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T-Mobile NL's new take on unlimited data: net neutrality violation or a way to differentiate?

Thursday 2 June 2016 | 16:53 CET | Background
T-Mobile Netherlands has presented a new plan called 'Oneindig Online', offering unlimited mobile data for a flat monthly fee. However, the operator will limit the quality of video for subscribers, a form of traffic management that could raise concerns about net neutrality. The regulator ACM will investigate the offer. While video quality of 480p is probably enough for small screens, there are still some questions unanswered: what is the quality like over Wi-Fi? Can a video provider withhold its content if it's worried about the inferior quality on T-Mobile's plan? How is embedded video handled? Above all, how will T-Mobile treat its own OTT service Knippr? If Knippr is offered for example with 1080p and unlimited (as Comcast does for its own service in the US), this could be considered unfair competition and a violation of net neutrality. 

Race to the bottom

The most important aspect of the new plan, 'unlimited data', we've seen before and still exists in some other countries, like the US. In general though, operators don't really like unlimited data and fear a 'race to the bottom'. T-Mobile NL is setting the threshold high with a monthly price of EUR 90, a level where the market is unlikely to suffer from the commoditisation of data. How will the competition respond? The other Dutch MNOs have integrated fixed-mobile bundles in order to differentiate their offerings, so may be less interested in such an offer. Furthermore, T-Mobile is the only player really acting as a 'challenger' on the market, notably much more so than the operator that could benefit from such a strategy - Tele2. So in other words, a 'race to the bottom' doesn't look very likely. 

Opt-in/out

Oneindig Online has two limitations: it can only be used for smartphones and tablets (use with a laptop or router is capped at 20 GB) and the video quality is reduced to 480p. T-Mobile US does the same with video under its much-commented 'Binge On' offer for zero-rated data. However, that is the only similarity with T-Mobile's plan in the Netherlands. Binge On is a feature, not a subscription plan, and it doesn't include 'unlimited data'. It's included only with more expensive plans, allowing customers to use mobile data for certain video providers without it counting toward their monthly bundle. All the video is delivered in 480p, so there is no discrimination among providers. Furthermore T-Mobile doesn't have its own video service, so there's no conflict of interest. This has put a damper on criticism. For T-Mobile US, Binge On is a way to differentiate itself in the market, and something that also should satisfy consumers and regulators.

Nevertheless, T-Mobile US still needs to be careful with the video quality, in order to avoid any suggestion of violating net neutrality. 

  • It must offer a simple opt-out for consumers. Those who want to watch video in higher quality must be allowed to do so. At T-Mobile US, customers then start paying for data out of their bundle.
  • Video providers also need an opt-out. Those that don't want to see their content degraded don't have to participate. In practice though, almost all providers have joined the offer and dozens are included.

Conflict of interest

The situation is different at T-Mobile Netherlands. The opt-out for the consumer is not subscribing to the 'Oneindig Online' plan. If they do subscribe, what happens with video over Wi-Fi? It's also unclear if video providers have an opt-out. And most important, what will happen when T-Mobile launches its own OTT video service, Knipper

The quality of video is not regulated. KPN uses this element to promote its FTTH services: HD TV is delivered on FTTH networks with better quality (12.75 Mbps) than on other types of infrastructure (7 Mbps). But these are forms of managed video. If the provider, in its role as ISP, changes the quality of third-party video (OTT), there is a potential net neutrality conflict. 

T-Mobile NL also faces a potential conflict of interest if it discriminates this way. Whether it's violating net neutrality or 'unfair' competition though, it's a way for T-Mobile NL to set itself apart in the mobile market. 



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