Carriers are taking a page from discount airlines

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The carriers are up to something. With one fight in the net neutrality war lost, they’re trying a new approach. Here’s an ad I saw on Beatport, a music site I buy a lot of music from.

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Specifically, I think carriers like T-Mobile are trying to pull a Ryanair on us, by obfuscating the debate and then using free services as a Trojan Horse for the tiered Internet.

Words matter; complacency matters more

When you’re trying to win people over, words matter. What might have happened, for example, if we’d called global warming (which seems quite pleasant, really) something like “Climate collapse”?

Realistically, not much. Because people are inherently complacent. I firmly believe that people who deny the effects that humans have on the climate don’t believe the climate isn’t changing. Rather, they oppose the government regulation and strictures on their lives that actually doing something will entail.

But when bad branding and complacency go hand in hand, the results can be astonishing. Consider the current hue and cry around net neutrality.

First, “Net neutrality” is a lousy choice of words. It comes down to a battle over the definition of fairness.

  • Fairness-as-equality says all packets should be treated equally. Users don’t want carriers to interfere—they assume they’re subject to common-carrier laws that say, “treat everything equally.”
  • Fairness-as-free-markets says a company should be able to charge whatever it wants, and have the invisible hand of the market sort things out. Carriers think this gives them an advantage, and they’re out to maximize profits because that’s what companies do.

Of course, the invisible hands are tied when a few large companies own the means of production and can erect barriers to entry.

  • In my native Montreal, for example, Bell Canada had taxpayers’ help putting all that copper in the ground, and as a result, had to let other service providers use the copper (in what’s called “unbundling.”) But from Bell’s subsequent profits it paid to put fiber into the ground, and it doesn’t have to share that fiber with anyone. The copper languishes. Bell defends itself by saying, “people can simply use wireless instead.”
  • At the same time it controls the towers that are needed to deliver access, and creates Byzantine processes that make it hard to compete.
  • Time Warner and Comcast—who are the only source of Internet access for most of their current customers—say they should be allowed to merge because they “don’t compete in any markets.”
  • They can do this in part because of an almost incestuous relationship between regulators and providers, fermented over decades of government-backed telecommunications initiatives.

Yet Big Carrier’s deep pockets and monopolistic positions, the Internet’s concerned citizens have done a pretty good job of opposing a tiered pricing model for access with events like Internet Slowdown day.

Don’t fight head on

Smart companies don’t fight this kind of opposition head on. When air travel was struggling, upstarts like Ryanair and Southwest were the darlings of the industry. Both avoided existing agent-based bookings, and didn’t play well with the rest of the industry. Southwest hedged against oil futures, which helped as air fuel costs rose. And Ryanair applied death-by-a-thousand-cuts to pricing.

The Ryanair ticket was cheap. Their CEO plans a $14 ticket to the US. They can do this because everything else costs money: movies, drinks, pillows, legrooms. They could even monetize toilet visits. This is a great strategy to adopt when consumers won’t let you reprice something. Big carriers do it too: Air Canada stopped providing meals, then started giving them to people for free in more expensive “premium economy” seats. The result? A price increase that happened over time, with less objection.

Telcos and Gift Horses

Anyway, on to the point of all this. I think the telcos know this. In June, T-Mobile announced that it wouldn’t include traffic from certain music services in its bandwidth totals. Music fans everywhere rejoiced. But this is still an un-neutral net. By making certain classes of traffic free, T-Mobile is creating a tiered Internet. Then they can increase prices slowly, and the net neutrality cause will be lost.

Unfortunately, nobody gets angry enough about free stuff to involve regulators.

It sucks, because everyone wants free music. I’m a big fan of T-Mobile; they have saved me thousands of dollars of onerous roaming charges with their no-contract (and not-tiered) Mifi services. But with the neutrality war leaning towards fair-as-in-equal, it’s time to look gift horses from big carriers squarely in the mouth.

After all, words matter. But complacency matters more.