T-Mobile Tuesday's latest deal is not all it's cracked up to be.
It's been difficult to avoid the scourge of Pokémon Go content over the past week, as various media companies, including our own, attempt to capitalize on a game that in under a week has amassed a daily active user base larger than Twitter and Tinder, and has single-handedly turned around Nintendo's flagging fortunes.
The rise of Pokémon Go has been so swift, in fact, that many decisions made in its wake may have unforeseen consequences on every industry it touches, from mobile gaming, to augmented reality, to telecommunications. And while a direct impact on wireless policy may not immediately be something one would associate with a free-to-play augmented reality game for iOS and Android, that is exactly what may happen.
This week, T-Mobile, the third-largest wireless company in the U.S., announced that it would exempt a year of Pokemon Go data for all customers in its T-Mobile Tuesdays promotion. All they need to do is download its T-Mobile Tuesdays app, accept the terms and conditions, and every moment spent playing Pokemon does not count towards their data cap. But want to play Clash Royale? That'll cost you.
The rise of Pokémon Go has been so swift, in fact, that many decisions made in its wake may have unforeseen consequences on every industry it touches.
The term is known as "zero-rating," and it is the act of exempting certain types of bits and bytes from counting towards your data cap. It's a practice not new to T-Mobile, or to any of the major U.S. carriers; T-Mobile has been using it to great effect in its flawed BingeOn campaign, which allows users to consume to a number of music and video streaming services without them moving the needle on what is often a fairly low cap on wireless consumption. Advocates for the program say that it is about offering customers choice, and promoting competition in an industry that has failed to innovate. Opponents see the act of zero-rating as a stain on America's net neutrality rules, which came into effect in 2015 and require all service providers to treat all internet traffic without bias.
But zero-rating falls into that grey area where the traffic itself is not being treated differently, it is just being charged differently. To the consumer, all they see is benefit: all the Spotify or Netflix — and now Pokémon Go — fit to binge, with no real downside but for, in the case of video streaming, a slightly lower bitrate. And, T-Mobile emphasizes, it's easy to opt out of BingeOn — when the program started, the company was put on the defensive almost immediately — so it's not harming anyone.
The problem with zero-rating, though, isn't that it is bad for consumers. It's not. It's that, according to people like Ben Klass, who successfully led a campaign against Canadian carrier Bell's practice of exempting the billing of its own video content across its wireless network, zero-rating reinforces the status quo, promoting the success of the incumbents at the expense of people, companies, services and games without the vast resources of a Spotify, Netflix or Niantic.
The compromise between innovation and regulation is going to be an ongoing battle between net neutrality advocates and opponents.
Pokémon Go is the flavor of the week — and let's be honest, it will likely be the flavor of the month, and year — but there is an inherent problem with T-Mobile capitalizing on its success when, say, Clash of Clans (for which I have little love and no allegiance, and let's be honest is plenty big on its own) was passed over for the same opportunity. And then there are the fantastic games from independent game developers like Frogmind, whose multiplayer hit Badland likely has a tiny fraction of the real-time usage, but would benefit greatly from the T-Mobile's marketing machine.
At the moment, the Federal Communications Commission (FCC) has not committed to regulating zero-rating, since it technically falls within the current net neutrality rules. Earlier this year, Chairman Tom Wheeler and his team sent out letters to companies involved in the practice, including Comcast, Verizon, AT&T, and T-Mobile, asking them to provide particular details about their zero-rating strategies.
In the letters, the FCC noted that it "[wants] to ensure that we have all the facts to understand how this service relates to the Commission's goal of maintaining a free and open Internet while incentivizing innovation and investment from all sources." That compromise, between innovation and regulation, is going to be an ongoing battle between net neutrality advocates and the companies constant trying to skirt their profit-lowering side effects for years to come.
In the light of this decision by T-Mobile, we know a couple of things already: untying the yoke of a limited data plan is unlikely to boost Pokémon usage, at least in the short term, since everyone is already playing it all the time. (It also doesn't seem to use that much mobile data, for what it's worth.) And in the long term, as usage declines, other game developers will seek to use such tools as promotional catalysts for their own titles. Even if money doesn't change hands between T-Mobile and its zero-rating partners, you can believe that companies like Supercell and Epic War (which are behind Clash of Clans and Mobile Strike, respectively) will want a piece of the action. On the surface, everyone wins, since more people sign up for T-Mobile, download and play those popular games, and don't accrue data overages.
As a customer, I think that zero-rating is great, especially for someone who can't afford to spend $100 per month on multi-gigabyte data plans. But when it only gives preference to the apps, games and services already in use by millions of people across the country, it makes it hard for the little guys — the startups, the hustlers — to get noticed. And as a customer, that's bad.