AT&T's 'Sponsored Data' Program An Admission That Data Caps Have Nothing To Do With Congestion
from the just-another-revenue-stream dept
AT&T is no stranger to making a mockery of net neutrality rules. It heavily influenced the rules themselves and has several times taken advantage of loopholes to push its favored apps and services. AT&T is now making another attempt to further subvert the concept of net neutrality with its "sponsored data" plan.
AT&T launched a new billing program called Sponsored Data Monday at its developer conference at CES, which shifts mobile data costs from the consumer to the content provider. The idea is to create a two-sided charging model for mobile data, letting app developers and content providers foot the bill for their customers’ data use.By having developers and providers pay the "freight" for data, AT&T will once again be derailing net neutrality. A system like this will obviously favor deeper-pocketed entities, raising the barrier to entry for everyone else. Subscribers, nearly all of whom now have data caps, will be much more likely to use services and apps that don't cut into their monthly allotment. AT&T will also effectively collect twice on the data, once with the monthly service charge to subscribers (that isn't reduced if customers don't hit their caps) and once from any developers/providers who buy in.
AT&T and other carriers have been hinting at such a subsidized mobile internet for some time, but this is the first time that it’s actually put those ideas into practice. Under the program a content or service provider would pay AT&T to exempt their app, websites or even specific bits of content from consumers’ mobile data plans. Anytime someone consumed such exempted content on the mobile network, AT&T customers wouldn’t see it deducted from their data buckets. Instead, AT&T would subtract that data from a kind of universal data pool bought by the content provider.
AT&T tried to spin this positively, saying that purchasing a data allotment would work as advertising for apps, services or other content providers. "Free" means more subscribers should take advantage of the offerings, resulting in more traffic and business. Its reps were careful to mention that those "sponsoring" data would not receive preferential treatment in terms of having competitors throttled (as it has done in the past), but that obviously won't be necessary when data-hungry customers are looking for the best deal, data-wise.
AT&T even suggested this new model could be useful for BYOD businesses, allowing charges for data consumed on work-related apps to be covered by that business, rather than the subscriber. For subscribers, this may look like a great deal, but for AT&T, it's a new revenue stream.
But it's what's tacitly admitted by this program -- something AT&T avoids addressing -- that's the most interesting. Giving providers and developers the option to pay freight on data exposes these data caps for what they are: an arbitrary limit that exists only as new source of revenue.
Data-heavy apps and services will be the ones most likely to take advantage of AT&T's sponsored data program. Customers will naturally gravitate towards anything that doesn't eat into their data caps, especially if it's something like a streaming audio or video app/site. Any developer that buys in will see an uptick in use and the more data-heavy the offering is, the more likely it is that customers will take advantage of the "free" data.
Because of this, data usage by customers will go up, with the most data-heavy apps and services seeing the biggest increase in usage. According to the company line, caps are in place to prevent data hogs from creating network congestion and degrading service. But this program effectively encourages users to consume more data and use more data-heavy services. As long as AT&T is still making money (via data "sponsors"), then all previous handwringing about network stability no longer matters.
AT&T is likely facing a decline in income for data overages as consumers become more adept at staying under their data caps. The trend should remain unchanged, meaning fewer overages as time goes on. This fixes the income problem but does nothing to address the (false) concern AT&T deployed to justify its implementation of data caps. AT&T wants everyone to use more data, which will increase the amount it can collect from providers and developers. All in all, it's more evidence that equating data caps with network capacity is nothing more than a lousy spin job attempting to justify the replacement of unlimited data with multiple revenue streams.
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Filed Under: bandwidth hogs, broadband, congestion, double dip, net neutrality, paying for access, sponsored data
Companies: at&t
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Their customers include:
1. US Gov and local law enforcement gets charged every time AT&T hands over private information on citizens.
2. End-Users who subscribe to AT&T's voice and data plans.
3. Every business on the internet who has a product or service, and who wants their online business to remain competitive on the global market.
It's win-win baby! What's that you say? Businesses passing the increased operating costs onto their customers?
I'm sure all that "free" stuff AT&T's talking about will more than offset the increased costs customers will face when online businesses hike their prices up, in order to cover the increased costs of having to pay every single internet service provider on this planet, to deliver their services to customers in a "data cap limited" competitive market.
This is what happens when 95% of the US's mobile carrier market has been "merged" into four companies. AT&T, T-Mobile, Sprint, and Verizon.
Soooo competitive...
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AT&T, Comcast, Time Warner, Chase and Bank of America should all burn in hell for all eternity.
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They are probably hearing that a lot now, likely why they are fighting with T-Mobile by giving customers ~$400 to switch back ($200 for the smartphone, and $200 to come back.) They may win a few back, but I'll never deal with AT&T again, no matter how much they pay me. If AT&T buys out T-Mobile, I'll become a hermit.
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Huh?
AT&T is offering a buy-back program to T-Mobile customers. I don't think the government will allow anyone to actually buy T-Mobile, due to the anti-trust issues. Certainly not Sprint.
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That being said, there is some truth to the ISP claims that caps keep the network better for everyone as switching equipment running near peak capacity tends to increase latency at every step. But, as any network infrastructure business analyst will tell you, the cost of managing your traffic is greater than the cost of increasing bandwidth. Just measuring and logging usage puts more strain on equipment than routing packets does and eats up more capacity the larger the managed network gets (inverse economies of scale). That is except on services that provide fixed divisions of bandwidth, like business fibre.
Basically its a money grab, because ISPs hire guys just like me to tell the same thing. Or I should have a bigger paycheck.
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Luckily T-Mobile has no data caps on their top plan.
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"First they'd have to show that they've used the money the government threw at them to upgrade their network before such an excuse would even begin to be believable."
by That One Guy
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Yeah, you're a fucktard.
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This too shall pass
At the present time, we suffer from a terrible lack of competition in cellular services. But it will not always be so. Let AT&T piss everyone off; it will just hasten the day when data caps and annual contracts are a distant memory like 40MB/mo wired plans.
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Why do you see the competition situation improving? People getting mad at AT&T won't do any good if they don't have any better alternative.
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but when they can fool thick politicians into believing they do and therefore justify price jack ups, they are wonderful!!
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No different than 800 service
So why are two-sided markets OK in the telco world, but not OK in the broadband world?
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The internet is totally different in that it is like a public road network - it costs the same to drive anywhere (ignoring fuel). But, this is like the road maintenance company throwing up roadblocks once you have driven a certain distance and then charging certain businesses not to be roadblocked.
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Having recently driven through Chicago, I can attest that this is done on certain roads as well. Every ten miles you have to pay to drive the next ten miles. By the time I got where I was going, I was both incredibly pissed off and incredibly grateful that I live in a part of the country that doesn't go for this awful toll road action.
It pisses me off for the same reason that AT&T's plan pisses me off: the internet, and roads, should be public spaces that are open to all without charges on top of what we already pay.
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That's how we got public road systems in the first place. In Adam Smith's day, virtually every road (even in the city) was a toll road. The business community, upon reading Adam Smith's writings, realized how this actually hurt everyone, and got together and figured out how to get a public road system in place.
We've been going backwards for some time now -- and ironically it's the very corporate sector, which takes Adam Smith's work as near Gospel, which has been driving the regression.
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I'm not saying toll roads shouldn't exist, but they should be the extreme exception (for instance in Britain they are just about only ever new bypass roads), and ideally there should be alternatives to them.
This is like the ISP charging users for roadblocks and then charging businesses not to be roadblocked.
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Toll roads (and bridges) can have have a legitimate use. Owners of private roads, for instance, can do whatever they want. Also, if a road or bridge is in desperate need of construction or repair, there can be times when tolls are the only way to fund it.
In that situation, though, the tolls should end as soon as the debt is paid (which never seems to happen), and the government should be the one collecting the tolls, not some private sector company (as is usually the case).
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T-Mo CEO tossed from AT&T party
http://recode.net/2014/01/06/t-mobile-ceo-on-being-thrown-out-of-atts-party-i-just-wanted-to-see-mac klemore/
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Not a New Revenue Stream ... or is it?
Except...wait...it would be a new revenue stream if they double-dip, charging both the customer and the data provider. It wouldn't surprise me if that's what they plan to do, since double-dipping will be almost impossible to prove.
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Re: Not a New Revenue Stream ... or is it?
FTFY. ;-)
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Hostile Takeover
Put the telecom execs back to work as used car salesmen.
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Who is going to actually buy into this?
However price point wise, this is a ridiculous direction and quite blatantly an attempt to suck in more cash flow. No Lie soon they will be hurting from it.
T-Mobile is expanding and aggressively pushing No Overage charges at lower rates ATM have one company trying this out at $40 Per line.
This is helping on me dragging down Verizon Rates with their data pooling plan ranging around average of $56 per line.
Hopefully Sprint will be smart enough after the migrations to to combat T-Mobile head to head in price planning.
Really this no real bright future for AT&T that I have seen at this point in time.
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I am confused. I just want the speed of interenet that I am paying for instead of half of what I am paying for. I know that Att&t can give it to me because I am contantly getting mail asking me to upgrad to faster interenet speed. I want to cause a class action law suit but it looks like someone already tried that. So i am confused and don't know where to start but I don't want to just stop.
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