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Summary:

MetroPCS’s discounted 4G LTE mobile broadband plans, announced yesterday, weren’t just the beginning of a possible price war. It represented a long-talked about tactic of ISPs charging for content at different rates and potentially favoring their own services while charging more for access to rivals.

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MetroPCS’s discounted 4G LTE mobile broadband plans, announced yesterday, weren’t just the beginning of a possible price war. The announcement represented a long-talked about tactic of wireless ISPs charging for content at different rates and potentially favoring their own services while charging more for access to rivals. The new LTE plans raise the specter of consumers paying more for certain kinds of content and the potential for a fractured Internet experience, where users may not be free to jump easily from one site to another.

The company appears poised to test the latest net neutrality rules enacted by the FCC, which created fewer protections for discrimination of mobile content. Free Press, a media advocacy group, has now called upon the FCC to investigate MetroPCS’s new pricing tiers. MetroPCS spokesperson Drew Crowell said the carrier is not prepared to discuss the Free Press statement or net neutrality implications of its latest service plans.

The MetroPCS’ LTE plans include three tiers. The $40 a month tier includes unlimited talk, text, 4G Web browsing with unlimited YouTube access. A $50 tier adds international and premium text messaging, turn-by-turn navigation, mobile instant messaging, corporate e-mail and 1 GB of additional data access (streaming services, VoIP and other services) with premium audio and video available through MetroSTUDIO when connected through Wi-Fi. For $60 a month, users also get unlimited data access and MetroSTUDIO premium content such as 18 video-on-demand channels and audio downloads.

Where this gets tricky is that users are allowed to have unlimited YouTube access and unlimited web browsing under the $40 tier. But to get broad unlimited Internet access for things like VoIPSkype, streaming video and audio services, data uploads and gaming services, users will have to move up to the $50 or $60 tier, MetroPCS’s Crowell said. Also, the $50 tier provides users access to MetroPCS’s MetroSTUDIO over Wi-Fi and unlimited access over broadband in the $60 tier. What this all means is that users can browse Facebook all day long and could click on any YouTube links to see the video. But if they click on a link to another video service, users can visit the site but won’t be able to view the video. Facebook videos are also likely blocked as are streaming music services such as Pandora. Crowell said YouTube doesn’t have a special relationship with MetroPCS. It was just one of the most popular multimedia sites among MetroPCS consumers so the carrier decided to allow unlimited access to it.

“We saw that YouTube is one of the main ways that our customers get multimedia content and we wanted to make sure that content was available to them,” Crowell said. “The $50 and $60 plans are about choice and providing options to meet the needs of our consumers.”

We’ve been talking about the desire of operators to charge by time and app. European carriers have started doing this but American operators have not moved into this area because of net neutrality concerns. The latest FCC net neutrality rules don’t prohibit this kind of behavior and are more concerned with outright blocking of content. In fact, as Stacey wrote about, it opens the way for more usage-based pricing. But the rules also allow the FCC to investigate anti-consumer behavior, which is what Free Press appears to be playing off of.

These new plans, if they’re allowed to stand, show us what the future of mobile broadband will look like if operators have their way. It could be a frustrating experience for users, recreating a walled garden. It’s not surprising that MetroPCS is trying to push this agenda. Most operators would stand to gain a lot if they can get this type of plan to fly. Eventually, I expect MetroPCS won’t be the only operator looking to lay down new toll layers atop the mobile Internet.

Related GigaOM Pro Content (sub req’d):

Post and thumbnail photos courtesy of Flickr user ell brown

  1. Scratch MetroPCS off my list of possible vendors. Policies like this automatically means I would never use their product.

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    1. What a bunch of douchebags. I agree with you.

      They lost any potential customer they had, if I decided to go with them toward the future.

      Personally, I am sick an tired of paying that much to have access to these networks anyway.

      My new years resolution was to cut costs.

      I cut my contract phone this new year. Fourty bucks or more means a contract to me.

      1. I got a prepaid sim with TMOBILE and use the 1 day web pass when I need it.
      2. Got an unlocked Smartphone.
      3. I stay near wifi. I have wifi @ home, near some of the streets on my way to work and back, and @ my job itself. The wifi is faster anyway.
      4. I use google voice for texting and such, despite the privacy concerns, unfortunately.

      All to cut costs AND to screw pricks like these guys over

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  2. Just the tiny tip of the iceberg, a sneak peek at the misery to come. Think this is bad, just wait until Verizon iPhone vs. AT&T iPhone wars.

    Ultimately we ( consumers who are registered to vote ) have no one to blame but ourselves. Our lack of action let the telcos buy off all the Congressmen they needed to have their way. Time to pay the piper for our apathy and laziness.

    R.I.P. Net neutrality 2007 – 2011

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    1. You’re right. A million dollars of lobbying can get you another $100 million of margin. Organized crime has gone mainstream.

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      1. Zack Lee Wright Tuesday, January 4, 2011

        Agree 100 percent. Not only do the lobbyist successfully bribe politicians daily, in many cases THE LOBBYIST helps to actually write the legislation !!

        Washington is a cesspool of corruption and incompetence, make no mistake about this.

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  3. I’m very surprised that it’s one of the smaller carriers that’s among the first to cripple their service. I thought for sure that Verizon would be the first to go. After all, if you have the most customers, you can always stand to lose a few by raising rates. With the dizzying list of tiers and options, I can’t imagine too many people will be flocking to MetroPCS (especially considering they don’t have any decent handsets, and their network is locked).

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  4. Josh Holbrook Tuesday, January 4, 2011

    It seems as though you are crying wolf. I don’t see anything from MetroPCS that says users are precluded from going to other internet sites. It simply says if you choose to go to YouTube the downloaded data doesn’t count against your cap. It also doesn’t appear to restrict users from going outside the walled garden. The gate is open. However, some plans provide access to MetroPCSs own content. Perhaps you are a bit too eager to find fault and create a stir. Sensationalist journalism.

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  5. GigaOm – ever a mouthpiece for Google and blatantly anti-ISP – kicks off the new year by condemning pricing plans which align the prices of services with their costs. The goal: to harm ISPs. And if and when ISPs are regulated according to Google’s whim and most go out of business, Stacey will surely whine about a lack of competition.

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  6. [...] Kirkpatrick at ReadWriteWeb and Ryan Kim at GigaOM are both playing up how this will likely play an important role in the “struggle over network [...]

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  7. will we be in violation of some TOS rule and risk a law suit if we root our phones and find a way to tunnel other apps through proxies?

    what about VOIP as a browser app? etc. etc.

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    1. won’t be able to root because Androids will only be allowed on the $50 plan, just like now. I have MetroPCS CDMA Android and it has to be on the $50 plan or above. LTE Androids will be the same. $40 plan will be for simple candybar or flip phone LTE phones. Parents will be getting those for kids just to stay in touch. They have locked down proprietary broswers, no apps…

      This article is much ado over nothing. Smartphones at Metro right now start at $50 and higher. That remains the same. Only difference is the LTE $50 plan will have a cap instead of being totally unlimited.

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  8. NewTeeVee, you really need to understand something about capitalism. Because you’re very likely a download junkie, you want everyone else to pay for your downloads. Think of it this way. Would you want everyone to pay the same electric bill? You could use as much electricity as you like and pay the same amount. Sound like a good idea? Sure, it is a great idea IF you use more electricity than the average user. But it is a bad idea if you use less electricity than the average user since you would then be subsidizing the heavy electricity consumers. It is more fair to all that you pay for the electricity you use.

    And all those of you who are ripping on MetroPCS, you’re wrong to be attacking MetroPCS since it was MetroPCS that brought about unlimited cellphone plans. It was the first cellphone company to take the gamble. EVERYONE in the industry thought they would be bankrupted by offering such. All the industry wonks said the heavy cellphone users would rush to MetroPCS and suck them dry. Well, the heavy cellphone users did rush to MetroPCS and did suck them dry … for the first three months. But not after that. By three months, non-heavy cellphone users liked the idea of never having to worry about their cellphone minutes anymore and started coming to MetroPCS. No more worrying about going over your minutes and being penalized for doing so. No need to track your minutes. No need to worry about your minutes when talking to someone for a long time. To many users, that peace of mind was worth possibly paying a bit more than they were used to paying. That was the edge that MetroPCS used against all the big boys in the industry and it was a HUGE hit. If you have an unlimited cellphone plan from your cellphone company (whether it is from MetroPCS or not), you can thank MetroPCS for that.

    But nothing is free. MetroPCS has more than one unlimited cellphone plan and they’re designed for specific users. If all you need is a cellphone to call locally and nationally, their lowest plan is for you. Want more? Want different functions? Want to do different things with your cellphone than just make calls? You get a different plan. And each of those plans are STILL unlimited.

    Another thing to keep in mind is that MetroPCS isn’t an ISP but a cellphone company. What they’re talking about is you surfing the net on your cellphone, not computer at home.

    Lastly, I am not surprised at all that MetroPCS is the first to make this move. MetroPCS pioneered unlimited cellphone plans. They’re not afraid to go against the current. They were going against it from the moment they opened their doors. They do know that they are not one of the big boys so they know they cannot be cavalier about their decisions. They don’t want to lose any subscribers. But they also have the best read on the industry and consumers than anyone else. Their track record proves that. Them making this move was done for a reason and that was VERY likely to keep their cheapest cellphone plans as cheap as possible so poor people can afford them.

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    1. Wrong. Electricity has to be generated. MetroPCS does not generate content or have to burn more coal to meet demand. All it has to do is supply the pipe. Moreover an electric company does not discriminate based on what device is using the electricity. The solution to over-consumption would be pricing tiers not discrimination based on source or type of data. Walled gardens do not aid broader capitalism, they restrict it and slow down innovation.

      -Ardent Capitalist

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      1. What weird world do you live in? You don’t think running a cellphone company costs money? You don’t think the more people use their cellphones, it costs the cellphone company more?

        Yes, MetroPCS’s service packages are “walled gardens”. There’s why there are different ones. Let me guess. You want unlimited EVERYTHING for your cellphone on MetroPCS, right? Well, you can get that but you’ll have to pay more. The OVERWHELMING VAST majority of cellphone users don’t and have NEVER surfed the net on or downloaded videos to their cellphones. They use them to make calls, send text messages, and that’s it. You want to do more with your cellphone then pay more. Stop asking the poor to pay for your video fix.

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      2. How big a pipe? What is the over subscription of that pipe?

        The fact is they don’t burn coal to make the heat but they do need to buy the bandwidth to provide the dumb pipe you want?

        Going back to the coal to make heat analogy you only get one lump of coal per day. How much heat can you provide for your customers?

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    2. Wrong. Electricity has to be generated. MetroPCS does not generate content or have to burn more coal to meet demand. All it has to do is supply the pipe. Moreover an electric company does not discriminate based on what device is using the electricity. The solution to over-consumption would be pricing tiers not discrimination based on source or type of data. Walled gardens do not aid broader capitalism, they restrict it and slow down innovation. They leave profits to large corporations, limiting what is left for the entrepreneur and as such limiting innvotaion.

      -Ardent Capitalist

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    3. Scott,
      You’re missing the underlying point of the article. Nobody is saying MetroPCS can’t charge whatever the heck they want to, what’s being argued by net neutrality proponents is they shouldn’t be allowed to block access to certain sites based on how much you pay per month. If I’m an unemployed person (which there are a lot of now a days) and I can only afford the lowest price plan, why should I be blocked from accessing certain sites because of that? If MetroPCS wants to have a tiered plan based on how much you download per month (megabytes, gigabytes, terabytes, etc.) that’s fine, as long as they aren’t selectively blocking certain sites based on what THEY think the customer wants, or based on which large companies can pay them the most extortion money per month. For example: Google…if you think MetroPCS doesn’t have some kind of agreement with Google then you’re very naive. It’s already well known Google is working some kind of deal with Verizon.

      As far as being a “download junkie”…that tag can no longer be hung on the limited few “nerdie” types. That tag is quickly becoming the norm. With everything going to streaming, every single one of us will one day be like your so called “download junkie”. Netflix, Youtube, Vimeo and hundreds of other sites all have streaming content available through your wired or wireless internet connection. I have a Netflix account and watch streaming movies. So I guess that makes me a download junkie. Along with the other 10+ million Netflix subscribers. The telcos and cable companies know this and they are gearing up for it. They want everyone of us to become a download junkie so we get hooked on the convenience. Once they’ve got so many people firmly entrenched and needing the service they’ve got us. Then they can charge whatever they want and many will pay it for fear of losing that convenience. It’s like a crack dealer giving out free samples. Get them hooked then make them pay.

      You may think that what MetroPCS is doing is “bleeding edge” and unique and is what is best for the consumer. Since there are probably many people like you that believe that, then MetroPCS marketing is doing a good job. It’s NOT bleeding edge, you can rest assured this stuff is in the works at all the telcos and cable companies. If MetroPCS is allowed to move forward with selective internet access then it is only opening the door for more atrocities. Pretty soon it will be “Oh, you want Facebook? That will be an extra $10 per month. You want to use a search engine other than Google? Sorry, nobody else would pay our extortion money, so you only get Google”. It will be as screwed up as the cable and Satellite TV companies are today. Hey for only $30 per month you can have 100 channels per month. 95 of those are music channels, 3 of them are ESPN, 1 is 24 hour news and 1 is actual entertainment. If you want to pay $40 per month we’ll throw in 4 more ESPN channels, 3 more 24 hour news, 6 religious channels and 1 more entertainment channel. If you want all the good channels then you can pay $150/month. This is exactly what will happen with the internet as we know it today.

      Once these companies are allowed to block access to certain sites and disguise it as “being best for the consumer” we are totally SCREWED.

      The internet was designed to be an open platform where people could share information and ideas without fear of censorship or blockage. It was funded by the government (gasp). Now the telcos and cable companies will take that openness and ruin it just like everything else they touch. And don’t give me that same old tireless argument about capitalism. Like I said above, this is about censoring sites, it’s NOT about telling MetroPCS or Verizon or any other pig of a company what they can charge per month. If MetroPCS wants to charge a million dollars per month for 1 meg download limit, fine, go ahead and do it. But don’t censor what’s included in that 1 meg data cap.

      I’m so sick and tired of people whining about too much government control. If we didn’t have some checks and balances we’d all be dead. Do you think the drug companies actually care about whether their meds kill a few thousand people per year? Thank God for the FDA. Well, that’s what the FCC is trying to do with net neutrality rules. Once again, they are NOT trying to tell companies what they can charge per month, but instead trying to say they cannot “play favorites’ when it comes to internet censorship.

      If you’re happy with the path this is taking then good luck to you. I only hope there are people that actually care more about freedom, innovation and job creation than there are like you. You only seem to care how much more money can be put into the pockets of the select few. The rich get richer and the poor get poorer and network access is censored, right? As long as the top 2% continue to rake it in that’s all that matters. The heck with the disappearing middle class and growing poor. Just keep sucking them dry until there’s no one left to get money from.

      This country is in a sad state of affairs but big business doesn’t care. They only care about themselves.

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      1. I was going to give point-by-point reply to you, but it quickly became clear that you’re a conspiracy nut and not worth it. I know you cannot see it, but anyone reading your rant can. It just gets more and more bizarre as it goes along.

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      2. The spin on this site and by some of the comments is ridiculous. Instead of saying “MetroPCS LTE Plans to Charge More for VoIP & Streaming” you could equally say “MetroPCS LTE to Discount plans without VoIP & Streaming capabilities”.

        And for you Bill: at one point you say you don’t care what MetroPCS charges: “it’s NOT about telling MetroPCS or Verizon or any other pig of a company what they can charge per month. If MetroPCS wants to charge a million dollars per month for 1 meg download limit, fine, go ahead and do it.”

        Well if you don’t care what they charge, pay for the most expensive plan that has no restrictions. Problem solved. But don’t ask the FCC to take away options for other people that want cheaper plans just because they aren’t good enough for you. And if that still isn’t what you want, guess what: you can choose from at least 4-5 other carriers. What is the problem again?

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  9. @Scott –
    So in your mind it’s ok if “the poor” don’t have access to the same content that the rest of the people have access to? Nice. Talk about discrimination. You think because someone can’t pay for unlimited access they don’t want to have the ability to access any site they want?

    Once again, setting up a pricing tier based on amount of data you want to download INSTEAD of the type of data you want to download is the only acceptable solution.

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    1. Bill,

      It isn’t discrimination but reality. Everything has a cost. If you load up a cellphone plan with lots of features, unlimited access to everything, and so forth, it will cost more. That’s a fact. That’s reality. It is you who doesn’t care about the poor, not I. The poor do not have the luxury of spending what little money they have on non-necessities. For the poor, they need to be able to call and text people FAR more than they need to surf the net. For a cellphone company like MetroPCS that designed itself to be a low-price cellphone company (they were also the first to offer no-contract plans which allowed illegal aliens to get an unlimited cellphone plan), they need to strip down their cellphone plans so they can price them low enough so poor people buy what they can afford.

      It isn’t that people might not want access to any site they want. It is that the poor cannot afford that luxury but can afford a cheap stripped-down plan. That’s what they want FAR more than seeing some baby laugh on YouTube. Would they like unlimited access to everything? Sure. They would also like to drive a Ferrari, vacation in Paris, and eat T-bone steaks every night. But they cannot because they cannot afford to do so. They have to watch what they spend their money on and make choices. You don’t want to give them choices. You want them to pay more because YOU think they want access to stuff you want access to. And if they cannot pay more, then what, Ben? What do you say to them then? Too bad? What?

      And if you’re a cellphone company that sells unlimited cellphone plans and you want to sell a very cheap plan that poor people can afford, you have to restrict what they can do and access. No international calls. No YouTube. And things like that. If you restrict how much people can download, you’re just exchanging minute limits for download limits. Their plans are unlimited within the confines they make subscribers very well aware of. And those subscribers are happy because they either can afford it or are not paying for something they don’t want to and wouldn’t use.

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  10. So just because Free Press says it, that makes it so?

    I am so glad OM and its commenters have found MetroPCS liable mere on the basis of a Free Press allegation. That will spare the rest of us poor unwashed the drudgery of waiting for the results of the FCC’s actual investigation.

    I mean really, why waste time with the FCC when Free Press has already given us the answer?

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  11. This article is much ado over nothing. Smartphones at Metro right now start at $50 and higher. That remains the same. Only difference is the LTE $50 plan will have a cap instead of being totally unlimited.

    On the $40 plan, you won’t be able to root because Androids will only be allowed on the $50 plan, just like now. I have MetroPCS CDMA Android and it has to be on the $50 plan or above. LTE Androids will be the same. $40 plan will be for simple candybar or flip phone LTE phones. Parents will be getting those for kids just to stay in touch. They have locked down proprietary broswers, no apps…

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  12. why the hit piece on metropcs? your article is misleading and inaccurate. you misrepresent what they offer totally.

    do you REALLY advocate using a cell phone to access the internet to make phone calls via VoiP? WHY don’t you just use the (wait for it…) CELL phone to make your calls!

    metro offers unlimited use – if netflix isn’t included, have you considered that this is a technical/software issue? why not check that out before you write nonsense like in this article.

    i really suspect the entire attack has to do with the threat felt by the “big boys” in this game. you know which ones – the ones who charge by the minute, limit access to 5g a month, have outrageous prices, demand huge deposits, etc.

    i’m a long time user of metro and find their service the best in the market for price and services. no minutes. no limit. multiple offerings of services – i pick and i choose what i want to use.

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  13. [...] pricing, pricing that ignores the reality of consuming more data at faster speeds, and possibly limits on what one can download in cheaper plans are all likely to make an [...]

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