear that AT&T's practices inflict significant unreasonable disadvantages on edge providers and unreasonably interfere with their ability to compete against AT&T's affiliate, DIRECTV, The structure of Verizon's FreeBee Data 360 program raises similar concerns. We are aware of no safeguards that would prevent Verizon from offering substantially more costly or restrictive terms to enable unaffiliated edge providers to offer services comparable to Verizon's affiliated content on a zero-rated basis.

Again, for those confused, zero rating is simply incumbent duopolists using a lack of competition in broadband to impose arbitrary and unnecessary usage caps, then (ab)using those caps to dramatically tilt the playing field in their favor. Full stop. Zero rating has absolutely nothing to do with helping "low income Americans," innovation or "expanding broadband deployment," and Pai's claims to the contrary are transparent and insulting.

There's more than a little cognitive dissonance required in insisting you're a stalwart defender of "free markets," then immediately turning a blind eye to the demolition of a level streaming video playing field by giant, lumbering monopolists. And, of course, this is just the opening salvo in the latest battle against net neutrality; while Pai gets to work refusing to enforce the agency's existing FCC rules, the GOP is getting to work on a Communications Act rewrite that will not only kill the net neutrality rules, but defang and defund the FCC as a consumer watchdog altogether.

If you actually give a flying damn about net neutrality, broadband competition and a healthy, open internet -- 2017 is going to desperately need your help.

Filed Under: ajit pai, competition, net neutrality, zero rating
Companies: at&t, verizon

40 Comments

Report: President Trump Picks Former Verizon Lawyer Ajit Pai To Head FCC

Broadband

from the populism-schmopulism dept

Fri, Jan 20th 2017 11:53am — Karl Bode

As many expected, Donald Trump has chosen former Verizon lawyer and current FCC Commissioner Ajit Pai to head the FCC, according to a report by Politico. According to two anonymous insiders "familiar with the decision," Pai, who met with Trump on Monday, should be formally announced as FCC boss in short order. Pai recently proclaimed that net neutrality's "days are numbered" under Trump, while stating that the reformed FCC would be taking a "weed whacker" to "unnecessary regulations" like the FCC's net neutrality rules and its new consumer broadband privacy protections.

Politico rather soft sells the controversy that Pai will represent to those who don't think technology policy should be dictated by Verizon, AT&T, Comcast and Charter Communications:

"Pai is already a familiar name in tech and telecom policy debates. He’s a fierce and vocal critic of many regulations passed by the commission's Democratic majority, including the 2015 net neutrality rules that require internet service providers to treat all web traffic equally and are opposed by the major broadband companies."

Let's be clear here. Pai has supported the incumbent duopoly providers on nearly every issue of substance. He has vilified net neutrality to an often-comic degree, falsely claiming the rules encouraged dictators in North Korea and Iran and led to a massive slowdown in industry investment. He has consistently refused to even admit the U.S. broadband market has a competition problem. He's made it abundantly clear he wants to eliminate every FCC consumer protection function, and, alongside fellow Commissioner Mike O'Rielly, has even repeatedly voted down holding AT&T accountable for outright fraud.

If you're looking for somebody who will rubber stamp every Comcast request shoveled in his general direction, Pai is certainly your man. If you're looking for an FCC leader who's going to care about consumer issues or the plight of the startup or small business in a word dominated by massive, ever-consolidating telecom conglomerates, you're about to get a master class in disappointment. The irony, of course, is that Pai is about as far from the "populist" rhetoric President Trump leaned on to get elected as one can get:

January 20th 2017, will be remembered as the day the people became the rulers of this nation again.
— Donald J. Trump (@realDonaldTrump) January 20, 2017

Yes, nothing quite says "man of the people" like a former Verizon lawyer who has fought tooth and nail against every single effort to hold large ISPs accountable to the public. On any given day, if the wind is right and with enough pressure, Pai may just be convinced to occasionally do the right thing. But as the leader of an agency tasked with keeping Comcast from viciously savaging both consumers and the competition, it's not really physically possible to make a more controversial and uninspired selection.

Filed Under: ajit pai, broadband, fcc, net neutrality, privacy
Companies: at&t, comcast, verizon

70 Comments

FCC's Wheeler May Need To Stick Around If He Doesn't Want His Legacy Demolished

Broadband

from the rock-and-a-hard-place dept

Wed, Dec 14th 2016 8:30am — Karl Bode

So we've talked a lot over the years about how few people expected much from FCC boss Tom Wheeler, given his history lobbying for the wireless and cable industries. But amazingly enough, Wheeler wound up being one of the most consumer, small business, and competition-friendly bosses in FCC history (not that this is saying much). He passed net neutrality rules, new broadband privacy protections, raised the definition of broadband to 25 Mbps (to highlight a lack of competition at higher speeds), and more. In short, he wasn't the dingo many thought him to be.

Now, with an incoming Trump administration making it very clear in public comments the goal is to kill net neutrality and gut the FCC as consumer broadband watchdog, the lion's share of Wheeler's efforts are poised to be demolished.

This puts Wheeler in a notably prickly predicament. Wheeler's term technically extends until 2018, but under FCC rules he would be downgraded from Chairman to just vanilla commissioner should he stay on. If Wheeler leaves, the current FCC would face an immediate 2-1 Republican advantage. If he stays, the FCC remains with an even partisan 2-2 split, with Wheeler and Mignon Clyburn on one side, and Ajit Pai and Mike O'Rielly on the other -- at least until a new FCC boss is appointed to round out the five-person FCC leadership.

Senate confirmation could take a large chunk of 2017, delaying any substantive policy changes. But if Wheeler chooses to leave, the 2-1 voting advantage would allow those looking to eliminate net neutrality and other recent FCC initiatives a running head start. Wheeler's predicament is thanks, in part, to the GOP refusing to renew current FCC Commissioner Jessica Rosenworcel to another term, something leaders originally promised they'd do -- then backed away from realizing they might have an advantage. Wheeler tried to force the issue last week when he said he'd resign immediately if Rosenworcel was reappointed to a new term.

But Republicans refused to make any such deal hoping to gain the early advantage:

"Republicans previously said they would not reconfirm Rosenworcel unless Wheeler resigned, because one Democrat must exit the FCC to let President-elect Donald Trump appoint a new Republican and give his party a 3-2 majority. But by the time Wheeler promised to do so, Republicans had other ideas. There wasn't enough time left in the Senate's session to handle Rosenworcel's confirmation, Commerce Committee Chairman John Thune (R-S.D.) said. Other Republicans supported taking no action on Rosenworcel because they hope both she and Wheeler will leave and give Republicans an immediate 2-1 majority."

In an ideal world, partisan pattycake wouldn't dictate important technological issues of the age. Especially since issues like net neutrality actually have broad bipartisan support, and are only shoehorned into the mold of partisan politics because they operate in a dysfunctional vacuum. Ensuring that there's broadband competition (and by proxy cheaper, better service) enjoys similar bipartisan support among consumers. As does not letting incumbent ISPs write harmful protectionist state legislation solely to protect incumbent revenues from competition.

None of this is probably a particularly enjoyable position for the 70-year-old Wheeler to inhabit. Instead of enjoying his retirement, Wheeler faces being forced to stick around if he doesn't want four years of hard work dismantled. And even if he does stick around, he'll inevitably find himself at the mercy of a 3-2 minority position anyway, one where he'll spend four years losing an endless series of 3-2 votes that carefully chip away at everything he fought for. In short, the recovering dingo is damned if he does, and damned if he doesn't -- music to the ears of those looking to strip away neutrality and other consumer protections.

Filed Under: fcc, jessica rosenworcel, tom wheeler

25 Comments

T-Mobile Applauds Likely Death Of Net Neutrality Under Trump

Broadband

from the with-friends-like-these dept

Wed, Dec 7th 2016 6:34am — Karl Bode

While T-Mobile has certainly brought some welcome changes to the wireless industry (including a CEO with a rare sense of humor), the consumer-friendly brand they've established has consistently fallen short when it comes to one major subject: net neutrality. The company lobbied and fought consistently against the reclassification of ISPs as common carriers and the creation of net neutrality rules. The operator then pissed off much of the internet when CEO John Legere mocked the EFF for raising questions about the misleading nature of the company's zero rating and throttling practices.

This week, the company again made its opposition to net neutrality clear. Speaking at a media and telecom conference, T-Mobile CFO Braxton Carter applauded the incoming President-elect Donald Trump, whose telecom transition team members have all made it abundantly clear that eliminating net neutrality rules and gutting the FCC as a consumer watchdog will be among their top priorities. This is, T-Mobile claims, going to be a real "positive" for the industry:

"It’s hard to imagine, with the way the election turned out, that we’re not going to have an environment, from several aspects, that is not going to be more positive for my industry,” Carter said in comments this morning at the 44th Annual Global Media and Communications Conference. “I think that it’s very clear that there’s going to be less regulation. And less regulation—regulation often destroys innovation and value creation."

Except of course that net neutrality rules exist to protect innovation from entrenched telecom monopolies. But Carter doubles down, insisting specifically that the elimination of net neutrality rules should provide "opportunity" for "significant innovation":

"Carter also specifically addressed the issue of net neutrality, arguing that the reversal of the FCC’s Open Internet rules would pave the way for additional innovation in the space. “It would provide the opportunity for significant innovation and differentiation,” Carter said of a telecom industry without net neutrality rules. “You could do some very interesting things” without net neutrality."

Carter appears excited about "deregulation" because it might lower T-Mobile's tax burden and increase its chances of merging or being acquired. But his excitement is shortsighted and fairly typical for executives in the telecom sector.

The problem is that in telecom, "deregulation" (of the sort promised by folks like Trump advisor Jeff Eisenach) doesn't actually mean straight deregulation. What it means in practice is pay-to-play regulation, where the biggest and most politically powerful companies (usually AT&T or Comcast) get to literally write the law. That's why you'll often see these folks breathlessly proclaim they adore "open markets," yet turn a blind eye when AT&T or Comcast write protectionist state law that hamstrings local communities and keeps competitors at bay.

In telecom, "deregulation" is all-too-frequently code for "let's let AT&T and Comcast decide what's best." That was the preferred mantra of former FCC boss Michael Powell (now the cable industry's top lobbyist), who also shared Jeffrey Eisenach as a transition team member. The end result of that administration was "deregulation" that wound up empowering AT&T and Comcast, making broadband less competitive and customer service worse than ever. We've apparently decided to collectively forget that.

As such, when your biggest competitor is AT&T, cheering for the one regulator that has tried to ensure a level playing field for smaller competitors seems a bit myopic. Remember it was the FCC and DOJ that blocked AT&T's attempted acquisition of T-Mobile, which ultimately resulted in T-Mobile being a more innovative, fierce competitor than ever before. Again, every indication coming from Trump's telecom transition team and the GOP is that they hope to completely defund and defang the FCC. That means more mergers, less competition, less innovation, and more net neutrality violations than ever before.

T-Mobile has repeatedly tried to downplay its opposition to net neutrality by claiming that the company is on the "right side of history" as it fights neutrality rules with broad, bipartisan support among consumers. But the company's enthusiastic support for the gutting of nearly all consumer protections in the broadband space make it clear, once again, the brand's dedication to consumers and "innovation" is entirely and unsurprisingly superficial.

Filed Under: braxton carter, broadband, john legere, net neutrality, wireless
Companies: t-mobile

32 Comments

Argentina Orders Telecoms To Create A Permanent Database Of All Mobile Phone Users

Privacy

from the is-that-a-tracking-device-in-your-pocket,-or-are-you-just-glad-to-see-me? dept

Tue, Nov 15th 2016 11:20pm — Glyn Moody

The Argentine government has announced the creation of a new national register of everyone using mobile phones in the country (original in Spanish). An article on Ambito.com says that discussions between the government and telecom companies have been underway for some months, and last week the scheme was finally unveiled. According to the Joint Resolution No. 6 of the Ministries of Security and Communications (original in Spanish), the mobile phone companies will be responsible for developing, operating and managing the system "at their own cost." In practice, this is likely to mean that the extra expenses will be passed on to customers. The personal data must be stored in a "safe, audited and permanent" manner, and yes, the records will be available to the authorities.

The justification for the national register is to combat theft: according to a report in La Nación, 5000 mobile phones are stolen every day (original in Spanish.) To put that in context, another article in La Nación (original in Spanish) says that there are around 60 million mobile numbers in use, which seems rather high given that Argentina's total population is 42 million. Clearly, some people have two or more phones.

Even one is a problem, for reasons that Edward Snowden and Andrew "bunnie" Huang pointed out earlier this year: a mobile phone is "the perfect tracking device." The new register may indeed help tackle the theft of mobile phones in Argentina. But it will also create a powerful and dangerous new resource that the authorities will surely be unable to resist dipping into for other purposes.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: argentina, database, mobile phones, privacy, registration, tracking

12 Comments

Google Fiber Announces Layoffs & Deployment Pause, Will Likely Pivot To Wireless

Broadband

from the build-it-and-they-won't-come dept

Wed, Oct 26th 2016 10:43am — Karl Bode

Back in August a report emerged claiming that Google Fiber executives were having some second thoughts about this whole "building a nationwide fiber network from the ground up" thing. More specifically, the report suggested that some executives were disappointed with the slow pace of digging fiber trenches, and were becoming bullish on the idea of using next-gen wireless to supplement fiber after acquiring fixed wireless provider Webpass. As such, the report said the company was pondering some staff reductions, some executive changes, and a bit of a pivot.

Fast forward to this week when Access CEO Craig Barrett posted a cheery but ambiguous blog post not only formally announcing most of these changes, but his own resignation as CEO. According to Barrett, Google will continue to serve and expand Google Fiber's existing markets (Austin, Atlanta, Charlotte, Kansas City, Nashville, Provo, Salt Lake City, and The Triangle in North Carolina), and will also build out previously-announced but not yet started efforts in Huntsville, Alabama; San Antonio, Texas; Louisville, Kentucky; and Irvine, California.

From there, the direction Google Fiber will be headed gets murky. According to Barrett, Google has paused (read: killed) potential deployments in cities where Google Fiber had been having conversations, but hadn't yet given the green light for full deployment (Portland, Chicago, Jacksonville, Los Angeles, Oklahoma City, Phoenix, San Diego, San Jose, and Tampa). Most of the layoffs will be in these cities, notes Barrett:

"For most of our “potential Fiber cities” — those where we’ve been in exploratory discussions — we’re going to pause our operations and offices while we refine our approaches. We’re ever grateful to these cities for their ongoing partnership and patience, and we’re confident we’ll have an opportunity to resume our partnership discussions once we’ve advanced our technologies and solutions. In this handful of cities that are still in an exploratory stage, and in certain related areas of our supporting operations, we’ll be reducing our employee base."

A report over at Bloomberg notes that about 9% of employees at Access (which covers multiple projects, not just Google Fiber) will be let go, which is notably fewer staff reductions than last summer's report had suggested. Bloomberg's insiders also claim that there have been some rifts among executives at Google/Alphabet/Access over whether to remain dedicated to the laborious process of fiber installations, or to pivot more completely to wireless:

"Moving into big cities was a contentious point inside Google Fiber, according to one former executive. Leaders like Barratt and Dennis Kish, who runs Google Fiber day-to-day, pushed for the big expansion. Others pushed back because of the prohibitive cost of digging up streets to lay fiber-optic cables across some of America’s busiest cities."

That there's some hesitation isn't surprising. Not only is building a fiber network from the ground up incredibly hard, expensive, and time consuming, the telecom industry is awash with deep pocketed incumbents intent on making things as difficult as possible for competitors like Google Fiber (and downright impossible for smaller ISPs). From AT&T suing cities to thwart attempts to streamline utility pole attachments, to incumbent ISPs writing awful state law prohibiting public/private partnerships, telecom can certainly be a cesspool of protectionism of the worst sort.

While these incumbent ISPs (and their armies of paid policy mouthpieces) will likely spend the next few weeks celebrating the "death of Google Fiber," there's nothing stopping the company from pivoting to next-generation wireless. Google has filed applications with the FCC to conduct trials in the 71-76 GHz and 81-86 GHz millimeter wave bands, and is also conducting a variety of different tests in the 3.5 GHz band, the 5.8 GHz band and the 24 GHz band. That said, it certainly remains possible that at some point Google gets tired of ramming its head against VerizoCasT&T and sells the project off in a few years, leaving us with another sad historical footnote in the often pitiful national quest for something vaguely resembling broadband competition.

Filed Under: access, broadband, competition, fiber, wireless
Companies: access, alphabet, google

25 Comments

FCC Fines T-Mobile For Abusing The Definition Of 'Unlimited' Data

Legal Issues

from the abusing-the-dictionary dept

Thu, Oct 20th 2016 11:46am — Karl Bode

For the better part of the last decade, wireless carriers have had an often vicious, adversarial relationship with the dictionary. More specifically, they've struggled repeatedly with the definition of the word "unlimited," often pitching data services that proclaim to be unlimited, only to saddle users with onerous, often confusing restrictions. For the last decade, regulators have tried to cure them of this behavior, from Verizon paying $1 million to New York's Attorney General in 2007, to the FCC fining AT&T $100 million last year.

Yet despite repeated warnings, the problem persists. Case in point: this week the FCC announced it had struck a $48 million settlement with T-Mobile (pdf) for advertising unlimited data plans without making it clear the limitations of these connections. More specifically, the FCC says T-Mobile didn't clearly inform consumers that these "unlimited" lines would be throttled during periods of network congestion, or after users consumed 17 GB of data in any given month:

"The FCC’s investigation found that company policy allows it to slow down data speeds when T-Mobile or MetroPCS customers on so-called “unlimited” plans exceed a monthly data threshold. Company advertisements and other disclosures may have led unlimited data plan customers to expect that they were buying better and faster service than what they received. The Commission’s 2010 Open Internet transparency rules require broadband Internet providers to give accurate and sufficient information to consumers about their Internet services so consumers can make informed choices."

All told, T-Mobile will pay a $7.5 million fine and dole out $35.5 million in "consumer benefits" (mostly just minor discounts on select hardware and plans) from T-Mobile and its prepaid subsidiary MetroPCS. This will, the FCC insists, surely teach T-Mobile a lesson about marketing unlimited data tiers that aren't:

"Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” said FCC Enforcement Bureau Chief Travis LeBlanc. “When broadband providers are accurate, honest and upfront in their ads and disclosures, consumers aren’t surprised and they get what they’ve paid for. With today’s settlement, T-Mobile has stepped up to the plate to ensure that its customers have the full information they need to decide whether ‘unlimited’ data plans are right for them."

While this sounds superficially nice, there are a few problems with the FCC's move here. For one thing, the FCC has been making it abundantly clear that it's ok to sell "unlimited" plans with all manner of misleading limits -- you just have to make sure your marketing fine print makes those limitations clear. And while that's good, these kinds of wrist slaps clearly aren't working. And just ensuring transparency is not the end of this particular conversation.

For example, T-Mobile's and Sprint's newest plans, which the FCC hasn't raised a peep about, offer users "unlimited" connections, but throttle all games, video and music unless users shell out a monthly premium if they actually want these services to work as intended. That's a fairly obvious violation of net neutrality principles and an abuse of the word "unlimited," yet the FCC has made it abundantly clear it thinks this sort of behavior is perfectly ok. In other words, you can be a misleading cheat. You just have to make it clear you're a misleading cheat via fine print in your three-hundred page terms of service.

We've noted repeatedly how the FCC simply refuses to acknowledge how usage caps and zero rating are causing significant problems, and it doesn't look like it's an issue that's going to get fixed anytime soon. While current FCC boss Tom Wheeler's pro-consumer bent was a surprise to many (especially given his cable and wireless lobbying past), there are growing signs that his tenure will be up at the end of the year. And given the particular leanings of both Trump and Clinton, there's certainly no guarantee his replacement will have the political courage to stand up for consumers and finish what Wheeler started.

Filed Under: fcc, lies, throttling, unlimited data
Companies: t-mobile

27 Comments

Facebook Wants To Bring Controversial Zero Rated 'Free Basics' Service To The States

Broadband

from the we're-helping! dept

Wed, Oct 12th 2016 8:27am — Karl Bode

Last year the Indian government forged new net neutrality rules that shut down Facebook's "Free Basics" service, which provided a Facebook-curated "light" version of the internet -- for free. And while Facebook consistently claimed its program was simply altruistic, critics (including Facebook content partners) consistently claimed that Facebook's concept gave the company too much power, potentially harmed free speech, undermined the open nature of the Internet, and provided a new, centralized repository of user data for hackers, governments and intelligence agencies.

In short, India joined Japan, The Netherlands, Chile, Norway, and Slovenia in banning zero rating entirely, based on the idea that cap exemption gives some companies and content a leg up, and unfairly distorts the inherently level internet playing field. It doesn't really matter if you're actually altruistic or just pretending to be altruistic (to oh, say, lay a branding foundation to corner the content market in developing countries in 30 years); the practice dramatically shifts access to the internet in a potentially devastating fashion that provides preferential treatment to the biggest carriers and companies.

Fast forward a year and Facebook is now considering bringing the controversial service to the United States. The company has apparently been in talks with the White House about getting the idea rolling in the U.S., without setting off the same kind of regulatory alarm bells it faced in India:

"The effort to offer a U.S.-based version of Free Basics is moving forward in fits and starts, said the people, who spoke on the condition of anonymity because the effort has not been publicly revealed. In particular, the company wants to ensure that Free Basics will be viewed favorably by the U.S. government before it launches, thus avoiding a costly repeat of its experience in India."

Again, India reacted poorly not because Facebook was giving away "free stuff," but because Facebook was trying to install itself as the 90's AOL of the modern internet. Content partners dropped out because they didn't like Facebook dictating which websites and services get to be "zero rated." Companies like Mozilla suggested that if Facebook really wants to help the world's poor, it can start by funding access to the actual Internet. Facebook, annoyed by those who don't believe it's being purely altruistic, responded by calling such critics "extremists" who are hurting the poor.

The fight comes to US shores as the country is already facing a growing array of problems thanks to zero rating. Whereas India banned the practice, the FCC passed net neutrality rules that don't ban it outright, opening the door to companies trampling net neutrality if they're just creative enough. As a result, Comcast, Verizon and AT&T all now exempt their own streaming content from caps while still penalizing Netflix. Similarly T-Mobile and Sprint have now started throttling video, music and games unless customers pay a steep monthly premium.

So while the FCC twiddles its thumbs to what's quickly becoming a growing problem (unless you're an ISP or a deep-pocketed content company), Facebook is looking to get in on the ground floor of a concept that professes to be "helping" while dramatically changing the way access to the internet works. Amusingly, the social media giant appears to be treading so carefully, it's refusing to strike deals with big carriers out of an obvious fear of anti-competitive criticism:

"Facebook has not attempted to strike a deal with national wireless carriers such as T-Mobile or AT&T, said the people familiar with the matter, over concerns that regulators may perceive the move as anti-competitive. Instead, it has pursued relationships with lesser-known carriers."

Again, if you want to help low-income global citizens access to the internet -- doesn't it just make more sense to help fund connections to the actual internet?

Filed Under: blocking, fcc, free basics, limits, net neutrality, throttling, us, zero rating
Companies: facebook

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