Cellphone and broadband providers are excluding some video from data caps, meaning consumers have more data available for other apps and services.
But that’s not necessarily good, according to advocates of net neutrality, the concept that Internet access providers shouldn’t discriminate against some Web traffic in favor of others. They say innovation could be curtailed if smaller video providers couldn’t afford to pay for an exemption.
The exemptions come as mobile video booms. But video eats up a lot of data. On a smartphone, an hour or two of video consumes about 1 gigabyte. AT&T and Verizon, the biggest wireless companies, have been phasing out unlimited plans, so customers pay more to watch more over cellular networks.
Even home Internet providers are testing data caps. About 13 percent of Comcast’s customers are in a market with caps, according to research firm MoffettNathanson. Comcast exempts its own video, but not video from rivals like Netflix. Critics say that could hurt competition, as consumers would be drawn to the service that’s exempt.
The Federal Communications Commission has adopted rules to protect net neutrality, but these exemptions aren’t banned under the rules. The FCC says consumers could benefit in some cases and will address complaints as they come up.
Here’s a look at what major U.S. companies are doing:
The No. 3 wireless carrier exempts major streaming music and, as of November, many popular video services from data caps on most of its plans. The company says the video providers don’t have to pay for that, but do have to meet certain technical requirements. YouTube and Facebook video aren’t covered; T-Mobile says it couldn’t tell when those services are delivering video.
This fall, the cable TV giant started offering a streaming alternative, with channels delivered to customers’ homes without the need for a cable box. That video—and any streaming that regular cable customers do on the company’s Xfinity TV app in their homes—aren’t counted toward data caps. That’s because they’re cable services on a “managed network,” which Comcast considers separate from the public Internet, says spokeswoman Lisa Scalzo.
But in a complication for customers, she says logging into a channel’s app, like HBO or ESPN, or video using another Comcast app, Xfinity TV Go, would count toward caps because data go over the public Internet.
The company used to have an Xbox app that let customers watch Comcast-supplied TV without counting toward data caps, but Comcast says the app was scrapped in late August.
Since early 2014, the No. 2 wireless carrier has exempted some Internet services from data caps on its main wireless plans. Instead, AT&T says it has pilot agreements with a handful of businesses under its “Sponsored Data” program. On its website, AT&T lists six companies as participating, including Aquto and Syntonic, which specialize in sponsored content.
The company would not say who pays for the data that are exempted from consumers’ plans under these programs.
As for AT&T’s cable business, AT&T agreed not to exempt streaming of its own U-verse or DirecTV online video from its home Internet data caps in order to win FCC approval of its July purchase of DirecTV.
The country’s biggest wireless company has said that its mobile video service, go90, launched in October, will include sponsored content. That means Verizon customers watching that video will be exempt from data caps. Verizon will make money instead through ads. Not all go90 video will be sponsored content, though; some does count toward a data cap.
Spokeswoman Marie McGehee confirmed a Re/code report that said Verizon will soon test a sponsored-data program similar to AT&T. It would roll out more broadly next year. She declined to comment further Friday.
The company is currently running a promotion in which Verizon customers get an extra 2 gigabytes of data for three months for downloading the go90 app and registering. But you don’t have to watch any video to get the deal.
Filed Under: M2M (machine to machine)