T-Mobile US' (NYSE:TMUS) latest "Un-carrier" initiative includes unlimited access to several music streaming services, including Pandora, Slacker, iHeart Radio and Spotify, Samsung's Milk and the forthcoming streaming service Beatport, without imposing data charges on users' 4G plans. In other words, customers using T-Mobile's Music Freedom who go over their monthly data allowance won't have their music service throttled.
T-Mobile offers unlimited data and doesn't charge customers when they go over their data allowance--but T-Mobile does throttle users' data speeds after they reach their data limit. However, with Music Freedom, those rules will not apply. According to T-Mobile CEO John Legere, streaming music will be "free and unlimited."
While it sounds appealing, T-Mobile does appear to be giving preferential treatment to the six streaming music services that are part of Music Freedom because their services will not get throttled when they run over T-Mobile's data pipes. Other music services, and any other data service, will get throttled once a customer reaches their data allowance.
That type of preferential treatment is exactly the thing that net neutrality advocates are concerned about. But T-Mobile executives, when questioned about net neutrality, downplayed the issue. CEO Legere dismissed the notion when questioned by saying net neutrality isn't an issue because the service is free.
T-Mobile may not be asking its streaming music partners for money to get their services delivered to consumers without the threat of a data cap, but it is giving its partners preferential treatment over music services that are not its partners. In fairness though, the company does say it is planning to add more music services to its roster, and is even asking customers to vote on the services they want included.
T-Mobile is clearly stepping into murky waters with this offering. And while Music Freedom is not the same concept as AT&T Mobility's (NYSE:T) Sponsored Data, which lets content providers pick up the tab for subscribers' data usage so that it doesn't count toward their data bucket, it's likely to generate the same sort of close examination.
T-Mobile prides itself on being a disruptor to old-school telecom company practices and ploys. And the company should be commended for its efforts because without Legere and his executive team at T-Mobile I doubt we would be experiencing the revolution in handset subsidies and device pricing that we are seeing today.
But can T-Mobile achieve that same level of disruption with high-bandwidth data services like music and video? I'm not so sure. --Sue