November 12, 2015
T-Mobile US will stream 24 video services including Netflix, Hulu and HBO for free, albeit at lower quality. The wireless company has already used this tactic — called zero rating, which means the data will not be counted against the subscriber’s data limit — for its Music Freedom service, which includes music streaming apps Spotify and Apple Music among others. The new video exemption, dubbed Binge On, does not, however, include video from YouTube, Facebook and Netflix and requires users to have a 3GB plan or larger.
According to The Wall Street Journal, T-Mobile is “betting customers will opt to watch lower-definition video free on their smartphones instead of paying for higher resolution images that count against their monthly data caps,” and that the counter-intuitive move would “ultimately boost revenue by attracting more subscribers.”
Investors, however, were less convinced, with shares dropping 4 percent. “Investors will be scared because it looks like T-Mobile is lighting a torch into a competitive wireless environment,” T-Mobile chief executive John Legere says. “All I can say is we’re not that stupid.”
But Wired notes that the very concept of zero rating “would seem to stand in stark contrast to the principle of net neutrality,” although, legally, it falls within a gray area. “The record in the Open Internet proceeding reflected both benefits from/concerns about zero-rating, so we didn’t ban such plans but will look at them case-by-case and act as necessary,” said FCC spokesperson Mark Wigfield, who didn’t comment specifically on T-Mobile’s services.
T-Mobile isn’t alone in offering such a service: Facebook’s Internet.org program “subsidizes access to Facebook and other sites in developing countries,” explains Wired, Sprint has a prepaid wireless service with the option of unlimited data for certain sites, and AT&T “has flirted with the idea of sponsored apps that wouldn’t count towards your bandwidth limit.”
But, notes T-Mobile’s Legere, his company doesn’t charge streaming companies to participate and allows any legal streaming service to join, meaning “no paid prioritization and no discrimination, in theory, between different music or video streaming services.”
“This is not a network neutrality problem,” said Legere.
Why Net-Neutrality Activists Hate T-Mobile’s Free Video Plan, National Journal, 11/10/15