Bad AT&T Ideas Are Contagious: UK's Vodafone Wants To Try 'Sponsored Data' Idea

from the ridin'-them-pipes-for-free dept

Thu, Feb 13th 2014 2:13pm — Karl Bode

AT&T poured napalm on the network neutrality debate here in the States back in 2005, when then CEO Ed Whitacre proudly proclaimed in an interview he "wasn't going to let Google ride his pipes for free." Ed and most telco executives quite honestly believe that historically-pampered phone companies are entitled to an additional "troll toll" by content companies simply for the honor of touching the ISP network. Never mind that consumers and content companies already pay for bandwidth and (like Google) invest in infrastructure of their own, telco logic dictates that content companies get a "free ride" and must pay more. You know, because.

AT&T's attempts to double dip aren't just domestically dumb, predatory and dangerous, they seemingly have an infectious quality for overseas telcos looking for ways to make additional money for doing nothing, but who aren't gifted with AT&T's knack for truly obnoxious ideas. We've seen it in the way European telcos mimic AT&T's rhetoric in claiming content companies ride their pipes for free, and therefore really ought to pay an additional tax to the phone companies (again, you know, just because). Despite being such a bizarre, fundamentally flawed assumption, the concept carries a lot of traction in telecom circles, thanks largely to hired think tanks and PR flacks who go to great, great lengths to frame it as entirely reasonable.

Yet oddly, the "hey, give me more money for doing nothing" approach hasn't worked well, resulting in AT&T recently introducing their "sponsored data" idea. As we recently discussed, sponsored data involves certain large companies paying AT&T an extra fee to have their content not count against wireless consumer caps. While framed by AT&T as "free shipping" or a "1-800 number for data," it's simply more of the same idea, and potentially devastating for smaller companies and startups that can't afford to pay AT&T to get preferred listing in AT&T's promotional materials. AT&T's effectively imposing entirely arbitrary caps (based in no way on real-world economics or network congestion), then charging multiple times for the same bandwidth.

Not too surprisingly, AT&T's latest brain child has again had an infectious impact on overseas telcos. UK's Vodafone now says the company is interested in trying the sponsored data idea as well:

Vodafone is looking at offering sponsored data to its customers. The move would see customers agreeing to receive sponsored data on their devices in return for lower data bills. CEO Vittorio Colao revealed Vodafone's interest in sponsored dat this week. The CEO said he is closely watching US operator AT&T's recent move to allow sponsored data.

What Colao is watching for specifically is the regulator response to AT&T's sponsored data. If FCC boss and former wireless and cable lobbyist Tom Wheeler signs off on sponsored data as a form of "pricing innovation," that opens the door to the possibility that overseas regulators can be conned into thinking this is actually an innovative idea as well. It's worth noting that AT&T wanted to acquire Vodafone's wireless assets, but it's largely believed that AT&T's incredibly cozy relationship with the NSA has soured European regulators on the idea -- for now. After the European Parliament elections in May, it's very likely AT&T and Vodafone will merge to become one company, which can further help spread AT&T's bizarre and predatory logic worldwide.

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Filed Under: data, sponsored data, uk, wireless
Companies: at&t, vodafone

28 Comments

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Reader Comments

The First Word

“

Basic infrastructure just doesn't belong into the hands of private companies, period.

—Anonymous Coward

”

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Anonymous Coward, 13 Feb 2014 @ 2:17pm

Basic infrastructure just doesn't belong into the hands of private companies, period.
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Irving, 13 Feb 2014 @ 2:25pm

Wouldn't the easiest solution be for Google to just refuse, letting AT&T go ahead and block them?

AT&T wouldn't last more than a week before it lost 90% of its customer base due to lack of ability to check mail, search the web, etc.
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M. Alan Thomas II (profile), 13 Feb 2014 @ 2:31pm

If the amount paid by the content company directly offset my bill, that'd be . . . well, not fine, but better. Otherwise, as long as I wasn't going to go over the (arbitrary) cap anyway, it's meaningless.
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Anonymous Coward, 13 Feb 2014 @ 2:35pm

Re:
How about if they reduce that (arbitrary) "unsponsored" data cap a whole lot, like down to less than 1GB or so... your'e not really using that data... right?

You see everybody thinks it wont affect them, until one day it does...
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Karl Bode (profile), 13 Feb 2014 @ 2:46pm

Re: Re:
Well yes, that "savings" is coming home to roost one way or another, either by further manipulation of the data cap, or new pricing layers by AT&T, or just a higher overall bill.

You can also be sure that the money that say an ESPN pays to play along is somehow coming out of your pocket as well somehow.
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Karl Bode (profile), 13 Feb 2014 @ 2:49pm

Re:
Well the "genius" is that nothing's being blocked. If ESPN and DISNEY agree to AT&T and all of their apps bypass the cap (assuming consumers like this idea), other companies like Google are pressured to participate as well if they want equal footing. The real problem would be for smaller companies, developers or startups who couldn't afford to pay to play.
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Anonymous Coward, 13 Feb 2014 @ 3:04pm

Re: Basic infrastructure
I'm not sure why this is such a radical idea to most people. Basic infrastructure such as communications, water, power and gas are something that everyone needs and take huge investments to setup. Inevitably this is a massive gatekeeper against competition, so we get monopolies.

Surely these are something the government should be running?
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Anonymous Coward, 13 Feb 2014 @ 3:06pm

The answer...
The answer as I said before in the Comcast article is to not let infrastructure companies sell retail service.
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Anonymous Coward, 13 Feb 2014 @ 3:10pm

Dear Internet (not you, legacy clinger-ons and bureaucratic goverment types), we need a new Internet.
Sincerely, the Internet.
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Anonymous Coward, 13 Feb 2014 @ 3:20pm

Isn't "Sponsored Data" what repressive countries were trying to push at the International Telecommunication Union (ITU) meeting in Dubai, of the United Arab Emirates?

It's almost the exact same thing, except AT&T is using artificially low "data caps", in an attempt to frame their whole diabolical plan as "voluntary" and "opt-in".

If anyone choose NOT to "volunteer", they get hit on the head with the "data cap" club. AT&T uses this club to hit people with massive overages fees or denies access to services because their customers know using that service is out of their "data cap" league.
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DannyB (profile), 13 Feb 2014 @ 3:23pm

The REAL answer
You pay for your internet connection.

Netflix pays AT&T for 'sponsored data' to get a preferential connections to you the consumer.

Since Netflix's content is considered premium content worthy of preferential treatment, why shouldn't AT&T introduce a new fee to the consumer to get good access to Netflix content.

Ahh, nothing like triple dipping.
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Anonymous Coward, 13 Feb 2014 @ 3:54pm

not surprised really. every dumb idea in the UK goes to the USA and vice versa. it's to do with this 'special relationship' between Obama and Cameron!
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Anonymous Coward, 13 Feb 2014 @ 3:56pm

Re: Re: Basic infrastructure
Right, because if there's one organization we can trust not to abuse newfound power or make a complete mess out of something computer-related, it's the US government.
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Anonymous Coward, 13 Feb 2014 @ 4:03pm

Re: Re: Re: Basic infrastructure
right, as if private companies won't abuse powers they shouldn't have to begin with...

you know it doesn't really matter *who* abuses their powers, because both will eventually, BUT a government run company has some distinct advantages, they don't have to run on a for profit basis, and they can be forced to invest in unprofitable areas. and *that* is why infrastructure doesn't belong in private hands. the potential for abuse is about the same.

on a general note, this is not specific to the us government, I'm from germany and we have the same bullshit going on.
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gDub, 13 Feb 2014 @ 5:56pm

Sponsored Data works for small companies, too
I follow the industry, and Sponsored Data announced with a big insurance company, a medium sized MDAP, and a start-up mobile advertiser.

Don't jump to conclusions before we see what actually happens in practice.
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Anonymous Coward, 13 Feb 2014 @ 6:30pm

Re:
This includes broadcasting monopolies.
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gDub, 13 Feb 2014 @ 9:30pm

Do your homework, Bode
Your article spouts about big companies paying to be featured in AT&T's promotional materials. I don't see AT&T promoting any content nor services running Sponsored, but I do see small companies adopting the new technology.
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Anonymous Coward, 13 Feb 2014 @ 9:51pm

America really are a pox on the world.
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Anonymous Coward, 13 Feb 2014 @ 9:52pm

Re: Re: Re:
Ultimately it's an incentive for ISP's to provide inferior service for the non-sponsored internet.

Since they are not being paid to do it, they have no reason to maintain network and router hardware necessary to connect to sites other than the sponsored ones, resulting in a degradation of performance.

In theory that could metastasize into an arrangement where you pay only to access a particular site, such as $10 for Google, $10 more for Facebook... etc.

That is the true meaning of net-neutrality, being certain that the internet, the whole internet, the good and the bad, is efficiently accessible.

Going against net neutrality, is all about cost cutting (for the ISP) and control, anybody who thinks it's good for the consumer is either in denial, or has been drinking the kool-aid.
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Peter, 14 Feb 2014 @ 12:50am

the telcos apparently don't think it to the end...

Because "sponsored data" could go both ways. Google could pay the telcos for having sponsored data (that's the telcos reasoning) but if everyone wants so see youtube, google might have the idea, that they provide the full featured youtube at a decent speed only to telcos which *pay google*.
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Ninja (profile), 14 Feb 2014 @ 1:24am

A legacy we should thank mr Alexander Graham Bell. Though I'm not sure the real inventor of the phone would have fared better...
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ColinCowpat (profile), 14 Feb 2014 @ 2:54am

Content companies would need to bill customers to pay ISPs
In the final analysis, the consumer pays. This whole scam is a magnesium flare to divert attention away from net neutrality.

The funny thing I head this morning was that Comcast, at the request of the FCC, had a precondition from their NBC acquisition to obey net neutrality rules until 2018. Stupid or not? Why end date anything like that. It's like telling the Taliban the date they won't be confronted with any US troops in Afghanistan. I mean, what do you expect to happen if you're given a date beyond which you can gouge customers to your hearts content?
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Anonymous Coward, 14 Feb 2014 @ 7:53am

So let me get this straight... I want to watch an ESPN football game on my iPad, and an advertiser is going to pay for my data fees? And, this is a bad thing?

This is called advertising. Small start-up and large companies should have equally access to advertising. Should we not allow large companies to buy time for Superbowl commercials, because small companies can�t afford to do the same?
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ian waring, 14 Feb 2014 @ 8:10am

Response to: Anonymous Coward on Feb 14th, 2014 @ 7:53am
So you think Disney want to hand their ESPN margins over to Comcast? Why would they want to do that? What would be the end result? Naive!
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Cindie, 14 Feb 2014 @ 10:42am

AT&T Sponsored Data
Let's put this in different context. I'm an entrepreneur and I build a road from point A to point B. I invest a lot of $'s to do this. This road allows the consumer to easily get to point B to get valuable goods. The consumer brings a lot of these goods back over my road and clogs it up not making it easy for others to travel the road.... To keep the road passable to others, I have to spend more to maintain it or to widen it. Who pays for these improvements? The Consumer or the business selling the goods? Take your pick. Someone's going to pay. In this ever growing liberal, "progressive" world of which I'd be certain this author, Karl--I believe is his name--is a part of, I would think he would be happy that business, would pick up part of the tab. Mr. Whitacre is right to want to capitalize on what he and others invested to build what is quite reasonably the backbone of America's economic power. For the foreseeable future, we are, you know, a capitalistic country.
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John Fenderson (profile), 14 Feb 2014 @ 12:56pm

Re:
"I want to watch an ESPN football game on my iPad, and an advertiser is going to pay for my data fees? And, this is a bad thing?"

Yes it is, if your subsidy means that I will have crappier, more expensive service -- which seems like the most likely result.
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John Fenderson (profile), 14 Feb 2014 @ 12:59pm

Re: AT&T Sponsored Data
"Who pays for these improvements? The Consumer or the business selling the goods? Take your pick. Someone's going to pay"

And right now, without this risky "sponsored data" plan, both the consumer and business pay for the improvements. What's wrong with that?
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Niall (profile), 14 Feb 2014 @ 1:41pm

Re: Re: Re: Basic infrastructure
Certainly it works better if one company owns the physical network, and others run the services - look at rail, phones or even gas (I think) in the UK.
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