AT&T has called for the FCC to investigate the throttling of videos on its network by Netflix, but as Netflix is a well-known defender of net neutrality and AT&T has a poor track record in that area, it’s unlikely that the FCC will take the US operator seriously.
Netflix has admitted to capping videos at 600 Kbps, meaning a resolution of 360p, over the mobile data networks of AT&T and Verizon, and claims to have been doing so for the past five years. The SVoD giant says it carried out this throttling due to the restrictive data caps imposed by AT&T and Verizon, while the networks of Sprint and T-Mobile have been spared any video throttling due to their more consumer-friendly reputation around caps, according to Netflix. It is fairly well understood that AT&T is the overage king of the US, charging everything above a data cap punitively.
For example, Sprint and T-Mobile purposely slow down the connections of customers when exceeding their data limits, instead of slapping them with additional fees. This is a very considerate business model from the two MNOs, and for those who would rather pay the extra fee than have their connection slowed, then it’s probably best to switch networks. Sprint’s unlimited data plan costs a monthly fee of $75, T-Mobile’s costs $95, and AT&T’s costs $100 (for DirecTV or U-verse customers only), while Verizon has recent publicly shot down any rumors of plans to revive an unlimited data plan.
The FCC’s net neutrality regulations apply to the direct relationships between telcos and cable companies and any outside companies such as Netflix or Google. So as long as Netflix isn’t paying Sprint to prioritize its videos, for example, then it is not in violation of any net neutrality laws, and therefore Netflix, or any other streaming service, can charge what it likes and provide its content to the consumer at whatever speeds are deemed feasible. Since Netflix has no network, it cannot breach net neutrality.
Having said that, FCC Commissioner Michael O’Rielly said this week that he agrees that Netflix is not breaking any net neutrality laws, but added “the news is deeply disturbing and justly generates calls for government – and maybe even Congressional – investigation.” O’Rielly has always been anti Title II and pro big business. He added, “It appears that Netflix made accusations of wrongdoing by ISPs, all the while knowing that its own practices were one of the causes of consumer video downgrading.”
Of course this is disingenuous, because other ISPs throttled back Netflix and so Netflix exposed them, and these are overcharging their customers who Netflix has helped out. The Netflix position in both cases has been pro-consumer.
If T-Mobile’s Binge On service is the Robin Hood of the mobile video revolution, then we can now officially add Netflix to its band of Merry Men – as Netflix has announced it will soon introduce a data saver feature for mobile apps. This will give users the option to either stream more video under a smaller data plan, or increase the video quality if they have a higher data plan. Netflix says the data saver feature should be available to its subscribers sometime in May, and the company said it has capped its default bitrate for streaming video over mobile networks at 600 Kbps. Netflix is already part of T-Mobile’s Binge On data-saving service, which launched in November 2015 to much criticism from the likes of The Electronic Frontier Foundation (EFF).
A Netflix spokesperson said, “Our research and testing indicates that many members worry about exceeding their mobile data cap, and don’t need the same resolution on their mobile phone as on a large screen TV to enjoy shows and movies. However, we recognize some members may be less sensitive to data caps or subscribe to mobile data plans from carriers that don’t levy penalties for exceeding caps. As we develop new technologies, we want to give all our members the choice to adjust their data consumption settings based on their video preferences and sensitivity to their ISPs data overage charges.”
The two largest mobile carriers in the US, AT&T and Verizon, make an absurd amount of money from overage charges to customers (estimated at $1 billion a year) and both companies have suffered the consequences of breaching rules in the past. In 2015, AT&T was slammed with a $100 million fine by the FCC for violating net neutrality regulations when it massively slowed down its so called “unlimited” data plan. Also last year, Verizon was fined $90 million by the FCC for hiding extra charges in the bills of its customers. It’s worth noting that while Sprint and T- Mobile appear to be the good guys, Sprint has previously been fined $68 million for similar malpractices as Verizon; and T-Mobile had to shell out $17.5 million in 2015 for bizarrely blocking 911 emergency calls.
AT&T’s cries for help sound like a final attempt to hold onto something in a battle that it has well and truly lost – we’d be extremely surprised if the FCC decides to follow this up.