by Bill Snyder

T-Mobile offers its customers an ‘unbargain’

Nov 12, 2015
CarriersConsumer ElectronicsMobile

T-Mobile quietly raises the price of unlimited data by nearly 20 percent.

The uncarrier has an unbargain for consumers. T-Mobile made a splash this week with its Binge On feature that lets customers stream video from a selection of providers without eating into their data caps. It also doubled data allowances for a number of tiers without raising prices.

But buried beneath the bravado of CEO John Legere at his online press conference was a price hike: New T-Mobile customers will pay an extra $15 a month for unlimited data. Starting on Sunday, Nov. 15, the new “Simple Choice Amped” unlimited plan will run $95 for a single device, up $15 from the current rate, an increase of just under 20 percent.

That price hike is rather ironic, because at the online event announcing Binge On CEO John Legere unleased a rather profane rant about overage charges imposed on customers by other carriers. The change in the unlimited plan was buried under a mass of other details, but when a few reporters eventually asked about it, Legere responded with a series of tweets justifying the new prices. He wrote: “While @sprint and @verizon jack up Unlimited rates with no extras, we add more – 2x tethering, Binge On, free Vudu rentals.”

That is true – but not necessarily a great deal. Most people don’t tether, that is use their smartphone as an access point for a PC. Binge On is certainly a welcome feature, but T-Mobile customers who are on a 6 GB or 10 GB plan can get it anyway. As to Vudu, the free movie option is only good for one movie a month, so it’s not much of a benefit.

Despite its relatively low resolution – 480p compared to the higher resolution 1080p – Binge On is likely to be popular and is a feature that no other carrier has yet matched. More and more consumers watch videos on their smartphones, and being able to binge watch without worrying about overage fees is pretty cool.

There is, though, some concern that Binge On will fall afoul of the FCC’s Net Neutrality regulations. In essence, those rules say that carriers and broadband providers have to treat all content the same; favoring the transmission of one type of content, or the transmissions of one content provider over another, is not permitted. (Here’s a good explanation of how Binge On works.)

Although there is some disagreement on this point, I suspect that T-Mobile is on solid ground. Because the carrier isn’t charging any of the content providers for the privilege of reaching consumers for free, and says that any provider that meets its technical requirements is welcome to participate, T-Mobile appears to be in compliance, says Helen Mickiewicz, assistant general counsel of the California Public Utilities Commission, who has followed the Net Neutrality issue for years.

Barbara van Schewick, a law professor at Stanford University, disagrees, telling the New York Times that: “Net neutrality doesn’t allow Internet service providers to pick winners and losers, and if we look at T-Mobile’s plan as it is now, it will clearly distort the market for video streaming.”

It will take some time for this to shake out. For now, go ahead and binge.