T-Mobile Uses Data Caps to Manipulate Competition Online, Undermine Net Neutrality

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T-Mobile’s announcement that they will exempt a handful of music streaming services from their data cap is but the latest example of ISPs using data caps to undermine net neutrality.  T-Mobile now joins Comcast, AT&T, and AT&T again as an ISP that uses data caps as a pretext to manipulate how its users experience the internet.

Unlike other carriers, T-Mobile does not have a data cap with overage penalties.  Instead, when users hit their cap they find their connection slowed significantly. While this type of throttling is probably preferable to huge overage fees, it still exerts a strong influence on what types of services T-Mobile subscribers use online.  This influence is strengthened enormously when certain apps or certain content is exempted from the cap – a practice known as “zero rating.”  This type of gatekeeping interference by ISPs is exactly what net neutrality rules should be designed to prevent.

Furthermore, T-Mobile’s announcement once again calls into question the purpose of data caps at all.  Last year, T-Mobile CEO John Legere explained that its throttling plan would only come into play if a subscriber was hurting other customers’ experience.  Yesterday’s announcement reveals that justification was –  to use one of Legere’s catchphrases – bullshit.  If there is network congestion, data from a music app blessed by T-Mobile into the unmetered lane is no less responsible than any other type of data.  Granting some data but not others special network privileges flies in the face of the reasoning that T-Mobile was using for throttling a year ago.

The fact that new services can be voted into the unmetered lane will provide little comfort to music services that are not already large or those without a business development relationship with T-Mobile.  For disruptive startups that aspire to grow, counting against T-Mobile’s cap will act as a drag on their ability to get customers – exactly the customers the startup would rely on to vote them into the unmetered lane.  For music services that are proudly niche – community radio stations WFMU and KCRW both have great apps with strong followings here at PK – their fate is to be left out of this agreement entirely.  Even if T-Mobile allows any music service to apply for inclusion in the unmetered lane, that process sets a dangerous precedent. Should every new music startup have to register with every ISP they care about before launching?

And that, in a microcosm, is the problem with allowing ISPs to create differentiated lanes online.  Regardless of whether they are fast lanes/slow lanes or metered lanes/unmetered lanes, the result is the same. Startups trying to compete with established players are undermined from doing so.  Niche services are simply left out of the conversation, pulled off the once open internet and resigned to the newly-created backwater.

This is all the result of creating artificial scarcity online.  Whether by speed or data, once carriers have created artificial scarcity they can use it as an excuse to manipulate user experiences and interfere with the open internet.

Fortunately, it does not have to be this way.  The FCC is currently considering new net neutrality rules, and specifically asked questions about data caps.  That makes now a great time to weigh in and make it clear that strong net neutrality rules are important and that data caps work against those strong rules. 

Image credit: Flickr user CWAUnion

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