
Exempting popular apps from data charges is anti-competitive - steven
https://medium.com/backchannel/less-than-zero-199bcb05a868
======
freehunter
I agree that data should be data and having companies pay (or otherwise sign
up to be exempted) should be considered anti-competitive in such a regulated
industry. But that belief won't stop me from using the exemption until the
minute the FCC requires otherwise.

My carrier (T-Mobile) exempts streaming music services. It doesn't charge for
the exemption and any music service can sign up for it, but it's still against
net neutrality principles. It's better than AT&T's method, but only by a
little. However, when they started this, I was able to cut from an unlimited
plan to just 1GB/mo, and never suffer overages.

Do I disagree with it? On principle, yes. But I'm going to keep disagreeing
with it while simultaneously using it as a way to lower my bill while getting
around silly and even more innovation-stifling (IMO) data caps and high price
mobile broadband.

~~~
maxerickson
Isn't that then more of a preference and less of a principled disagreement?

~~~
freehunter
I disagree with their policy in principle. In practice, I use the hell out of
it. I frequently drive long distances (over an hour each way) streaming music
from Spotify the entire way.

I would rather have no data cap the same way my home Internet connection has
no data cap. I would rather they not make exemptions for music specifically,
since that shows they don't need the caps in the first place. But as long as
they offer it (and I used T-Mobile long before they announced it), I will use
it to my advantage.

~~~
maxerickson
I'm whining about your phrasing. I wish people only used "principle" to
describe very strongly held beliefs.

You are weighing your belief that 'data is data' against, basically, a trivial
convenience (you have many options, among them: no music, downloaded music,
cheap streaming violating the principle, expensive streaming respecting the
principle). That action says something about how strongly you believe in 'data
is data'.

~~~
mdpye
If you want to talk about the phrasing, I think you're missing a subtle
distinction.

He disagrees IN principle, not ON principle.

As in, he disagrees in principle, but not in practice. As I understand it, "on
principle" is the construction describing taking a stand on a decision because
of your deeply held convictions. "In principle" is for a decision you've
derived logically from a set of abstract premises.

~~~
maxerickson
The first comment in the thread uses "on principle". The next one uses "in
principle", but I think it is used there to describe a belief.

I could very well misunderstand, I don't know (or the usage above could be
loose).

I guess part of my problem is that I have trouble with a construction like "In
principle, I believe in the sanctity of human life. In practice, sometimes you
have to execute bad people."

(I think) That's better expressed as a preference that people not be killed.
It's a silly extreme example, but I'm having trouble seeing how else it would
be used, in a mechanistic sense.

~~~
freehunter
It's more of "my principles tell me that this policy is wrong. However, I
don't have the ability to make it right or avoid using it. So until it's set
right by someone who DOES have that power, I don't have a choice."

So to use your analogy, I believe in the sanctity of human life. But my
government doesn't. _I_ don't kill anyone, but I live in a country that does.
The fact that my government kills people won't stop me from driving on the
government-built roads.

However you want to word it, I disagree with T-Mobile and AT&T's net
neutrality policies. But I'm not in a position of power to make them change
that, so what can I do?

------
spost
The article calls out AT&T and Sprint for their programs, thought I'd mention
that T-Mobile has something similar going on with their Music Freedom program:
[http://www.t-mobile.com/offer/free-music-
streaming.html](http://www.t-mobile.com/offer/free-music-streaming.html)

~~~
Someone1234
I was going to point out the same.

I really like T-Mobile's program since a lot of my data usage was disappearing
into streaming music (namely Google Music/Play Music). However I will fully
admit it is anti-competitive since if you're a new music streaming service
just trying to make it, you won't get onto T-Mobile's free list (and even
Google Music/Play Music wasn't until extremely recently, like even two months
ago it wasn't).

However as much as I like and benefit from this program, I think the world
would be a better place if all data was treated equally. I'd actually be
willing to sacrifice this program if it meant a more fair internet, and I
benefit from it...

~~~
frizzlebox
Adding to this, the T-Mobile FAQ claims they're willing to add legal services
if you contact them:

[http://www.t-mobile.com/offer/free-music-
streaming.html](http://www.t-mobile.com/offer/free-music-streaming.html)

    
    
      Will you add more streaming providers over time?
      
      Absolutely!  Any lawful and licensed streaming music service can work with us for inclusion in this offer, which is designed to benefit all of our Simple Choice customers.  And we want to hear from you!  Who do you think we should add next?  Vote at #MusicFreedom and be heard!
       
      If you are a streaming service provider Click here, send us an email and we’ll get back to you to begin the process.
    

Doesn't make it any less anti-competitive, I think, but it feels nice to see
this kind of promise.

~~~
whyaduck
Yes, definitely anti-competitive (he says as he changes Spotify's streaming
quality to "Extreme" on his T-Mobile serviced phone).

~~~
frizzlebox
I honestly wrote that "anti-competitive" bit so it wouldn't look like I was
defending anyone. You caught me trying to preempt being called a shill. It
didn't work.

~~~
whyaduck
I hope you didn't think I was calling you a shill - I literally changed my
Spotify settings after I read about T-Mobile's policy in this article. Re-
reading, my post could have been read differently. Sorry!

------
notwedtm
In the article the comparison of everyone sharing the same road infrastructure
is given. Why is the analogy not carried over to public transportation? There
are plenty of people who are willing to pay a much lower cost per trip by
riding public transportation instead of driving (or even owning) a car. Nobody
is claiming that the bus system is anti-competitive to car manufacturers.

In fact, the author even states that people could be satisfied by this
approach. If people are satisfied with their walled garden, why is this an
issue?

~~~
biot
The analogy is off. Bus vs. car riding on the road is equivalent to the
packets which ride on top of the underlying internet infrastructure. That some
people group their information into the same packet (a bus) vs. dedicating the
packet to themselves (a car) isn't relevant to the discussion around why the
cost of transporting the packet is based on the destination.

Imagine if all the roads were toll roads. Regardless of whether you take a
bus, car, taxi, bicycle, etc. the toll is waived if you're traveling to
McDonald's whereas you have to pay the toll if you're traveling to Burger
King. Shouldn't it be like electricity where you pay per kilowatt-hour
regardless of the use? Or should powering, say, Sony devices cost you nothing
but you get charged for powering other devices?

------
anindyabd
I'm not sure how much competition Wikipedia has as a free online encyclopedia.
Also, Wikipedia is a non-profit, and doesn't really make more money by having
more people use the site. It's strange to claim that Wikipedia is being anti-
competitive. Personally, I think Wikipedia Zero is a great program.

The article also says:

> The reason that the Chinese, Russian and Cuban governments fear an open
> Internet more than anything else is that it allows users to gather and speak
> to one another. But users of a walled-garden “zero-rated” Internet can’t
> even click links that go outside the garden.

It's true that users can't go out of the sites they have free access to. But
services like Facebook, Twitter and Whatsapp _do_ allow people to "gather and
speak to one another". In fact, Twitter and Facebook were prominent in the
lead-up to the Arab Spring.

~~~
kassemi
_I 'm not sure how much competition Wikipedia has as a free online
encyclopedia._

Any other encyclopedia and any wiki-formatted knowledge store could be
considered close competition. Wikipedia's in the business of providing high-
level (and often low) level information, and there are tons of players in that
space - just perhaps not as generalized and overreaching.

 _Wikipedia is a non-profit. They don 't really make more money by having more
people use the site_

Which doesn't mean that it can't compete with other entities, just that it
does so under a special set of rules. It's still in the best interest of
Wikipedia to keep up traffic.

~~~
anindyabd
> It's still in the best interest of Wikipedia to keep up traffic.

That interest is clearly _not_ "making more money". Can you explicitly explain
what those interests are? I may be naive in believing that Wikipedia's goal is
"making all the world's information freely available to everyone". But if they
have some other ulterior motive for expansion, I would like to know what that
is.

~~~
crazypyro
At the very least, each of their employees' has a selfish reason to keep
Wikipedia the de-facto encyclopedia. For instance, they have over $20 million
in salary they need to pay every year and without traffic, they lose donations
(over $45 million a year) and therefore could lose their jobs. Seems a
monopoly would be in their interest.

[http://upload.wikimedia.org/wikipedia/foundation/b/bf/Audit_...](http://upload.wikimedia.org/wikipedia/foundation/b/bf/Audit_Report_-
_FY_13-14_-_Final_v2.pdf)

------
jlawer
While I strongly agree in net-neutrality principles, there is the case that in
these scenarios the data may not have the same costs to provide, and some may
be cheap enough that it doesn't make sense to charge from.

In Australia at least general internet transit is orders of magnitude more
expensive then a local peering connection. If the content provider is making
the content cheaper then the general internet traffic, then it seems quite
reasonable for that saving to be passed on to the customer.

While I love the abstraction that you simply pay a fixed rate per bit/byte, it
doesn't accurately portray the connectivity situation at least in Australia,
where international transit, and even inter-capital city transit can be a
sizeable portion of any costs.

I pay rough costs of $2000 per month for a 100 Mbit / 5TB per month service to
my rack in a DC, but I can pay $750 per month for a 10gbit service to a
peering (IX) Internet Exchange in the same DC. If I was providing an ISP
service I think it would be completely reasonable to not charge for traffic
over the peering link as the data is nearly 300x cheaper, its quite possible
it would be cheaper to simply not track the usage.

It does create a situation where competition is harder, where a content
provider may need to deploy many POPs to ensure their content is available
under a peering situation, however I don't see this is inherently anti-
competitive.

------
byuu
It's funny that when Netflix has to pay for preferential treatment, it's a bad
thing ("my bill might go up!"); but when it's Spotify getting unlimited data,
it's a good thing ("my bill might go down!"). You can't eat your cake and have
it too.

~~~
shkkmo
I'm confused. Isn't the argument presented in the article that they are both
anti-competitive (and hence "bad things")?

~~~
byuu
Yes, I agree with the article. I'm saying that people in general (even in this
topic) seem to not mind the issue when it's personally advantageous to them.
(if that weren't the case, the article would merely be stating the obvious and
not be newsworthy.)

And I'll admit that unlimited streaming music does sound nice. But net
neutrality is important to me, and so it would be hypocritical of me to
dismiss it when it benefits me.

------
userbinator
Coming from a place where this practice is banned, I wonder how they implement
this. Traffic going to certain IPs or IP ranges is exempted? They mention
WhatsApp and Twitter, and the first thing that comes to mind is using them as
proxies to tunnel through. I don't think it would be against ToS either -
you're just asking someone else on the "other side" of those services to
access the 'net and get the information for you, and it shouldn't matter one
bit if you're speaking English or TCP/IP. :-)

(There's plenty of info on the internet about wanting to use these services
while behind a proxy, but seemingly none on using them _as_ a proxy...)

------
SixSigma
My mobile contract in the UK is $20 per month for 1000Gb on 4G with tethering
permitted, 5000 voice minutes to the same carrier, 2000 voice minutes to any
other carrier and 5000 text messages.

It is not just the Zero Rating that is evil.

~~~
toomuchtodo
I'm paying $50/month in the states on T-Mobile for unlimited text/voice and
2.5GB of data, no tethering permitted.

EDIT: Yes, I still tether, I stated it for completeness. You can get around
the tethering nag by using SSL or VPN when tethered.

~~~
yellowapple
There's a tethering nag? I'm not paying for tethering either, but I'm still
able to do it without T-Mobile yelling at me (as I've had to do several times
due to network issues with my ISP).

~~~
ac29
I never saw it until I used over 1GB in a day (out of my total 5 per month).

------
sliverstorm
Since when has sweetening your offerings been viewed as anti-competitive?
That's all "data sponsoring" is; making your product more compelling through
the use of cash. Is using money to make your product attractive now anti-
trust?

I flipped through Wiki for a refresher, just to make sure.

[http://en.wikipedia.org/wiki/Anti-
competitive_practices](http://en.wikipedia.org/wiki/Anti-
competitive_practices)

~~~
seattlegal
It's anti-competitive to app devs, not other wireless providers. Classic "pull
the ladder up behind me" behavior.

~~~
sliverstorm
I'm expressly talking about the app devs.

It might be truly anti-competitive "ladder-up-behind-you" if all app devs were
_forced_ to sponsor client-side traffic. Think of taxi tokens- a fixed barrier
to entry.

But even then, to be an anti-competitive barrier to entry it must also be
_high_. The cost of a postage stamp on your government paperwork is a barrier
to entry, but it is not anti-competitive.

~~~
ksk
To me, its similar to a supermarket only allowing already-popular brands to be
on their shelves. From their POV I guess it makes sense, but if you're out
there selling a new brand of peanut butter, you can either start your own
supermarket, or target the mom-pop stores and hope for the best.

I think this kind of stuff is highly regressive. The Internet was this place
where you succeeded on your own merit and not because you pay-to-win. A place
where a tiny company like Google was able to sell their service because it was
on the same playing field as lycos/yahoo/altavista. If accessing Google cost
you money while lycos/yahoo/altavista were free, nobody would have ever tried
Google. And without enough people searching and clicking on links there will
never be enough seed data for a good ranking algorithm to work.

~~~
sliverstorm
The supermarket is a good example. That's already how it is, all the time, and
yet we still get incumbents. Have you seen how many different kinds of jams,
jellies, and peanut butters have taken hold? Yes, it's a challenge to be the
new guy on the block, but that is just the nature of the beast. Now, if Jiffy
_paid_ supermarkets not to stock other brands of peanut butter, _that_ would
probably be anti-competitive.

 _If accessing Google cost you money while lycos /yahoo/altavista were free,
nobody would have ever tried Google._

We can't know for sure, but IMO this is totally not true. The cost for one
search worth of traffic is tiny, and their results were superior.

~~~
ksk
>Yes, it's a challenge to be the new guy on the block, but that is just the
nature of the beast.

So, we already have a better system (internet), and you want to go back to a
worse system? Honestly, I don't know if you're trolling me at this point.

------
lquist
I'm surprised this discussion didn't come up when FB acquired Whatsapp. IMHO,
zero rating explains a significant chunk of Whatsapp's $19B price tag. Zero
Rating is a valuable moat, and makes Whatsapp that much harder to unseat by
rival apps. Also zero rating is particularly common in the countries that
Whatsapp dominates.

~~~
shkkmo
Facebook is also one of the principle sponsers of the push to bring zero
rating to "the 2/3rds of the world that don't have internet":

[https://www.internet.org/press/introducing-the-internet-
dot-...](https://www.internet.org/press/introducing-the-internet-dot-org-app)

I believe some of internet.org's strategies are good. I'd be a lot less
skeptical if 'facebook' weren't on that list of 'basic apps'

------
rlvesco7
On the similar note, the NFL app on my android, which was installed without
permission and cannot be deleted, sends 10s of megabytes of data to Verizon
even though I've never opened it once. What it's sending, I don't know, and
it's using up my data plan for no reason.

------
nkangoh
Though I agree that in many situations it is anti-competitive, I think it
would be difficult to tell someone who has a small data to work with that
you're going to take away their currently free access to Facebook, Wikipedia,
etc.

~~~
AnthonyMouse
So don't. Facebook and Wikipedia don't require a huge amount of bandwidth,
that's _how_ they can be free. Just stop discriminating. Give people a mode
they can switch on where they don't get charged for data but get capped at
0.5Mbps.

~~~
mmebane
This is my preference. I think the only reason T-Mobile offers unlimited music
streaming is that it typically consumes <= 256 kbps. I would much rather they
offered an "economy mode" switch where I could throttle my entire device and
browse whatever I wanted.

~~~
sliverstorm
T-Mobile offers unlimited music streaming because it is marketable. They are a
third-wheel carrier, so they are hustling hard in search of a way to
differentiate themselves, and "Unlimited Music" is going to be a much more
successful ad campaign than "Unlimited 256kbps Browsing"

FWIW I am a T-Mobile customer.

~~~
AnthonyMouse
So market it as "Unlimited Music" and implement it as "Unlimited 256kbps
browsing".

------
sogen
Yes. Data is still way too expensive in Mexico:

$1USD = 8mb ($2 MXN = 1 mb)

In context: Daily wage in Mexico is $4 USD

Yes, 4 dollars...

------
mwsherman
This article seems to equate two things – that which is true today, and that
which the writer imagines for the future. The future is not fact.

The fact of zero rating is that it is beneficial to consumers, and progressive
– the poorer one is, the more zero-rating is likely to help. That is factual,
observable, measurable.

The speculation is a slippery-slope argument, and not factual. That doesn’t
mean it’s wrong, but simply that it’s a priori.

Zero-rating is free shipping. I don’t know of anyone that considers free
shipping anti-competitive, though one could make the same argument.

~~~
chimeracoder
> Zero-rating is free shipping. I don’t know of anyone that considers free
> shipping anti-competitive, though one could make the same argument.

That's a bad analogy. A better analogy would be USPS[0] providing certain
_shippers_ with free shipping, and not others[1]. Imagine the disastrous
effects this would have on small sellers, who would certainly not have the
means to negotiate these rates with USPS, whereas a larger company would.

So it's not a slippery slope, because the anti-competitive impact is direct
and immediate. USPS has to charge everyone the same price for the same
service, and for good reason.

[0] Like broadband ISPs, USPS has an effective monopoly on shipping in parts
of the country, as private carriers (UPS/FedEx) will simply "offload" certain
deliveries to them, as USPS is required to ship to all locations.

[1] USPS does offer, for example, "Media mail" discounts, but this is
available to all shippers, and represents a different service (slower
delivery, no guaranteed dates - in the olden days, it represented surface
shipping, though I'm not sure that is the case anymore).

~~~
jschwartzi
UPS does actually do something like this. If you buy a UPS label online
without an account, you pay what's called "list price," which is the full
advertised price for shipping. However, if you're a shipper with an account,
UPS will discount your shipping below list price if you do a lot of business
with them. I've seen up to a 20% discount for parcels shipped UPS Ground on a
small company's account.

I don't have any data on this, but I suspect that some combination of the list
price discount and some special contractual arrangements are what allow Amazon
to offer services such as Prime for such a low price. List price for a 1 lb
next day air shipment were on the order of $50.00 last time I shipped
anything.

------
brudgers
Why shouldn't something like Wikipedia that is relatively easy for a carrier
to cache locally be charged differently than something for which providing
access requires inter-carrier agreements?

It's just an extension of not paying per use of jquery mobile because there's
a copy cached on my phone. It's congestion pricing.

~~~
userbinator
It's not only Wikipedia; it's Facebook, Twitter, WhatsApp, and other services.

I'm pretty sure you can't cache IMs, as that defeats the whole "instant" part.

~~~
brudgers
A lot of Facebook, Twitter, Google, etc. can be localized. People 'Like'
button local businesses live near their friends, they mostly follow people who
produce lots of content, they search for local and regional businesses.

Facebook's CDN: [http://stackoverflow.com/questions/19568411/list-of-
facebook...](http://stackoverflow.com/questions/19568411/list-of-facebook-cdn-
addresses)

Caching is a real business case for 'personalizing experiences'. I don't get a
lot of Australian news in my searches. Instead, I get my probable biases
confirmed. Twitter encourages me to follow my local handegg team. Facebook
trickles my more geographically distant friends and family into my feed.

The common denominator is part of the algorithm and its just not worth the
bandwidth to serve the long tail.

------
gojomo
Perhaps next Professor Crawford will want to outlaw freemium pricing for web
services. Or free web email. Or free over-the-air TV and radio. Or free urban
newsweeklies.

------
driverdan
Regulation is anti-competitive. We don't need regulation, we need competition.

~~~
freehunter
In the days before regulation, there was so much competition it wasn't even
funny! Oh wait, there was only one phone company: AT&T. Then they were broken
up and the industry became a little more heavily regulated and suddenly there
was finally some competition.

Regulation doesn't just appear out of nowhere. It happens because bad things
were happening before the regulations were put in place.

~~~
wmf
Based on some quick Wikipedia reading, it was a patent-based monopoly from
1876 to 1894, then "the telephone market opened to competition and 6,000 new
telephone carriers started while the Bell Telephone company took a significant
financial downturn" until 1907 when AT&T bought out most competitors. Then in
1913 AT&T became a government-regulated monopoly until 1984 when it was broken
up by the government.
[http://en.wikipedia.org/wiki/Bell_System](http://en.wikipedia.org/wiki/Bell_System)
So the relationship between regulation and competition isn't all that clear.

------
greggyb
A clear analog for this issue is television. I do not know, but was there ever
such contention over OTA programming vs cable networks?

I view these proposals as very competitive - among mobile carriers, where we
see much less competition (in the US at least) than we do among app
developers.

It always seems curious to me that those who advocate most strongly to keep
the government out of the content of the internet is also most vocal in
advocating to get the government into regulation of the means of access. The
two are not easily separable.

~~~
marcosdumay
You mean that the people most vocal against the government deciding what they
can read are also the most vocal against a corporation deciding what they can
read?

You are right, those two are not easily separable.

~~~
greggyb
Zero-rating is not the same as censorship. A corporation cannot prevent any
individual from taking an action that individual wants to. A government can,
if not make impossible, make very costly that same reading.

I would much rather have to pay extra for the internet, than trust any
government, to benevolently regulate access to the internet. If the government
regulates my access, then a corporation much larger than I can lobby quite
effectively for regulatory change that I would not like.

If a corporation restricts what I can access (and that is __not __what is
happening here - they are merely charging a different rate), then I have
multiple options to choose from. I can cheaply break a contract with a
corporation. I cannot cheaply break a contract with my government.

There is a qualitative difference to appreciate here. With corporations it is
"What I want costs $50 extra a month." With a government, it can be "What I
want sits behind the Great Firewall, and I may go to jail for consuming it."

I am not suggesting that the US government may turn into the Chinese. I am
suggesting that the US government does some pretty shady things, and that
regulatory capture is real, and worse for consumers, than firms competing by
trying to offer me free things.

~~~
Terr_
> Zero-rating is not the same as censorship.

And "firearms" are not the same as "murder"... but in both cases that tool
_can_ be used to accomplish that objective.

"Welcome to MonopolyNet, subscriber! Please enjoy complimentary uncapped
access to our millions of pre-approved* sites!"

"* Unapproved sites are available for a low low fee of $99/day, and may
include sites with objectionable material or controversial content."

~~~
greggyb
Please show your work on how you get from the facts of the matter, those
being: 1) There is more than one mobile provider 2) Multiple of these
providers are independently considering implementing zero-rating 3) Zero-
rating is providing a service for free (no matter how limited) 4) Companies
only give things away for free when they are seeking to maintain or increase
their customer base

To the conclusion that we see a monopoly in mobile providers.

