In November, T-Mobile, which recently became the third biggest mobile carrier in the U.S., rolled out a new promotion called Binge On that allows its consumers to watch “optimized” video from selected content providers without the data being counted toward a user’s monthly data cap. Affiliated content providers included some of the biggest names in over-the-top video, including Netflix, HBO Now, and Hulu.
What appeared to be another competitive new offering from the scrappy carrier quickly garnered controversy as the details of the program began to emerge. What exactly did T-Mobile mean by saying that it was “optimizing” video? The press started asking questions. Net neutrality advocates, such as Marvin Ammori, raised potential issues. Then, EFF, a noted Internet user advocacy non-profit, posted a detailed technical study and found that T-Mobile’s Binge On involved the slowing of all video on its network when Binge On was activated and that T-Mobile was not proactively “optimizing” video, but instead Binge On content partners were equipped with technology that allowed them to detect the slowing of the speed of video traffic and react by serving up lower resolution videos instead. Although some video delivery services can adjust to what they perceive as a slow Internet connection, some content providers cannot adjust their video delivery in these instances, and in those cases, the video slows and buffers. No change in resolution, just a slower, choppy video.
Chaos ensued. John Legere, T-Mobile’s outspoken CEO, kicked the rhetoric up a notch. He accused those who criticized the company of being “jerks” with an agenda and even used an expletive-laced video to question the integrity of EFF (probably not the best move, given the group’s uncompromising history and legions of loyal supporters). Needless to say, the strategy didn’t work. Many tech reporters swarmed accusing Legere of using bombast to cover up misleading comments — others had choicer words. Legere later issued a follow-up letter to customers that apologized for the EFF jab, but did little to directly address the charges of degrading video traffic speeds across the board.
Although some may contend that this sounds like semantics and marketing, the details of how T-Mobile carries out Binge On, and how it describes the program to customers, can have legal consequences. Given that the FCC’s recently enacted Open Internet Order includes a bright line rule that prohibits throttling traffic, and that it requires all network management practices to be reasonably targeted and clearly disclosed, the details are important.
Let’s take a deeper look.
The Controversy: What is T-Mobile doing?
T-Mobile’s marketing indicated that Binge On was “optimizing” video streaming for mobile devices. Furthermore, video from Binge On content partners would not be counted against the user’s monthly data allowance. What optimization meant was left ambiguous.
How is T-Mobile “optimizing” video? The short answer is T-Mobile is using packet identification technology to detect video streams on its network. In other words, T-Mobile knows when you are watching a video and targets that traffic. The technology it is using not only identifies unencrypted video traffic (through some kind of packet inspection), but also encrypted video streams. Although details have not been released on how it is doing this, technology, such as “inferred application” or “heuristic” classification, is commercially available that looks at many different characteristics of the encrypted traffic and determines what kind of traffic it is. (In a brief co-authored by Mozilla in the current Open Internet case before the D.C. Circuit, CCIA, the organization I work for, identified this technology as a reason why Open Internet rules are more critical than ever before.) Also, to be clear, from what is known, T-Mobile is not looking at the content of the traffic, just the “type” of traffic (and presumably where it came from so it can figure out if it is free or not).
Once it detects a video stream, T-Mobile reduces the speed of the data transmission down to 1.5 mbps. Binge On content partners can respond by serving a lower resolution video that is suited for the slower connection. Although some other non-Binge On content providers might be able to react with lower resolution video as well (this is currently unclear as commentary has been confusing on this detail), clearly a significant number of video content providers cannot. This is because, even if they are using adaptive bitrate technology, their server senses a faster connection and selects video accordingly, and when it starts shipping video, the “pipe” shrinks to 1.5 mbps when T-Mobile identifies the traffic as video. As a result, these video streams are simply slowed down, or, in technical terms, T-Mobile is capping the throughput of these video streams (aka “throttling”). When a T-Mobile user tries to stream video from one of these servers, the video doesn’t ship in lower resolution, it just slows down and it leads to poor quality video playback or slower download speeds. This throttling is certainly noticeable to T-Mobile users, as several have pointed out (see here and here as examples). And, as an aside, if other ISPs followed T-Mobile’s lead but implemented this type of traffic shaping in different ways, this would be a very difficult situation — to say the least — for over-the-top video content providers.
This is what EFF found when it tested T-Mobile’s network with Binge On enabled:
The first result of our test confirms that when Binge On is enabled, T-Mobile throttles all HTML5 video streams to around 1.5Mps, even when the phone is capable of downloading at higher speeds, and regardless of whether or not the video provider enrolled in Binge On. This is the case whether the video is being streamed or being downloaded—which means that T-Mobile is artificially reducing the download speeds of customers with Binge On enabled, even if they’re downloading the video to watch later…
Our last finding is that T-Mobile’s video “optimization” doesn’t actually alter or enhance the video stream for delivery to a mobile device over a mobile network in any way. This means T-Mobile’s “optimization” consists entirely of throttling the video stream’s throughput down to 1.5Mbps. If the video is more than 480p and the server sending the video doesn’t have a way to reduce or adapt the bitrate of the video as it’s being streamed, the result is stuttering and uneven streaming—exactly the opposite of the experience T-Mobile claims their “optimization” will have.
The graphical representation of EFF’s test results also shows higher streaming and download speeds for video when Binge On is disabled.
What many people are taking exception to is the framing that Binge On is “optimizing” video streams. Although one can debate semantics, T-Mobile’s optimization either leads to a lower quality video being delivered or video simply being slowed, which causes video stuttering or slower download speeds. The benefit to T-Mobile customers is that partner content is not being counted against their data plans. However, T-Mobile’s marketing attempted to position this as a win-win, “optimized” video which is free, instead of the more accurate tradeoff that it is: free video that is delivered in lower resolution. Furthermore, and where much of the problem lies, is that other video can be slowed. T-Mobile was certainly not clear about that aspect of the program.
Here is Mike Masnick’s take on Techdirt:
There is no optimization… They are 100% slowing down the throughput on video when they sense it. The EFF’s tests prove as much. Yes, for some video providers when they sense lower bandwidth, they will downgrade the resolution, but that’s the video provider optimizing, not T-Mobile. T-Mobile is 100% throttling, and hoping that the video provider downgrades the video.
Another controversial element of this is that Binge On is the default setting for T-Mobile customers. Current T-Mobile customers had it turned on, and new T-Mobile customers will be opted in when they sign up. Although Legere’s claim that users have a choice is technically true, opting out of Binge On is not simple. As a T-Mobile customer, I have opted out. I had to log into my online account, click through to Manage Account tab, and then select Media Settings, where there is a Binge On button with an on/off switch that gives no indication that there are benefits to turning it off.
Furthermore, according to the T-Mobile My Account website, it can take up to two hours to take effect (however, on Twitter, Legere said it takes 10 minutes). Users cannot toggle it on and off at will from their phone, like many other optional plan features. Consumer choice was further hampered by the confusing description of the program (more on that later), and failure to adequately explain the tradeoffs. Many consumers didn’t know there are benefits to turning it off, and, unless they read the tech press, probably still don’t know. And one more crucial element to this is T-Mobile’s aggressively marketed unlimited data plan. Many users — like myself — have signed up for T-Mobile’s unlimited data plan and are still opted in to Binge On. These users get few benefits from being enrolled in Binge On (if they are not among the 3% of unlimited plan power users who get throttled in certain circumstances after they hit 21 GB a month of usage), but still get lower resolution and/or slowed video speeds.
Why is T-Mobile doing this?
Quite simply, T-Mobile is doing this for business reasons. The infrastructure of mobile carriers is wireless spectrum. The more spectrum a carrier has, the larger the capacity of their networks. Spectrum rights are sold at auction by the U.S. government. It is a valuable and expensive resource. Therefore, the competitive carriers — like T-Mobile — have less spectrum than the two cash-flush, dominant wireless carriers, AT&T and Verizon. As a result, T-Mobile needs to be creative in the ways it uses its existing resources in order to compete. By opting its customers into Binge On, and throttling all video, T-Mobile is conserving its spectrum resources, and it is cheaper than alternative methods to improve its network, including buying more spectrum and/or building more towers (not to say T-Mobile isn’t doing those things too, talking about on the margins here). As one tech journalist put it, “Binge On is on by default because it saves T-Mobile a whole lot of bandwidth, which means it saves T-Mobile a whole lot of money.”
Legal Issues: Open Internet Rules and Disclosure
The technical operation and marketing of T-Mobile’s Binge On potentially create two interrelated legal issues. The first, as many Net Neutrality advocates point out, is that it appears that this is a violation of the FCC’s Open Internet Order’s no throttling bright-line rule.
The FCC’s Open Internet rules clearly banned carriers from throttling content by stating that they “shall not impair or degrade lawful Internet traffic on the basis of Internet content, application, or service, or use of a non-harmful device, subject to reasonable network management.” Furthermore, the FCC explained in the Open Internet Order:
[I]f a broadband provider degraded the delivery of a particular application (e.g., a disfavored VoIP service) or class of application (e.g., all VoIP applications), it would violate the bright-line no-throttling rule.
Although some of T-Mobile’s discussion has pointed to this throttling being permissible because it is “reasonable network management,” it is a flawed argument because it is going on at all times, for all plans, and users are opted into the program. If network congestion was the driving issue, T-Mobile has the capacity to only throttle traffic during times when the local network is strained, as this is exactly what it does for high volume unlimited data plan users who have crossed the 21 GB monthly threshold. As a result, it appears difficult to defend the throttling on those grounds, as the FCC determined, for network management practices to be deemed reasonable, they need to be
tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service,. . . [and] to be eligible for consideration under the reasonable network management exception, a network management practice that would otherwise violate the no-throttling rule must be used reasonably and primarily for network management purposes, and not for business purposes.
Because T-Mobile has the capacity to target and limit its throttling to times of network congestion, and its reasons for doing so are clearly driven by “business” motivations, it seemingly wouldn’t qualify for this exception, unless the FCC were to read the exception so broadly as to gut the entire no-throttling rule.
There are also very good public policy reasons for the FCC’s no throttling rule. Although a complete rehash of the Open Internet fight is beyond the scope of this blog post, Harold Feld of Public Knowledge summed it up well:
“Widespread throttling could prevent video providers from investing in high-definition and 4K technology.” In this way, broadband companies like T-Mobile “can warp the development of associated industries by making certain kinds of services hard to provide on a nationwide basis.”
To be fair to T-Mobile, they can — and probably will — argue that it isn’t a violation of the Open Internet rules because users can opt out. As I have discussed, the Binge On on/off switch is buried on T-Mobile’s website, and includes no disclosure of how the feature operates — thus not allowing customers to make an informed choice about whether to enable the feature or not.
And, according to the Open Internet Order, this detail matters:
We note that user-selected data plans with reduced speeds must comply with our transparency rule, such that the limitations of the plan are clearly and accurately communicated to the subscriber.
This brings us to the other interrelated legal issue: transparency. Did T-Mobile make the limitations of Binge On clear to users? Although I have touched on this, given the nature of this post, a deeper look is warranted.
It doesn’t appear that the company made the limitations clear to consumers. For example, T-Mobile says on its information page where it includes disclosures:
Many of our plans include the Binge On feature . . . which allows customers to choose to enable video streaming optimization when connected to the cellular network to deliver a DVD quality (typically 480p or better) video experience with minimal buffering while streaming, so their high-speed data lasts longer.
No mention of slowed video speeds or throttling. Even in the more convoluted description on data management practices farther down its website, nothing is made clear:
T-Mobile utilizes streaming video optimization technology throughout its network to help customers stretch their high-speed data while streaming video. Streaming video optimization also improves streaming video reliability by helping manage data usage on the network to ensure the best possible experience for all of our customers. Video optimization occurs only to data streams that are identified by our packet-core network as video. Some videos, like those consumed via VPN, may not be optimized. The streaming video optimization process is agnostic as to the streaming video content itself and to the website that provides it. While many changes to streaming video files are likely to be indiscernible, the optimization process may impact the appearance of the streaming video as displayed on a user’s device.
Specifically, most of our data plans include the Binge On feature, which customers may choose to turn on or off at any time. Binge On uses video streaming optimization when connected to the cellular network to deliver a DVD quality (typically 480p or better) video experience by managing the video stream. Binge On allows customers to control their video streaming experience, so their high-speed data lasts longer. The Binge On setting is not applied when a device is on WiFi and therefore all video on WiFi will be delivered at the native resolution.
Assuming that the average human being does not read “optimization” as “slowing down”, the only part of small print disclosure on a very long information page that hints at the video possibly being slowed down is the bolded text above. It is also entirely unclear what part of the “optimization” process T-Mobile is talking about. Is the optimization process the slowing down of video? Or is it when the content provider adjusts to the throttling and ships a lower-resolution video? Both of those affect the appearance of video on the screen of the user. And, at least for the slowing down of many non-Binge On partners, it is definitely not “indiscernible”. Nowhere is it clear to users that T-Mobile is slowing video down, let alone that many non-Binge On content partners will just have their video slowed with no resolution change at all.
T-Mobile has been all over the place in public statements. In fact, T-Mobile flat out denied it was slowing traffic down:
We aren’t slowing down YouTube or any other site. In fact, because video is optimized for mobile devices, streaming from these sites should be just as fast, if not faster than before.
Then EFF released the study showing that T-Mobile was in fact slowing down all video. That is when the now infamous Legere rant against EFF occurred, which ironically was the same day that a T-Mobile PR representative confirmed to Wired that what EFF found was indeed true:
T-Mobile customers who activate the company’s controversial Binge On video service will experience downgraded internet connection speeds when viewing videos on YouTube or other sites that don’t take part in Binge On, a T-Mobile spokesperson confirmed today. They’ll also experience slower speeds when trying to download video files for offline use from websites that do not participate in Binge On, at least until the customer deactivates the service.
In John Legere’s apology to EFF, he makes some clarifications, but largely sticks to the “optimizing” line. In fact, there is only one part that could be read to reveal T-Mobile is slowing down video traffic, but once again it is so vague as to be indecipherable.
We use our proprietary techniques to attempt to detect all video, determine its source, identify whether it should be FREE and finally adjust all streams for a smaller/handheld device.
In the same letter, Legere states that all T-Mobile customers received an email describing the Binge On functionality:
First we reached out to all of our customers via email and SMS message, and told them all about the new functionality that was coming their way. Then we turned it on, for everyone!
Well, I am a T-Mobile customer and I received that email (you can view the screenshot here). Nowhere does it say anything about the slowing all video traffic, or the potential side effects for the video of non-Binge on partners. Not even in the fine print. And it doesn’t say anything about it on the click-through page for “more details”.
Seeing that this is a two-week-old game of semantics, T-Mobile reps can argue all they want about the meaning of “optimize” and “adjust.” I think it is pretty safe to say — given the media circus — that the facts of the Binge On program have not been clearly articulated to consumers — at least not in anything made available directly to consumers through official T-Mobile channels.
And it is this rhetorical game of hide the ball, coupled with the automatically lumping all T-Mobile customers into Binge On, that likely implicates the FCC’s 2010 transparency rule, which was upheld by the D.C. Circuit in the Verizon case:
A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.
Why should we care about all this?
First, I want to say that I like T-Mobile. In fact, I am generally a happy T-Mobile customer. It frequently shakes up the market and puts competitive pressure on the dominant wireless carriers. Over the last few years, T-Mobile has become the fastest growing wireless company by being a maverick (i.e. a smaller company that maintains competitive pressure on market leaders through aggressive pricing and consumer-friendly business model innovation). Besides aggressive pricing, it was the first national carrier to embrace the open-source Android operating system (which has proven a boon for consumers and device competition) and the first to do away with two-year contracts, a strategy the big guys are now embracing too. As David Pogue recently noted, T-Mobile “has spent the last three years systematically shredding every traditional policy that we the people despise.”
Yes, I think T-Mobile should take the high road, admit its mistake, make Binge On opt-in, not throttle video from non-Binge On partners who haven’t signed up for it, and clearly explain to customers how the program works. Not in hyped marketing language, but in easy-to-understand terms. Some consumers, particularly those with lower data caps, might prefer to have it on all the time. Some might want to choose to activate it when they are watching a lot of video or getting close to their data limit. Also, there are customers like myself who are unlimited data customers who get very little benefit from it and would likely not turn it on at all.
What I really worry about is hopefully something Mr. Legere could agree with me on. If T-Mobile continues operating Binge On the way it is now, there is no good outcome. Now that the FCC is investigating the program, two things could happen. One, the FCC accuses T-Mobile of violating the Open Internet rule, sanctions the company and possibly fines the company for it. The second, and more troubling outcome, would be if the FCC fails to enforce the throttling and transparency rules. If this happens, then the dominant wireless providers will use the same lax interpretation of the toothiest parts of the Open Internet Order to excuse their own bad behavior in the future. As Karl Bode of DSLReports notes:
What Legere is missing is that net neutrality is about a clean connection to the content of your choice without a telecom carrier injecting itself into the equation (for any reason). Allow T-Mobile to start fiddling with user traffic, neutrality advocates warn, and it opens the door to AT&T and Verizon’s fiddling with user traffic in more problematic fashion.
I’ll end this on a happy note for T-Mobile. T-Mobile did a lot of great things last year, and as a result it added 8 million new customers. And, this year, the company will likely add a large chunk of new spectrum in the upcoming incentive auction, thus expanding the capacity of its network. Hopefully, going forward, T-Mobile will amend the Binge On program and stick to its mission of empowering customers — not just with marketing hype, but clearly explaining to its users how its features work and giving them a real choice, not making one for them.