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Why Free Services From Telecoms Can Be a Problem On the Internet
HughPickens.com writes: T-Mobile said last week that it would let customers watch as many movies as they wanted on services like Netflix and HBO as well as all other kinds of video, without having it count against their monthly data plans. But the NYT editorializes that there are real concerns about whether such promotions could give telecommunications companies the ability to influence what services people use on the Internet, benefiting some businesses and hurting others. Earlier this year, the FCC adopted net neutrality rules to make sure that companies like T-Mobile, Verizon and Comcast did not seek to push users toward some types of Internet services or content — like video — and not others. The rules, which telecom companies are trying to overturn in court, forbid phone and cable companies to accept money from Internet businesses like Amazon to deliver their videos to customers ahead of data from other companies. The rules, however, do not explicitly prevent telecom companies from coming up with "zero rating" plans like the one T-Mobile announced that use them treat, or rate, some content as free.
"Everybody likes free stuff, but the problem with such plans is that they allow phone and cable companies to steer their users to certain types of content. As a result, customers are less likely to visit websites that are not part of the free package." T-Mobile has said that its zero-rating plan, called Binge On, is good for consumers and for Internet businesses because it does not charge companies to be part of its free service. "Binge On is certainly better than plans in which websites pay telecom companies to be included," concludes The Times. "But it is not yet clear whether these free plans will inappropriately distort how consumers use the Internet."
"Everybody likes free stuff, but the problem with such plans is that they allow phone and cable companies to steer their users to certain types of content. As a result, customers are less likely to visit websites that are not part of the free package." T-Mobile has said that its zero-rating plan, called Binge On, is good for consumers and for Internet businesses because it does not charge companies to be part of its free service. "Binge On is certainly better than plans in which websites pay telecom companies to be included," concludes The Times. "But it is not yet clear whether these free plans will inappropriately distort how consumers use the Internet."
Yeah, but 'free' video-over-ip is a clear conflict of interest.
For example, Comcast plans to start offering it's own video service and that won't count towards your 300GB cap. Surely you can see that this places Netflix and other streaming services at an unquestionable disadvantage.
The problem I had with charging services like Netflix and Hulu for special treatment is that it incentivizes ISPs (especially cellular ISPs) to provide a worse service to their end-users than is needed to fully enjoy streamed video content so they can effectively turn around and charge high bandwidth services a toll to access users on their cellular network.
This system from T-Mobile has a different incentive structure behind it though based on what I heard. Netflix and Hulu are NOT paying T-Mobile, they are just cooperating to make sure their data is not counted against T-Mobile's customer's data usage caps, which increases the value of all three companies services. T-Mobile has an incentive to offer this deal to any web-service that is well known and desirable enough to their end-users that offering access without a data cap improves the apparent value of T-Mobiles service.
As A T-Mobile customer who would potentially benefit from this service: It should be illegal and I do not want it. Its perfectly clear what this kind of perverse bias is going to do, and I don't want my ISP charging me more to watch video if its through my VPN, or from some source they want to censor, or from my home server. They can jack up the data prices and offer free services like this as an easy way to deploy a walled garden for high bandwidth content. Its absolutely unacceptable for my ISP to have both legal immunity for what they enable me to do over the connection, and control over it. They either need to give up their legal protections from being a common carrier, or give up their control.
Once again a dead-tree newspaper demonstrates total lack of technical awareness.
Though they do mention how Binge On actually works (implement the technical requirements, fill out a form, and it works) they try to imply that T-Mobile will choose to exclude services based on their own non-technical criteria.
T-Mobile so far has shown they're not going to exclude competitor's services, and said that they won't exclude services based on content. Of course, NYT's editorial staff probably can't understand the technical aspects of the service, and what they know of the business doesn't fit their narrative. While the NYT might think so, "Binge On" does not appear to be designed to steer user's content choices.
This reminds me of the Washington Post claiming that technical companies could come up with a "golden key" for law enforcement to break encryption and somehow magically prevent criminals from using it (and then accusing tech companies of lying about it). It's just technical illiteracy mixed with contempt for the industry they see as "destroying journalism".
The right to protest the State is more sacred than the State.
On one hand telecoms are saying "We have to impose data caps because of the strain on our networks!" and then they turn around and make the most popular data heavy applications not count against your cap. Why are they not being called out more frequently and audibly about this blatant self-contradiction?
To me, it means I will use my Netflix in an airport, when I never would have before. That's a change in usage patterns, it influences my choice of content providers. If another major player like HBO-Go were not included and I decided I would only keep one service: Netflix or HBO-Go, the one that is included on my cellphone plan for free has a huge competitive advantage.
Now - have you ever heard of MangoFlix? No, you haven't, because all these entrenched services have locked up deals with content providers, and now connectivity providers, making it impossibly expensive to start up a competitive service. You know, like a competitive service that actually streams a decent collection of Movies, and not just stale TV series and in-house produced content.