T-Mobile US CEO Explains New Video Streaming Service

T-Mobile US CEO Explains New Video Streaming Service

In an open letter to consumers about T-Mobile US’ new Binge On service, chairman and CEO John Legere writes that he is following up on users’ reaction to the service “to help clarify a few things before we can move on.” Legere says, “We invented Binge On to provide customers with an easy and effective way to stretch their data bucket. Knowing that the number one (and climbing) use of data out there is video, it was obviously the natural place to focus.” He describes Binge On as “a FREE benefit given to all T-Mobile customers. It is and always has been a feature that helps you stretch your data bucket by optimizing ALL of your video for your mobile devices.”

With Binge On, T-Mobile has partnered with providers of streaming video content. When the operator’s network detects those sources—38 are participating so far, including Netflix and Hulu—it zero-rates the data for its customers and reduces the resolution (to as low as 480p, depending on the amount of data in the customer’s plan), which the operator characterizes as optimizing the signal for handheld devices. Legere writes, “This “stretching” of your data bucket is estimated to allow you to watch UP TO 3X MORE VIDEO from your data plan than before.”

Tarifica’s Take

Ever since Binge On was launched in November, T-Mobile has faced negative reactions, mainly in response to the fact that the operator did not initially disclose that the streams and downloads were being slowed down. While consumers were baffled, consumer advocates were sharply critical; the privacy-rights group Electronic Frontier Foundation called T-Mobile’s policy “throttling,” which provoked CEO Legere to a profanity-laced video tirade posted on Twitter. The open letter shows Legere in a more reflective mood, but it appears that it is less of a clarification than simply an acknowledgement of a situation that should have been acknowledged earlier.

Until the EFF published a report based on its own tests, the T-Mobile customers had been unaware of the reduction in signal quality. While it may be true that the reduction will not be perceptible on hand-held devices, as T-Mobile claims, consumers should have had the opportunity to consider the matter while in possession of the facts. As we have stated on many occasions before, transparency is key to good customer relations in the mobile industry, and T-Mobile has come across seeming less than fully transparent. Furthermore, while the streaming feature is optional, T-Mobile made “on” the default setting, rather than “off.” This runs the risk of causing customers to feel manipulated. Finally, there is the issue of net neutrality, which Legere says T-Mobile is committed to. Nonetheless, Binge On does at least give the appearance of favoring some providers over others.