Beginning yesterday, T-Mobile is offering a limited-time promotion tied to the wildly popular augmented reality game Pokémon GO, in which the mobile data used by the game will not count toward a customer’s data cap. This is yet another form of zero-rating, a practice that can raise serious concerns about competition policy, net neutrality, and consumer choice. Amidst a global Poké-craze, we shouldn’t lose sight of what this may portend for the future of the open internet. So we want to take the opportunity to raise a number of questions about this promotion which would also be important to answer for any other zero-rating service proposal. Before concluding anything about this promotion or any similar plans that may be proposed, it is important to better understand their potential dangers and benefits.
T-Mobile announced its promotion in a news release late last week, raising many unanswered questions:
●One of the central goals of net neutrality is to prevent the handful of companies who dominate the broadband market from favoring certain services and applications over others. T-Mobile justified its Binge On promotion by making it open to any streaming video service willing to abide by its technical requirements. But here, T-Mobile has (understandably) chosen to zero rate a single, extremely popular game.
In zero-rating the data for just a single, already-popular game, is T-Mobile effectively picking winners and losers in the mobile games market? What prevents other providers from taking this further with other popular games, creating the fragmentation and favoritism that net neutrality is designed to prevent? Does it matter how much this may skew the market for particular services and applications?
●Niantic Inc. is the developer and distributor of Pokémon GO, and is partially owned by Nintendo, the Pokémon Company, and Alphabet (Google’s parent company). Did any of these companies pay T-Mobile to zero-rate Pokémon GO data, or otherwise arrange for this promotion? And if so, what were the contractual terms between the companies?
●Niantic plans to offer in-game advertising within Pokémon GO, in the form of “sponsored locations” such as McDonald’s. Will the data used to display this advertising also be zero-rated? In the long-term, will advertisers migrate towards zero-rated channels or platforms?
●Have the developers of other mobile games also asked T-Mobile to zero-rate their apps? Will T-Mobile consider additional zero-rating for other games, and if so, what will guide these decisions? Or is this exclusive to Pokémon GO?
●Is this promotion causing a lot more T-Mobile customers to play Pokémon GO? Does it matter at all that Pokémon GO apparently uses less data--something like five to ten megabytes of data per hour--than online video and other data-hungry applications that have been zero-rated?
●There are significant technical questions as well. For example, how does T-Mobile identify and distinguish Pokémon GO data transiting its network? How will this process affect consumer privacy and data security? These aren’t just technical points beloved of policy wonks. When T-Mobile initially launched its Binge On promotion, there were a number of technical decisions that impacted video providers and consumers. The technical details can make a huge difference -- even if the consequences are unintended.
To be clear, the simplest explanation is that T-Mobile jumped on an opportunity to hook into a trend and make it promotional. Yeah competiton! If something prompts consumers to say “I choose you T-Mo!” we generally regard that as a win for capitalism and a win for competition. But the whole reason we went through ten long years of fighting to get net neutrality is because what looks good in the short-term for one situation may cause real problems when everyone does it.
In its Open Internet Order, the FCC aimed to protect the “virtuous cycle” that “drives innovation and investment on the internet—both at the ‘edges’ of the network, as well as in the network itself,” in part by prohibiting broadband providers from “unreasonably interfering with or unreasonably disadvantaging” the ability of customers to choose among lawful applications and services or the ability of edge providers to make applications and services available. Whether or not the zero-rating of Pokémon GO constitutes an unreasonable interference or disadvantage, it at least raises important questions that deserve close and immediate scrutiny.