Today, reports indicate that Verizon Wireless reduced connection speeds for mobile subscribers accessing streaming video services as part of a “video optimization” systems test. The company issued no warnings to consumers prior to testing, but claims “the customer video experience was not affected”.
We all hate running out of mobile internet data. The solution? Unlimited mobile data plans that are usually too expensive for the average consumer, or in many places simply not available. In these circumstances, zero-rating (where a network operator offers unlimited data for specific applications or services) may appear to be an appealing answer. But, as economists like to say, there’s no such thing as a free lunch.
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.
Today, T-Mobile announced a Binge On update that gives video providers more choice over how the program’s video optimization applies to their content. According to T-Mobile, “Now video providers can choose to have their content stream at native resolutions without Binge On’s mobile optimization.” The company also claims that video providers will have the option to manage their content streams themselves. Public Knowledge supports these changes as a step forward but adds that more should be done to benefit consumers.
Zero-rating raises some pretty complicated issues both globally and domestically. For example, Public Knowledge has observed that T-Mobile's "Binge On" program, which doesn't count some video providers towards data usage caps, raises some competitive implications that should be carefully considered. Other zero-rating programs are more clearly anticompetitive. Comcast's continued exemption of its own data traffic from metering fits into that category. Public Knowledge has had a complaint pending at the FCC since 2012 regarding Comcast's zero-rating; this recent expansion of such behavior further illustrates the harms zero-rating can cause in some circumstances.