T-Mobile recently introduced its version of toll-free data with BingeOn, a service that lets people stream all the videos they want from Netflix, HBO Go, Hulu and 20 other video providers.
The service is free to consumers as well as the video companies that participate. But BingeOn comes with a drawback: T-Mobile is degrading all video on its network to "DVD quality," unless people opt out of BingeOn. DVD quality is only 480 lines per screen -- significantly less than HD-quality, which requires at least 720 lines per screen.
This week, YouTube -- which doesn't currently participate in BingeOn -- and the Internet Association, a trade group representing many of Silicon Valley's largest companies, are raising concerns about T-Mobile's offering.
"Reducing data charges for entire classes of applications can be legitimate and benefit consumers, so long as clear notice and choice is provided to service providers and consumers," the Internet Association states on its site. "However, a reasonably designed zero-rating program does not include the throttling of traffic for services or consumers that do not participate."
A Google spokesperson added: "Reducing data charges can be good for users, but it doesn’t justify throttling all video services, especially without explicit user consent."
Initially, FCC Chairman Tom Wheeler characterized BingeOn as "highly innovative and highly competitive."
But the agency recently signaled that it's going to take a closer look at BingeOn. Last week, the FCC asked three carriers, including T-Mobile, for more information about their decision to exempt some material from subscribers' data caps.
The FCC's letter to T-Mobile specifically referenced its decision to degrade all video. That move came a few weeks after telecommunications expert Marvin Ammori publicly said the company probably was running afoul of the FCC's recent open Internet order, which prohibits carriers from throttling service.
"Degrading video quality this way violates the FCC’s no-throttling part of the net neutrality rule, which forbids reducing the quality of an application or an entire class of applications," he wrote in Slate. "This is one practice that the company should, and probably must, abandon."