Previously I had argued that any violations of Net Neutrality could not exist in a setting where the marketplace was (1) transparent and (2) competitive. Under conditions of transparency and competitiveness, if ISP X were providing Internet connections which blocked certain websites, then ISP Y could offer Internet connections at the same speed and the same price but without the browsing restrictions (competitiveness), and if users knew about this (transparency), they would all switch to ISP Y. (The exception would be if a provider blocks high-bandwidth sites in a scarce-bandwidth setting, e.g. when an in-flight wifi blocks Netflix. In this case it's not true that another provider could step in and provide the same service at the same cost with no filtering, so it's not a case of abusing monopoly power.)
So, the argument goes, any prolonged violation of Net Neutrality could only take place either due to lack of transparency (e.g., the board members of a major backbone provider silently blocking their downstream customers from reaching websites whose content they disagreed with -- yes, this really happened), or, lack of competition (the Comcast monopoly throttling BitTorrent and just generally sucking). So, the argument goes, anything that can survive only by exploiting those market-unfriendly conditions is a Bad Thing, and should be prohibited, by rules that require Net Neutrality for all content. Q.E.D.
But T-Mobile's Binge On service would appear to prove me dead wrong. There's no lack of transparency -- they freely admit that they provide unmetered data access only from certain whitelisted video providers (at downgraded speeds so that the video only plays in 480p quality). And there's no lack of competitiveness, with the Big 4 mobile providers pulling out all the stops to steal each other's customers. So why are normal market forces not having the expected result here?
In other words: Assuming that it would cost T-Mobile the same to provide a low-bandwidth unlimited-data connection to the entire Internet, (as opposed to a low-bandwidth unlimited-data connection to just their whitelisted sites), and given that customers would obviously prefer this, why would they not do that?
T-Mobile's official response is that they want to make sure that a video provider's content is "supported" -- so that T-Mobile can detect when video is streaming, and then request for the content provider to downgrade the video quality to 480p so that it uses less bandwidth. (Users still have the option of switching to high-resolution video, but then it counts against their monthly data quota.) This sounds at first like it makes sense, but there's something missing here -- why not just provide the Binge-On connection as a rate-limited connection, and let the streaming website detect the lower speed, and downgrade to lower-quality video automatically? This is in fact what happens with Youtube and Google Play video, if you try to stream from a connection that is only fast enough to support the lower-quality stream. If the connection is rate-limited, it's not possible for the video provider to stuff too much data into the user's connection and cause them to incur overage charges.
So, why not let Binge On users stream from any site, at the low-quality stream rate? In the best-case scenario, the third-party site will detect the user's slow connection and downgrade to low-quality video, as Youtube and Google Play can already do. In the worst-case scenario, if the streaming provider can't downgrade the stream, then it just won't play (unless the user plays the higher-bandwidth version that eats into their data plan) but then the user is no worse off than they are under Binge On's current implementation anyway.
I did hear back from T-Mobile's PR team, but our emails back and forth tended to go in circles. Repeatedly, they told me: The reason we have a whitelist is because those are the providers where we know we can automatically request for them to downgrade to low-res video. And repeatedly, I would say back: I understand that, but why not just provide Binge On as just a simple data pipe at a fixed low speed, and then any video provider will automatically be able to use Binge On if they can detect the low-speed connection and downgrade their video automatically? You can let users switch between a fixed low-speed pipe which doesn't count against the data quota, or a high-bandwidth pipe which does -- but why not let the low-speed pipe access all sites equally?
So, this is a genuinely puzzling question to me. Assuming it would not cost them anything additional for the Binge-On pipe to offer low-speed access to all video sites, why hasn't T-Mobile done this, and why haven't market forces more or less compelled them to do it? Before one of the other Big 3 providers swoops in and offers a low-speed unlimited data plan that works with all websites which are able to downgrade to low-res video?
Perhaps the explanation is that even in the mobile data industry, what looks like cutthroat "competition" is not actually that competitive. T-Mobile is stuck with the reputation of having coverage not quite as good as the other Big 3, so they've carved out niches in other ways -- calling themselves "the Un-carrier" and selling phones at full price without locking users into a contract, or offering pricey but really actually unlimited data plans (something none of the other Big 3 are doing yet). In their new niche, "unlimited data for $60/month as long as you can live with low-res video", there is currently no competition, and hence no competitive penalty for not broadening the service to include all video streaming sites. Can you think of a better answer?
If that's the case, then competitive forces may work, albeit slowly, as the other Big Three eventually offer some form of "unlimited data for low-speed content," and some of them will offer low-speed unmetered access to the entire Internet, and then all of them will have to follow suit in order to remain competitive. In the meantime, Binge On customers can get their favorite shows on Hulu with no data overages, but cannot do the same thing on Google Play. This will annoy and even outrage some people, but it's also a reminder that "market forces" do not necessarily solve the problems that Net Neutrality legislation is intended to solve -- at least, not very quickly.