Net Neutrality

Does T-Mobile's Binge On Service Violate Net Neutrality? Probably, Which Is All You Need To Know About Net Neutrality.

Zero-rated plans, which exempt users from data caps, are in cross-hairs of FCC. Blech.


At the heart of so-called Net Neutrality, the official-though-hopelessly-vague-and-hopefully-illegal policy of the FCC, is the idea that all data streamed over the internet should be treated equally.

Simply as a description of how data is handled on networks, that's wrong for many reasons. And when it comes to "zero-rated" services, which allow users unlimited access to some subset of data, it can be obviously pernicious.

As Mike Godwin wrote here last year, opposition to zero-rated services—such as free Wikipedia or limited Facebook access in the developing world—plainly works againt the interests of impoverished end users, starving them of content and information in the name of some devotion to an abstract goal.

But what about here in the First World, or at least the United States? In league with Net Neutrality zealots, the FCC is taking a long look at T-Mobile's Binge On service, which allows users to stream Hulu, Netflix, HBO, Sling, and other video and music services without having that data count aganst their monthly usage caps. In order to facilitate that, T-Mobile downgrades the signals. It's that action that has groups such as the Electronic Frontier Foundation (EFF), which once employed Godwin and provided the legal oomph to help overthrown the awful Communications Decency Act in the 1990s, all upset.

From an interview  at Forbes with Tech Freedom's Evan Swartztrauber by the Manhattan Institute's Jared Meyers:

[Swartztrauber]: With Binge On, T-Mobile reduces video resolution to optimize it for smartphone screens. While the change in video quality is hardly noticeable to a consumer, as 480p (DVD-quality) streams look great on small screens, the optimization helps T-Mobile mitigate network congestion and improve overall customer experience….

The FCC's Open Internet Order codified certain principles of net neutrality for broadband providers: No blocking of lawful content, no unreasonable discrimination or throttling, and no paid prioritization. But it did not make a clear judgment about free data given away through zero-rating programs, which include Binge On. Instead, the FCC said it will judge these offerings on a case-by-case basis. Net neutrality, in its most extreme form, requires that all Internet traffic be treated exactly the same with few, if any, exceptions. Under this interpretation, any type of zero-rating should not be allowed at all. This is why some self-styled "consumer advocacy" groups oppose Binge On. In other words, T-Mobile's exemption of video streams from data caps is not the issue that EFF is fighting. EFF argues that when T-Mobile optimizes or downgrades video quality, it is in violation of the FCC's no-throttling rule.

It isn't clear yet whether and how the FCC will rule in this case, though at Swartztrauber notes, because of the United States' outsize global influence, that ruling will have a world-wide impact (and India has already shut down Free Basics, a stripped-down, zero-rated version of Facebook). A proposed zero-rated plan at the old carrier Metro PCS was important in the development of Net Neutrality and the current head of the FCC, Tom Wheeler, seems very interested in flexing his muscles. As important, the idea of the FCC (or any government authority) working things out on a "case-by-case" basis is deeply troubling as it guarantees confusion and un-level playing fields by building in the possibility of government action.

As Meyer observes: "This is another war against consumer empowerment, in the name of consumer empowerment. Not only are regulators always at least one step behind innovators, but their vague language stands in the way of innovation and competition. If the FCC rules against T-Mobile, it will serve as another example of regulators myopically focusing on one objective, while ignoring all the nuances and negative consequences of their crusade." Whole thing here.

The purported standard for much government regulation of business is supposed to be whether a particular rule or practice helps the consumer, not its effect on existing firms. In reality, that standard is rarely kept front-and-center in deliberations and the case for or against something is discussed largely in whether it increases or decreases the number of companies in an often-arbitrarily defined market. Hopefully, this sort of case, in which T-Mobile customers are getting a free service that they can either accept or reject, will help show that Net Neutrality is unnecessary at best and counterproductive at worst. Do we have more choices or fewer choices for better or shittier services when it comes to Internet and mobile carriers?

Despite what you've heard (including often-fantastical comparisons to foreign countries), things are getting better all the time on that front.

Court challenges to the FCC's Open Internet Order are proceeding apace, so all of this may be water under the bridge. Indeed, it is far from clear that the FCC has the statutory authority to be doing what it's doing.

Last year, FCC Commissioner Ajit Pai, who voted against Net Neutrality rules, called Net Neutrality "a solution that won't work to a problem that doesn't exist." Watch below. Read transcript here.