Please ensure Javascript is enabled for purposes of website accessibility

Verizon: T-Mobile CEO Is “Dopey” to Say We’re Streaming Low-Res Video

By Chris Neiger - Mar 23, 2016 at 7:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The T-Mobile CEO's unlikely claim that AT&T and Verizon are serving their customers inferior Netflix streams didn't go over so well.

Source: T-Mobile.

T-Mobile's (TMUS 1.69%) CEO John Legere has a history of spouting his opinions. Some of his outspokenness has proved beneficial, and other times it has seemed a tad immature.

But just last week Legere's words sounded flat out false, at least according to Verizon (VZ 1.75%) and AT&T (T 1.67%). Legere said in a video that its rivals' Netflix streaming quality is inferior to T-Mobile's, even when using its Binge On service.

Binge On let's T-Mobile customers switch over to a lower-resolution video stream (480p) in exchange for streaming that doesn't eat into their monthly data allowance. The service works with 50 popular video and music sources, including Netflix, ESPN and Spotify..

Specifically, Legere said, "And the duopoly is actually delivering your Netflix content at 360p. I'll bet you didn't know that. Go check; it's true." 

Them's fightin' words
Legere claims that its competition is intentionally downgrading customers' Netflix streams (presumably to save on bandwidth), but the two carriers say this just isn't true. 

"We do not reduce the resolution of any video on our network -- in fact, our customers on 4G LTE can get much higher resolution than T-Mobile's optimized 480p limit," AT&T told FierceWireless in an email. 

And Verizon Wireless' director of corporate communications, Chuck Hamby, said that the carrier doesn't set any speeds for playback, responding, "It's just a dopey claim and has no basis in fact at all."

Why this matters for T-Mobile
First of all, it's a bit surprising Legere would make this claim to begin with. You can believe that if AT&T and Verizon customers were watching Netflix in 360p you'd hear quite a bit about. That would be some poor quality video indeed. 

Secondly, it's a bad time for Legere and T-Mobile to throw some fuel on the fire that has ignited around Binge On. The feature has taken a few PR hits since it launched in November, mainly due to opt-in issues and net neutrality questions.

The original issue was that T-Mobile didn't make it clear to users how they could switch on Binge On, nor how to opt out of it. T-Mobile has fixed that, making it easy for users to opt in, and to turn the feature off when they choose to. But more importantly, the service has raised questions about whether or not the carrier is skirting net neutrality rules by allowing some content to count against a users' monthy data allotments while other content doesn't. 

It's worth noting that when Binge On was first introduced, FCC Chairman Tom Wheeler describe the service as "highly innovative and highly competitive." That's important, because the FCC is the governing body that determines whether or not Binge On is actually going against net neutrality.

Additionally, YouTube -- which formerly criticized Binge On for its 480p quality video -- just signed up as an official partner. YouTube climbed on the bandwagon after T-Mobile said it would allow Binge On partners to optimize their video streams. It's a huge deal for T-Mobile that YouTube is now on board, considering that the video streaming service accounts for 21% of peak downstream traffic on mobile devices.

In short, Legere picked a poor time to stir up its competitors -- just as it's starting to settle the issues with Binge On that critics were bringing up.

But at the end of day, Binge On lets T-Mobile customers opt into a feature that can save them gobs of data every month. Legere may have spoken incorrectly about Verizon and AT&T, but the service itself will likely continue to propel T-Mobile's explosive customer growth. The company's Uncarrier events, of which Binge On is a part of, have helped T-Mobile bring in more than 1 million net customers each quarter for the past 11 consecutive quarters.

Legere's claims about the AT&T and Verizon's Netflix streams may be untrue, but this event is  unlikely to hurt the carrier's growth. And that's probably what Verizon and AT&T are really the most unhappy about.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AT&T Inc. Stock Quote
AT&T Inc.
$21.31 (1.67%) $0.35
T-Mobile US, Inc. Stock Quote
T-Mobile US, Inc.
$136.81 (1.69%) $2.27
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$51.64 (1.75%) $0.89
Netflix, Inc. Stock Quote
Netflix, Inc.
$179.95 (2.90%) $5.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.