And that's just the beginning of where AT&T is screwing us. The company stands to reap massive tolls on the other end of that "most favored nation" deal with DirecTV, because it also offers something called "sponsored data" to other companies that want the same kind of privileged access to AT&T customers. So, for example, if Netflix wants to compete fairly with DirecTV, it would need to pay AT&T to exempt its video traffic from data caps.
T-Mobile and AT&T can get away with this to the extent that customers won't notice, and it's likely that many won't see how the strings are being pulled. When The Verge covered T-Mobile's Music Freedom and BingeOn programs critically, we heard from lots of customers who defended the services because they gave them more for their money.
Here's how T-Mobile CEO John Legere responded to BingeOn criticism:
"So why are special interest groups, and even Google, offended by this? Why are they trying to characterize this as a bad thing? I think they are trying to use net neutrality as a platform to get into the news. At T-Mobile we're giving you more video, more for free, and a powerful new choice on how you want your video delivered. What's not to love? Who the hell do they think they are? What gives them the right to dictate what my customers or any wireless consumers can choose for themselves?"
And here's what AT&T Entertainment CEO John Stankey said yesterday in response to concerns about zero rating:
"I don't know why anybody would want to take something away from customers that customers like. We think it's a great customer benefit. We think customers are voting already with their use of it. We've got an administration coming in that says they're about competition and customer choice."
That message is powerful because it's real. Zero rating gives customers something they actually need. But the ISPs are deliberately creating that need. In other words, the system is rigged. Music Freedom, BingeOn, and zero-rated DirecTV are good for customers because ISPs have built immense scarcity into their networks. Almost nobody offers unlimited data anymore because it's bad for business.