Why T-Mobile’s new ‘free’ data plan is bad for the Internet -- and worse for you

T-Mobile’s chic and brash CEO, John Legere, seems to have persuaded the world at large that his company’s new Binge On program is an unalloyed boon to the consumer and a thumb to the eyes of T-Mobile’s rivals.

The feature, which exempts the video streams of numerous leading video services from usage caps, certainly sounds great. It’s not. It’s a fundamental threat to the open Internet, and it’s sure to come back and bite consumers where it hurts.

Here’s network expert Susan Crawford of Harvard Law School on the concept of “zero-rating,” the favoring of specific content providers with exemptions from consumer data limits:

“Zero-rating is pernicious; it’s dangerous; it’s malignant,” she wrote earlier this year. “We should outlaw it. Immediately. Unless it’s stopped, it’s not going to go away.”

Network neutrality advocates Public Knowledge also sounded the alarm. “Turning the mobile Internet into a carrier-controlled walled garden is ultimately a bad idea for consumers, for all online services (even those included in T-Mobile’s zero-rating today), and for the wireless industry as a whole,” said John Bergmayer, a senior staff attorney, in a prepared statement.

Legere tried to proactively defend Binge On from such criticism during the Los Angeles event at which he introduced the feature Tuesday. “This is not a net neutrality problem,” he said. The fact that Legere is trying to define away the net neutrality implications of Binge On only makes it more pernicious.

Binge On is an expansion of the Music Freedom program T-Mobile introduced last year, which exempts Spotify, Apple Music and some other music streaming services from customers’ data plans. The new program covers Netflix, HBO GO, Showtime and about a score of other video streams -- but not the Google-owned YouTube. The reason for the exclusion isn’t clear, beyond that YouTube either couldn’t or wouldn’t meet T-Mobile’s specifications. That’s not to say the exclusion might not be temporary.

For mobile users, T-Mobile will cap the video streams for its Binge On partners at DVD quality, or 480p, which isn’t as good as you can get on a full-Internet service at home. For users watching on their phones via Wi-Fi connections, the quality will be better.

So what’s wrong with this? The principle of network neutrality, which President Obama and the Federal Communications Commission ostensibly favor, is that no services or data providers will be favored or disfavored by Internet service providers. That means no blocking, no throttling and an “explicit ban on paid prioritization,” Obama said almost exactly one year ago. “No service should be stuck in a ‘slow lane’ because it does not pay a fee.”

T-Mobile isn’t charging content providers to be included in Binge On or Music Freedom, but it is setting its own standards for inclusion. “Anyone who can meet our technical requirement, we’ll include,” Legere said. But T-Mobile hasn’t published its “technical requirement,” and of course reserves the right to define it, setting the bar wherever it wishes for entry into the program.

Plainly, big incumbent content providers are in the best position to meet any terms or standards T-Mobile sets. Netflix’s business needs already have prompted it to pay ISPs such as Comcast for preferred access to their networks to reach their subscribers among Comcast’s customers with the highest-quality picture and sound.

But what about start-ups, or non-video or -music content providers on the Web? They might not have the wherewithal to guarantee DVD-quality streams or may be offering content that gets shunted aside so Netflix and HBO roar past on the express lane.

It’s a short step to expanding zero-rating beyond music and video to other forms of data, offering improved access to companies willing to meet the ISP’s terms.

“Can you imagine trying to launch a competitor to Facebook,” Crawford asked, “where most of your potential customers will have to pay data charges for your service -- while the incumbent Facebook is exempt?”

The FCC’s network neutrality policy would seem to bar these arrangements. In its February open-Internet order establishing the rules for network neutrality, however, the agency signaled a hands-off approach to them. “We are mindful of the concerns ... that sponsored data plans have the potential to distort competition by allowing service providers to pick and choose among content and application providers,” the commission said. But some “could benefit consumers and competition.”

Programs such as AT&T’s sponsored data deals, in which content providers can pay the ISP a subsidy to cut the data cost of their services for customers, would be reviewed on a case-by-case basis -- after they’re implemented -- the FCC said.

The FCC doesn’t appear to consider Music Freedom a problem, because no money is changing hands and consumers are getting access to the music they like. It’s a good bet that the FCC will view Binge On through the same prism.

But there’s no question that these programs put more power in the hands of ISPs such as T-Mobile -- and that’s a threat to network neutrality. The consumer benefits are immediate, but in the long term they could be illusory. This is how net neutrality dies: piece by tiny piece, each chipped away in the guise of giving consumers the tempting bribe of “free” data.

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