Mike Snider

USA TODAY

Netflix says that it has been sending lower quality video to mobile subscribers on AT&T and Verizon networks to help customers avoid racking up steep data charges.

Increased consumption of video on mobile devices has led many Netflix members to worry about surpassing data caps, the streaming video provider said. So more than five years ago, the video service began sending lower resolution feeds to members on mobile networks with data caps.

"We believe restrictive data caps are bad for consumers and the Internet in general, creating a dilemma for those who increasingly rely on their mobile devices for entertainment, work and more," said Anne Marie Squeo, a member of the Netflix corporate communications team, on the Netflix blog. "It’s about striking a balance that ensures a good streaming experience while avoiding unplanned fines from mobile providers."

Netflix is developing a “data saver" feature, due in May, that will let subscribers set the video quality inside their mobile app. The feature will let subscriber members "stream more video under a smaller data plan, or increase their video quality if they have a higher data plan," she said.

The video resolution issue came to a head last week when T-Mobile CEO John Legere posted a video on Twitter saying that AT&T and Verizon customers get lower quality video from Netflix than T-Mobile users do.

Netflix has also been reducing resolution of its videos streamed on T-Mobile's networks: It was one of the original participants in T-Mobile's Binge On program, which lets its subscribers watch video services at a lower quality (480p) without counting against their monthly data allotment.

The difference, according to Legere, is that Netflix on AT&T and Verizon is lower quality than Netflix on T-Mobile's Binge On, at 360p. Netflix said it caps its bitrate for mobile viewing at 600 kilobits per second. It wouldn't comment beyond its blog post.

Netflix was criticized for keeping its actions under wraps for so long. "We're outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent," said Jim Cicconi, AT&T Senior Executive Vice President of External & Legislative Affairs, in a statement. Like Verizon, it says it does not throttle video.

Netflix's throttling of content is ironic, said Randolph May, president of free-market think tank, the Free State Foundation. "Netflix’s complete lack of transparency about the practice, especially in light of its strident advocacy against treating Internet communications differentially ... is pretty stunning," he said.

Electronic Frontier Foundation is "disappointed ... that Netflix didn't explain this earlier, since we believe that all companies should be clear and transparent with their customers about what to expect when it comes to the services they subscribe to," said Jeremy Gillula, staff technologist at the at privacy-rights organization.

BUSTED DATA CAPS

Throttling, or lowering the video resolution sent to a mobile device, has been a hot button issue for more than two years. Where you stand on the practice, including whether you call it "throttling," which carries negative connotations, depends on where you are in the video delivery chain.

As more consumers stream more video on smartphones and mobile devices — at least 132.3 million do monthly, up 16% from a year ago, according to Nielsen — they can easily surpass their monthly data allotments. Watching a single two-hour HD movie can eat up 6 Gigabytes of data, the equivalent of an entire monthly data limit for some, but watching at lower resolutions can reduce data by as much as three times.

For many consumers, T-Mobile's Legere has said, the lower-resolution video quality of 480P was adequate for most viewing. To that point, he says that since Binge On's adoption in Nov. 2015, customers have watched twice as many hours of video per day.

Netflix customer testing has reached similar findings that subscribers "don’t need the same resolution on their mobile phone as on a large screen TV to enjoy shows and movies," Squeo said.

Last week, YouTube and Google Play Movies & TV joined T-Mobile's Binge On program. But reflecting the contentious nature of the issue, YouTube had originally accused T-Mobile of throttling, saying T-Mobile's downgrading of its video, without permission, was unjustified.

YouTube lashes out on T-Mobile's throttling video streams

Public fights between the big cell-phone carriers and streaming content providers have become a regular occurrence, as each tries to become the default provider for consumers. The battle often tips over into the regulatory sphere.

EFF and the Internet Association have expressed concerns that T-Mobile's Binge On program could skirt net neutrality rules, which prohibit Internet service providers from blocking or slowing transmission speeds of content. The Federal Communications Commission has met with T-Mobile, as well as AT&T, Comcast and Verizon, about each company's own data exemptions, but no action has been taken.

T-Mobile's revised Binge On plan includes YouTube

Netflix has its own history with data speeds. After complaining that some Internet service providers were not delivering its video speedily enough to ensure good quality for consumers watching at home, Netflix made deals with to connect directly with major ISPs to assuage the problem. Netflix accounts for about 37% of downstream Web traffic, according to networking company Sandvine.

Netflix CEO Reed Hastings was a vocal supporter of the FCC's net neutrality proposal and its anti-blocking and anti-slowing provisions during the year that the FCC was devising its Open Internet proposal, passed in February 2015. Those regulations are being challenged in court by USTelecom, a trade group that includes AT&T, Verizon and other telecom companies.

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