Sprint drops 600 Kbps video-streaming limit after outcry

With quick response, marketing flub will still be a net positive for Sprint, says one analyst

marcelo claure sprint

Sprint this week quickly reversed plans to impose a 600 Kbps limit on streaming video as part of a promotion called "All-In" that charges $80 a month for unlimited talk, text and high-speed data.

The All-In plan, announced Tuesday, ironically was intended to "end consumer confusion & frustration," according to a press release.

But the 600 Kbps video stream cap, originally contained in a footnote about the plan, incited widespread frustration and anger on social media sites and elsewhere.

The 600 Kbps limitation was interpreted by Roger Entner, an analyst at Recon Analytics, as a violation of Title II net neutrality rules, which Sprint had supported before the Federal Communications Commission. "To throttle video is such a clearcut violation of Title II," he said.

Even so, Entner said Sprint replaced the throttling language with "reasonable" terms that limit voice and data roaming off Spring's network onto other carrier networks. With the new language, he endorsed the All-In plan. "The whole experience [with All-In] is a net positive for Sprint," he said in an interview on Thursday.

Entner said Sprint probably mistakenly forwarded its older 600 Kbps limitation language from previous pricing plans first launched in June 2013. "They didn't pay attention and didn't dot their i's and cross their t's," Entner said.

It was quite a saga for Sprint. Hours after the All-in plan was launched Tuesday morning, Sprint CEO Marcelo Claure reacted to the criticism with a tweet on Tuesday night that said Sprint would remove the video streaming cap in the All-In plan: "We heard you loud and clear and we are removing the 600 Kbps [cap] on streaming video. #Allin and we won't stop."

Sprint replaced the 600 Kbps cap with usage limitations language regarding roaming on its website that now reads: "To improve data experience for the majority of users, throughput may be limited, varied or reduced on the network. Sprint may terminate service if off-network roaming usage in a month exceeds 800 minutes or a majority of minutes, or 100 MB or a majority of KB."

The earlier language that offended customers read: "Streaming video speeds will be limited to 600 Kbps at all times, which may impact quality." That language is no longer on the Sprint website, but was picked up by various bloggers and Web reports, including David Ruddock on Android Police. For its original 600 Kbps cap, Ruddock called Sprint, "officially America's dumbest carrier."

Even in Claure's Twitter stream there were critics of the original cap, including FloydVBased who asked, "How did anyone in your company [think] that was a good idea? 600 Kbps limit?? We live in 2015…not 1992."

In addition to Claure's tweet, Sprint released a statement late Tuesday that said, "some customers raised concerns about a 600 Kbps limitation—and we are acting immediately to address those concerns."

Claure was quoted in the release saying "During certain times, like other wireless carriers, we might have to manage the network in order to reduce congestion and provide a better customer experience for the majority of our customers."

In addition to Entner, analyst Patrick Moorhead of Moor Insights & Strategy commended Sprint for removing the cap. "Their initial video limit was incredibly low, so low, that I have to question their understanding of the video download market and consumer usage patterns," Moorhead said.

"If Sprint has a network issue, that's not the consumer's problem, it's a Sprint problem," Moorhead added.

Jack Gold, an analyst at J. Gold Associates, said he understands the "two-edged sword" dilemma that Sprint faces. "If everyone started viewing multi-megabyte videos, their network would crawl," Gold said. "On the other hand, users are now accustomed to viewing videos on a continuing basis, and many are large files. Sprint is not in a position to tick anyone off. Their subscription levels are not doing all that well. "

Sprint is the third-largest wireless carrier in the U.S., after AT&T and Verizon.

Entner said his opinion about Sprint hasn't been altered by the flub over including the 600 Kbps cap in the original All-In plan. "This experience won't have any long-term impact," he predicted.

Copyright © 2015 IDG Communications, Inc.

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