Lowenstein’s View: T-Mobile One – A new reality, not net neutrality

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Mark Lowenstein Industry Voices

Last week, as part of ‘Uncarrier 12’, T-Mobile introduced the T-Mobile One plan. The main feature of the plan is ‘unlimited’ voice, text and data, with a slight per-line increase in price compared to today’s Simple Choice Plans. There are three caveats: video is limited to 480p, with a $25 upcharge for HD; video might be slowed after 26 GB in monthly consumption; and tethering is only at (practically unusable) 2G speeds, with a fee of $15 per month for LTE tethering.

This is T-Mobile’s main plan going forward. Simple Choice plans, and features such as Music Freedom and BingeOn are being phased out, in favor of the new unlimited plan.

The Electronic Frontier Foundation and several other organizations reacted quickly, accusing TMO of violating the rules of Net Neutrality. This is a continuation of an argument they have been making since TMO introduced Binge On, which also limits video to 480p. In their view, this is an even more egregious violation, since with Binge On, there was an option for users to turn it off, in which case video use would count no longer be zero rated.

I think this network neutrality argument is hogwash. Let’s be clear: the words cellular+ HD video+ unlimited do not mix. This isn't bait and switch. It’s a recognition that no matter how much capex, spectrum, and small cells an operator throws at the problem, wireless networks have trouble supporting bandwidth-intensive content in large quantities. The tethering limitation is another recognition that you can’t just use your phone as a hot spot all day long as if you were at home or the office. The network just can't handle it. And won’t be able to, until perhaps 5G and/or dense deployment of small cells.

The basic net neut proviso is that internet service providers cannot treat data differently based on type. However, there is a loophole, where the FCC rules can make allowances for reasonable network management. It’s instructive that in the year since Binge On was introduced, the FCC has not said it has any problems with the plan.

I have two main arguments against those who are citing this as an infringement of network neutrality rules. First, limiting video to 480p, and limiting tethering speeds in an ‘unlimited’ plan, are reasonable network management practices, in my view. Wireless networks don’t have the ability to handle unlimited HD video and tethering. The experience of other users is much more quickly, and directly affected if there are just a handful of other subscribers within some proximity treating the wireless network like a fixed broadband network.

And how about the argument that with all the fine print, these ‘unlimited’ plans are not truly ‘unlimited,’ in the fixed broadband sense of the word. Wireless unlimited plans have always had an asterisk – and when they don't, we get the AT&T iPhone debacle, circa 2010. So perhaps we should just all get comfortable with the concept of a ‘wireless version’ of unlimited plans.

Second, maybe this is not much more than semantics. The One Plan is unlimited, with video limited to 480p. Perhaps they just should have positioned it as $70 for Unlimited with video at 480p, and $95 for Unlimited with HD Video. How is that any different than Comcast charging $30 for 25 MB ‘Performance’ broadband, and $83 for ‘Blast’ 150 MB? A family that wants to use Ultra HD on Netflix probably has to pay for a premium broadband plan, in the same way that a TMO subscriber must pay extra for HD streaming? Would the net neut folks argue that streaming in Ultra HD be included in unlimited wireless plans, too? (not that UHD looks much better on a small screen device).

And by the way, differentiated speed and QOS pricing is coming to a broadband theater near you. With Ultra HD, virtual/augmented reality, and other applications requiring faster speeds and/or lower latency, there will need to be more plan and pricing options and tiers, both wired and wireless.

Despite my overall defense of TMO’s approach here, I think they do need to consider more options and flexibility. $25 is a pretty steep surcharge for HD, particularly if multiple lines in a household opt for it. It would be nice if there were “day pass” or ‘per program’ options, particularly for long-form content, for example, “stream this episode in HD for $1,” or “this program in HD is brought to you by XYZ sponsor.”

The throttling to 2G for tethering is a more significant change being put in place for T-Mobile One, and will certainly cause some users to stick with their current plan. TMO does have an option to purchase 5 GB of LTE tethering for $15. I urge TMO to make this easy to find and purchase, on a one-of basis, and perhaps even share in a family plan, rather than ‘per line.’

Mark Lowenstein, a leading industry analyst, consultant, and commentator, is Managing Director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein or email him.