Friday, March 25, 2016

Netflix admits to throttling streaming movies to AT&T and Verizon customers (UPDATED)

Last week, you may have spotted that AT&T and Verizon were under fire for allegedly throttling the quality of videos streamed from Netflix, but they vehemently denied the claims. Shockingly enough, it turns out that the carriers are in the clear this time. Netflix has admitted that it is behind the reduced video quality and has been enforcing limits for a number of years.

Speaking to the Wall Street Journal, Netflix confessed that the company has been throttling video streams for AT&T and Verizon customers for more than five years. Netflix limits these mobile streams to 600 kbps, which is considerably slower than the speeds achievable over most mobile connections.

The reason is apparently to “protect customers from exceeding mobile data caps.” That sounds rather reasonable of Netflix, but remember that the company is also concerned that customers will stop using its service if it uses up all of their data allowance. Strangely enough Netflix has been at the forefront of supporting of net neutrality rules, but also admits that it has not been limiting the streaming quality for customers with US carriers Sprint and T-Mobile. Apparently, this is because “historically those two companies have had more consumer-friendly policies,” were consumers aren’t charged for exceeding their data limits.

“We’re outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent,” – Jim Cicconi, AT&T senior executive vice president

This isn’t the first and probably won’t be the last throttling saga to hit mobile businesses this year. T-Mobile already found itself facing complaints from content providers about its controversial “Binge-On” plan, which throttles all video data if consumers don’t turn the switch off. Sprint was also forced to abandon its broad throttling practices last year after a public backlash.

There is clearly a balance to be struck between mobile video quality and file sizes that are appropriate for limited data allowances, but a blanket caps on specific networks doesn’t seem like a particularly consumer friendly approach. Fortunately, Netflix states that it is looking into new ways to give its members more control over video quality and is working on a mobile “data saver” option, which will begin rolling out in May. Problem solved?

UPDATE: Netflix has a press release for the reasoning behind it's throttling of Verizon and AT&T users:

As consumers increasingly watch video over mobile networks, Netflix is constantly exploring ways to give members more control over their Netflix experience. That’s why we will soon introduce a data saver feature designed for mobile apps.

The data saver feature will provide members with more control over their data usage when streaming on mobile networks, allowing them to either stream more video under a smaller data plan, or increase their video quality if they have a higher data plan. We’re on track to make it available to members sometime in May.

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. So in an effort to protect our members from overage charges when they exceed mobile data caps, our default bitrate for viewing over mobile networks has been capped globally at 600 kilobits per second. It’s about striking a balance that ensures a good streaming experience while avoiding unplanned fines from mobile providers.

This hasn’t been an issue for our members. Our research and testing indicates that many members worry about exceeding their mobile data cap, and don’t need the same resolution on their mobile phone as on a large screen TV to enjoy shows and movies. However, we recognize some members may be less sensitive to data caps or subscribe to mobile data plans from carriers that don’t levy penalties for exceeding caps. As we develop new technologies, we want to give all our members the choice to adjust their data consumption settings based on their video preferences and sensitivity to their ISPs data overage charges. We’ll provide more details as we get closer to launch.

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