A T-Mobile USA executive yesterday urged the Federal Communications Commission not to take any action against the carrier's "Binge On" program, which throttles nearly all video content and exempts certain video services from data caps.

"I think the commission has to tread lightly—and certainly more lightly than it would in the wired world—in the wireless space when there is so much experimentation happening, so much differentiation happening, and a lot of it customers responding to," T-Mobile Senior VP of Government Affairs Kathleen Ham said at an event in Washington, DC. "We do have to be transparent about it, we do have to make sure that the customer has choices, but I think it's wise to tread lightly in this environment when there's so much going on that I think customers are benefiting from."

Yesterday's event on zero-rating and net neutrality was hosted by the New America Foundation's Open Technology Institute (see video here). The Hill also has a report on the panel discussion.

Ham said its customer surveys show that 93 percent like Binge On, and 92 percent are watching more video since T-Mobile instituted the program.

FCC takes a look

The FCC recently met with T-Mobile to discuss whether Binge On might violate net neutrality rules, but so far the organization hasn't made any move to stop or alter the program. The FCC says it hasn't opened an enforcement action or investigation, but it's talking to T-Mobile and other carriers "as part of a larger policy examination."

Binge On reduces nearly all video streams and downloads to about 1.5Mbps, forcing online video providers to lower quality to about 480p. Additionally, T-Mobile exempts about 40 video services from high-speed data caps, also known as "zero-rating." Video providers don't have to pay for data cap exemptions, but they do have to meet some technical criteria.

Binge On is enabled by default, but customers can turn it off or back on.

Besides letting customers use more data and watch more video, Ham said that reducing bandwidth usage of video has made the carrier's network perform faster overall, "so everybody is benefiting."

"Some people want to call that throttling, we call it optimizing for a handset of this size," she said, holding out her hand.

The wireless market should be treated differently from the wired broadband market because it's more competitive, Ham argued.

"We don't have contracts anymore in the wireless market," she said. "You don't have as much choice in the wired market, customers are to some degree trapped. I think in the wireless space that's certainly not the case. The point of Binge On is to do something our customers want. If they don't want it then we're not going to offer it, we'll move on to the next thing."

Net neutrality rules were implemented in the US primarily to prevent "the blocking of traffic for anti-competitive reasons," she said. Binge On doesn't raise those concerns, because T-Mobile isn't associated with the third-party providers that are having their data zero-rated, she said.

T-Mobile has resisted calls to make the service opt-in rather than opt-out, saying that it's better to switch on anything that benefits customers by default.

"The thing that's really significant is that customers can turn it off," Ham said.

Legal experts we interviewed for a previous story said that T-Mobile has a solid argument that Binge On doesn't violate the FCC's no-throttling rule because customers can turn it off. T-Mobile could also argue that Binge On qualifies as "reasonable network management" because it could prevent video from clogging up the wireless network.

There's no specific rule against data cap exemptions, with the FCC deciding on a case-by-case basis whether a particular practice harms consumers or online content providers.

YouTube excluded from Binge On's data cap exemptions

T-Mobile has critics, including Barbara van Schewick, a law professor who directs Stanford’s Center for Internet and Society. She recently wrote a lengthy report arguing that Binge On violates key net neutrality principles. (A summary is here.)

T-Mobile is "picking winners and losers" by making some kinds of content more attractive to users than others and by favoring services that are in the Binge On program, van Schewick argued.

"Customers on T-Mobile’s lowest qualifying plan can watch 'unlimited' video from Netflix and other Binge On providers, but not more than 4½ hours of video per month, or 9 minutes a day, from providers not in the program," van Schewick wrote.

Though T-Mobile argues that Binge On is open to any provider, van Schewick writes that there are "substantial technical requirements" to qualify.

The technical requirements published on T-Mobile's website "categorically exclude providers that use the User Datagram Protocol (UDP), making it impossible for innovative providers such as YouTube to join," van Schewick wrote. "They discriminate against providers that use encryption, a practice that is becoming the industry standard. While some providers can join easily, a significant number will need to work with T-Mobile to determine whether their service can be part of Binge On. Many will have to invest time and resources to adapt their service to T-Mobile’s systems. The smaller the provider, the longer it will likely take for T-Mobile to get to it."

YouTube developed a protocol called QUIC that relies on UDP and improves online video performance, van Schewick noted. But this disqualifies YouTube from Binge On.

"Anybody developing video streaming applications now has a choice: Use UDP, which might be the best technical option for their application, or forgo the benefits of UDP just to qualify for Binge On," she wrote.

T-Mobile says that UDP prevents it from reliably detecting video streams.

Comcast, AT&T, and Verizon also zero-rating

While the T-Mobile case remains unsettled, so do the FCC's examinations of zero-rating programs implemented by Comcast and AT&T.

Comcast zero-rates its own Stream TV service, which provides online video to Internet-only customers, but the company says it's beyond the reach of net neutrality rules because Stream TV is an IP cable service instead of one delivered over the public Internet.

AT&T's Sponsored Data program charges third parties, such as advertisers, for the right to deliver data without counting against consumers' mobile data caps.

Shortly after the FCC started looking into the carriers' zero-rating practices, Verizon Wireless announced that it too would begin selling data cap exemptions to content providers.