Vodafone TV's clever mobile data trick tests net neutrality
Last week, Vodafone launched a new TV service in Ireland. Called Vodafone TV, the service is a fairly straightforward alternative to both Sky and Virgin, with practically all of the same channels as its competitors and at around the same price. It's bundled with Vodafone broadband on a landline that needs to be capable of over 40Mbs.
But other than a zippy interface and a Netflix-friendly remote control, the new service has one intriguing feature which could prove to be both its most attractive and its most controversial.
Vodafone has 'zero-rated' the TV service on its own phones.
In other words, if you take a TV subscription with Vodafone, you can also watch the channels live on two phones or tablets outside your home with no effect on your monthly Vodafone mobile data limits. This means that even if you have the cheapest Vodafone pay-as-you-go mobile plan, you can stream live TV on 4G for hours every day on your phone, racking up tens of gigabytes of additional monthly data and not pay a cent for it.
Given that Vodafone is the most expensive operator for data charges (although also easily the fastest on 4G), this is a very big move.
Commercially, it is very clever. More and more people are diversifying from a traditional sitting room experience to TV-on-the-go, largely through mobile networks and wifi. So this move will play right into their hands.
But for those who pay close attention to the regulation of the internet, it will also raise some eyebrows.
There is a concept called net neutrality which is being hotly debated in Europe and the US right now. In a nutshell, this is about greater commercialisaion of the internet. The basic rule of net neutrality is that internet providers like Vodafone, Eir or Virgin should not be allowed to give priority to some web services over others, especially for commercial consideration.
In other words, Tesco shouldn't be allowed to pay Eir €1m so that Tesco's website loads way faster than, say, Supervalu's when accessed from an Eir broadband service.
The principle is meant to protect smaller players, startups and ordinary internet users by keeping the web as unbiased (in access terms) as possible.
The issue is important enough for both the US and the European Commission to tie themselves in knots debating the issue. While the EU has talked about protecting net neutrality, it has actually started to water down its thinking on the issue. Last summer, the European Commission announced a compromise on net neutrality that would see "specialised services" such as internet television allowed in new prioritised fast lanes.
Does Vodafone's latest move to favour its own live TV streaming on its mobile service count as a breach of net neutrality?
Vodafone executives argue that it doesn't, as the TV service is its own initiative, not a deal struck with a commercial third party. In that vein, the operator argues that it has adhered to net neutrality principles by not zero-rating services such as Spotify, which it offers separately in a different promotional package.
Those who take a stricter interpretation of net neutrality may disagree with this, however. It is not hard to see a scenario where internet traffic over Vodafone's servers is prioritised to provide optimum service to Vodafone TV streams at the expense of other streaming services.
The real question is whether, and to what extent, net neutrality is going to be taken seriously by European regulators. Vodafone's TV service aside, there are numerous examples of creeping encroachment on the principle. All over Europe, mobile operators are starting to bundle services such as Whatsapp (which sends videos and photos as well as text) on a zero-rated policy. No-one appears willing to take responsibility for slapping them down when they do so. So if it proves popular with customers, it may not be long before we start to see bolder violations of the net neutrality doctrine.
There are also some who argue that strict net neutrality is naive and wilfully ignorant. This position holds that operators routinely make decisions about prioritising some types of data over others for operational reasons, even to the point of disadvantaging some customers over others. Making grandiose proclamations about what operators can or can't with traffic prioritisation, they say, ignores the reality of what such operators have to do to provide a smooth experience.
The position is complicated further by companies like Netflix, which now offers to pay for equipment that will allow operators to speed up access to its online video streaming service. On one level, this is a breach of net neutrality. On another, it's a practical response to make sure that a new type of service works properly.
Where does the real benefit to the end user lie? Privately, operators say that ever-more commercialised prioritisation is morally justified because internet services such as YouTube, Facebook and Netflix have been getting a 'free ride' on their networks for years.
End users people probably wouldn't agree. Few of us want to see a situation where the services you get access to are increasingly the ones who pay the broadband or mobile operator.
Getting Vodafone TV free on 4G may be a small step in this direction, even if it turns out to be a commercially popular one.