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Does Free Music Streaming on Smartphones Hurt Startups?


Music-Streaming

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T-Mobile's offer to not count music streaming against data limits is unfair according to the complaint lodged by a group of venture capitalists with the FCC, first reported by Bloomberg.

Venture capitalists and startup companies including Etsy and FourSquare met with the FCC last week, apparently upset over how some phone service providers exempt some of their features from counting as data usage. Their complaint is that offering those services for free "creates hurdles for startups who lack the resources to pay for such preferential treatment."

Doing so goes against the idea of net neutrality according to the group. As the FCC prepares to vote next week on what will likely be very strict regulations for net neutrality, this could very easily become an important aspect of the new system. T-Mobile has defended itself by arguing that its Music Freedom feature is just a way of standing out from the competition, not an anti-competitive tactic of some kind. Verizon has backed it up with its own submissions to regulators pulling for having companies on the Internet pay for data usage.

It's all another angle on what has already shaped up to be one of the most contentious votes in FCC history. There are no less than three Congressional investigations led by Republicans angry about net neutrality and arguing that the way the FCC came up with its proposal is illegal or was unduly influenced by the White House. That particular line of attack is somewhat specious, but there's no question that opponents of net neutrality are seeking every avenue to go against the FCC's plan.

T-Mobile told investors that the new net neutrality won't affect the music streaming service, which sends out 60 millions songs a day.

“If passed as we understand it, it will have no impact on Music Freedom,” he said. “We’ll keep an eye on it.”


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