T-Mobile demonstrates the benefits of enabling third-party offerings rather than blocking them

Verizon last week launched a promotion in support of Android Pay, offering subscribers free additional data when they use Google's payment service at the point of purchase. The move follows last month's news that Verizon is the only major carrier that doesn't allow Samsung to preload its own mobile payments offering on Verizon's phones.

Verizon was once behind Softcard, a carrier-backed mobile payments system that never gained any real traction and was swallowed up by Google in early 2015. Google launched Android Pay a few months later.

And while Verizon no longer appears to have a major stake in the space, it clearly has an interest in the success of Android Pay over rival systems, perhaps through a revenue-sharing deal with Google. Verizon representatives declined to discuss the carrier's strategy with Android Pay.

Like its fellow carriers, Verizon has something of a history of favoring certain apps, services and technologies over others, or even overtly blocking offerings at will. A 10-month-long FCC investigation a few years ago found that the operator had pressured Google to remove 11 apps from its app stores that enabled subscribers to use their smartphones as mobile Wi-Fi hotspots for other devices. (The case ended in a $1.25 million settlement and Verizon's agreement to permit such usage at no extra charge.)

Verizon also blocked Google Wallet when it was supporting Softcard, claiming to do so on dubious technical grounds. And the carrier was sued more than ten years ago after it disabled some Bluetooth capabilities on one Motorola model, claiming certain features conflicted with contractual agreements it had with content providers.

In fact, all the major U.S. carriers have blocked tethering apps in the past to some degree, essentially forcing users to pay extra to consume data via Wi-Fi on devices other than their phones. AT&T's terms of service today specifically forbid tethering unless users are on special plans.

AT&T also has blocked the use of video chat apps such as Apple's FaceTime and Google's Hangouts on its cellular network, before beginning to support them in 2013. The carrier had allowed subscribers to use video chat through Wi-Fi, however, indicating the policy was in place to ease congestion on its network.

Whether such blocking and favoring strategies have been successful is difficult to say. Increased data traffic from iPhone users was blamed for some of AT&T's network problems several years ago, and those woes might have been exacerbated had the carrier allowed video chat apps to further congest its network. Verizon gained nothing by blocking Google Wallet a few years ago -- Softcard went nowhere, obviously -- but the strategy surely didn't cost it many customers.

But T-Mobile stands as something of a contrast to those strategies, as its momentum over the last two years appears to stem in part from its willingness to support non-cellular technologies and third-party offerings rather than block them. Carriers generate no additional money from Wi-Fi calls, of course, but T-Mobile saw impressive uptake of its Wi-Fi calling feature it launched in 2007.

And T-Mobile doesn't directly monetize Binge On, which provides zero-rated video to subscribers, but the service has proven tremendously popular with subscribers and likely won the carrier more than a few customers. (Though T-Mobile does benefit from reduced video traffic on its network.) Binge On has become so compelling, in fact, that YouTube joined the program after initially complaining that T-Mobile was degrading the quality of all video for its users. Binge On might run afoul of net neutrality rules -- although it may not -- but it clearly is paying dividends for the carrier.

It's too early to predict whether Verizon will reap rewards through its Android Pay promotion that gives customers who use it up to 2 GB of data. And asking subscribers to download Samsung Pay rather than having it embedded isn't much of a burden. But as T-Mobile has demonstrated, there are upsides for carriers that help users do what they want on their phones. --Colin | @colin_gibbs

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