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Exempting popular apps from data charges is anti-competitive

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Re: Exempting popular apps from data charges is anti-competitive

#61

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…

> 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).

Re: Exempting popular apps from data charges is anti-competitive

#62

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…

I see what you mean: Public transportation can be welfare-enhancing when there is enough regularity of travel between certain (networks of) points that throughput is increased when e.g. a lane is converted from road to light rail. The benefits of higher throughput would exceed the opportunity cost of the space being usable for fewer routes.

(tl;dr: it pays to bus people if they're all going between the same points.)

In that sense, if some major sites can exploit the regularity of the traffic they get to the point that they produce less load on the network per bit transmitted, that it's (not un)reasonable that the user be billed less for that site, though "free" is still questionable.

We should be careful to distinguish "bribing ISP for preferential access" vs "accounting for the reality of the cheaper carriage of one site's data".

(tl;dr: cheaper data rates can reflect corruption or legitimately lower access cost, and our reaction should reflect that.)

Re: Exempting popular apps from data charges is anti-competitive

#63

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…

France has banned free shipping of books as anti-competitive.

Re: Exempting popular apps from data charges is anti-competitive

#64

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…

I am not sure what you mean by "That doesn't mean it's wrong, but simply that it's a priori."

The speculation that zero rating will lead to these problems is pretty much the exact OPPOSITE of an a priori fact... can you explain what you mean?

Also, the French consider free shipping anti-competitive: http://www.slate.com/blogs/moneybox/2014/07/11/france_banned...

Re: Exempting popular apps from data charges is anti-competitive

#66

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.

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.

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...

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.

Re: Exempting popular apps from data charges is anti-competitive

#67

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…

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?

Re: Exempting popular apps from data charges is anti-competitive

#68

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

If all apps had equal access to zero rating, then that'd be one thing. If I can just go to some site and pay for traffic to my site, cool. But is that reality?

On top of that, I would be surprised if some carriers are not just doing it as a marketing service. In Guatemala, I see huge billboards saying you don't need to pay anything to use Facebook, Whatsapp and some others. If you have an active line (meaning you've spent a dollar in a month or two or something low), you're set to use them.

Even promotion like that is somewhat anticompetitive if there's no way for other parties to let users know.

Re: Exempting popular apps from data charges is anti-competitive

#69
post #8

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

Music Freedom is a little different, at least in theory. Theory is always cleaner than reality so let's start there.

In theory, Music Freedom is a way to have all streaming music traffic not count toward your data cap. If that's the case, T-Mobile is discriminating based on the type of traffic, but not the origin of the traffic. Generally speaking, network management and traffic shaping aren't being fought against by net neutrality campaigners. It makes sense that VoIP traffic receive higher priority than FTP because if my FTP transfer takes another 10 seconds out of 5 minutes I'll hardly notice, but if my voice traffic stutters, I will certainly notice.

In many ways, Music Freedom is an extension of this to bandwidth caps. Streaming music is low, consistent bandwidth usage, but not real-time. By contrast, loading things on the web is high bandwidth usage, but quite spiky. As a carrier and as a user, it would make sense to reschedule music packets around web packets. If the next 15 seconds of the song are already in your local buffer, you'd much rather it wait until you're idle in your browsing session than slow down your browsing - so long as the next second of music is delivered less than 15 seconds from now.

If T-Mobile were simply managing its network this way, I don't think anyone would have a problem with it. Music lovers wouldn't notice that things were being scheduled for more idle times in the network and web users would see faster speeds. That's simply an equal or better outcome for everyone.

Traffic shaping is a good thing. My university has a wonderfully progressive IT department and didn't want to block anything. However, out of 5,000 users, the top 50 users use half the bandwidth. Again, the university doesn't mind that. Most of the time it doesn't matter. However, they didn't want students trying to do research to have their relatively low-bandwidth web traffic stifled by students file sharing and so web traffic was given greater priority than file sharing. The university didn't want to block file sharing, but I think a lot of people would recognize that large file transfers are not as time-sensitive as interactive processes.

Some people suggest that all data be treated the same. I don't think that's the answer. Some traffic needs more real-time guarantees than others. That's very different from discriminating based on the source/destination of the traffic.

But T-Mobile is applying this to data caps (or throttling points). I'm going to argue that (on an intelligently designed system) using 1GB of streaming music is less network usage than downloading a 1GB file. What do I mean by less network usage? I mean that the streaming music usage impacts other users on the same connection less. For a simple example, let's say that you're browsing the web and I'm streaming 256kbps music over a 512kbps connection. Are we both using half of the connection? No. When browsing the web, you have peaks and valleys in your data transmission. To make things simple, let's say that every time you click a link you download 64KB or 512kbits. If I'm using half the connection, it takes 2 seconds for you to download. But that's not very efficient. I already have the next few seconds of the song in my buffer so it makes more sense for me to drop down to 0kbps for a second, you to complete your download in 1 second, and then for me to download 2 seconds of song in the second after your download completes. I have not seen any degradation of my service - I'm oblivious to it happening. Downloading the song faster doesn't help me, but you downloading your web page faster does help you.

So, by being able to reschedule streaming music around other traffic, it actually uses less of the network capacity during the periods when there is contention. In total, it uses the same amount in terms of MB or GB transferred. However, you don't care how much of the connection I'm using when you're not using it. You only care how much I'm using while you want your downloads to go faster. If I were only using traffic during the valleys of your transmissions, it would be like I was never using the connection from your perspective. So, me streaming music affects you less because we know that we can reschedule things within certain bounds.

There's a bit of a disconnect between pricing and usage. If you're using the network at 3am, your data usage probably isn't significant. Netflix refills its content caching boxes during times where network traffic is more idle because it isn't just about bytes transferred, but whether other people are trying to use the link's capacity at the same time you are. However, coming up with a pricing model that accurately models one's usage of a link's capacity as a function of contesting for that capacity from other users would be hard to come up with. Again, if I'm sharing a link with 100 other people and agree only to use the link when no one else wants to (ie, they aren't sending/receiving packets), then I'm never contesting anyone else for link capacity. By the way, I'm not saying that's a practical standpoint, just an illustrative thing.

If 1GB of streaming music is actually using up less of the network, why should it be charged the same? GBs of transfer is really just a proxy for what is actually cared about. In many cases, it's reasonable. We can't tell if you care whether that web page loads as fast as possible or whether that FTP transfer takes an additional minute or not. But we can say (with reasonably high confidence) that you don't care if the 30th second of a song arrives within 5 seconds of the transfer starting or 20 seconds of the transfer starting. As such, it's possible that we can reschedule streaming music in such a way that it's basically not using the network - at least not at times when other users care. Network capacity used when there's excess capacity other users don't want isn't really network capacity that's being used. It's simply filling what would be dead space.

If bandwidth caps/charges are supposed to make sure that high users pay for the capacity increases they necessitate or make sure that they don't crowd out smaller users, then shouldn't usage that might be high in GBs transferred, but is actually not requiring capacity increases or harming other users get a bit of an exemption?

Now, in practice, T-Mobile doesn't support all providers and that is concerning. It would be nice if they posted an explanation of their criteria rather than just saying "email us if you're on the inside". Likewise, it being free rather than a discounted rate based on how much it impacts can be concerning. Others can talk about the practice and the issues there because this comment is already too long.

tl;dr: GBs transferred is not exactly equal to network usage. Streaming music can actually use less of a network link's capacity than GBs transferred would make it seem because it can be rescheduled for times when the network is seeing less traffic and, therefore, not impacting users.

Re: Exempting popular apps from data charges is anti-competitive

#70
post #8

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

The difference is that (in theory at least) there's no discrimination for or against specific music streaming services. This is unlike the zero-rating described in the article, where specific social networks (and one specific encyclopedia) are unfairly prioritized over others.

If AT&T were to, say, exempt all social networking sites or all encyclopedic wikis or something to that effect, then I wouldn't be nearly as opposed to it.

Granted, as a happy T-Mobile customer who has put the free music streaming to good use, I'm probably biased in favor of that variety of selective discounting. However, I'd be opposed to it if, say, only Pandora was allowed or only Amazon Prime Music was allowed or somesuch.

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