AT&T Tries To Claim That Charging Users More For Privacy Is A 'Discount'

Broadband

from the tomato,-tomahto dept

Tue, Apr 5th 2016 6:28am — Karl Bode

Last year, AT&T launched the latest sexy trend in broadband -- charging users significantly more money if they want to opt out of their ISP's snoopvertising. It basically works like this: users ordering AT&T's U-Verse broadband service can get the service for, say, $70 a month. But if you want to opt out of AT&T's Internet Preferences snoopvertising program (which uses deep packet inspection to study your movement around the Internet down to the second) you'll pay at least $30 more, per month. With its decision, AT&T effectively made user privacy a premium service.

As the FCC has started pushing for new privacy rules (precisely because of ISP moves like this), AT&T's luxury-privacy option has been under heightened scrutiny. Speaking at a recent Consumer Federation of America panel, AT&T regulatory affairs executive Jacquelyne Flemming feebly tried to defend AT&T's policy, likening it to a "discount" that bestows "reciprocal benefits" to consumers:

"We, AT&T, have a broadband Internet access service that we market to customers that if you agree, if you opt-in, to the use of your data for various reasons, then you get a discount,” Flemming continued. “That doesn’t mean that other people who don’t get the discount are paying for privacy. I wouldn’t say that,” she explained, even though that is in fact actually the case."

So, you see it's not that AT&T's charging you more just to protect your data, it's that you're getting a "discount" by letting AT&T snoop into your online behavior. It's much the same way that ISPs aren't charging you aggressively more money for buying just broadband, they're giving you a "discount" if you sign up for phone or television service you may not actually want. Flemming then amusingly proceeds to argue that hey, at least not all ISPs are doing this:

"I think that there is a benefit to the customer,” Flemming finished, “and it’s not as if we’re talking [all] broadband Internet access services, of which there are a wide range of them that are available to customers. In this particular instance, if you like to get this benefit, then there is a reciprocal benefit to the customer and the company."

Right, except most users don't have the choice of more than one or two broadband providers, and if they're both charging you a premium to opt out, you'd be shit out of luck. Flemming also severely misstates what's happening here. A detailed look at what AT&T is doing shows that it's actually really hard to find how to opt out in the first place. Users have to read numerous instances of fine print to find the option, which isn't really explained clearly. So not only is AT&T making it more expensive to opt out -- they're intentionally making it notably difficult to actually do so.

That, combined with AT&T and Verizon's foray into stealth packet headers, is why the FCC's now exploring broadband privacy rules -- rules that AT&T has breathlessly opposed in several blog posts. And while these posts throw out a wide variety of false claims about how consumer privacy protections aren't necessary because broadband ISPs are harmless sweethearts, there's really one idea driving AT&T's thinking: an empowered, informed consumer with the tools to protect their privacy means AT&T makes less money.

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Filed Under: broadband, fcc, privacy
Companies: at&t

39 Comments

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Reader Comments

The First Word

“

what marketing?

"We, AT&T, have a broadband Internet access service that we market to customers that if you agree, if you opt-in, to the use of your data for various reasons, then you get a discount,” Flemming continued.

If that's true, then AT&T's advertising should prominently say the "actual" cost of the service. They can advertise the "discounted" price just as prominently, but if there's any truth at all to what she's saying then it should be obvious from the marketing materials. Is it? If not, then it isn't a discount.

—Jason

”

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Anonymous Coward, 5 Apr 2016 @ 6:35am

“That doesn’t mean that other people who don’t get the discount are paying for privacy. I wouldn’t say that,” she explained

Does this mean they still spy on those who pay more?
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Anonymous Coward, 5 Apr 2016 @ 6:47am

So which is it?
AT&T thinks being able to snoop on you, presumably for advertising, is worth $30 a month to them. At the same time, newspapers and magazines are crying poor and insisting they can't survive on online advertising.

Who's doing the Hollywood Accounting here?
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Anonymous Coward, 5 Apr 2016 @ 7:04am

Re:
Yes. They are still spying on you and selling your information. They are just letting you pay more to feel better about it.
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Anonymous Coward, 5 Apr 2016 @ 7:06am

Re: So which is it?
The newspapers and online sites actually provide something of value so it costs more to service. Add to that the outrageous fees AT&T gets for using a phone and it's really just a cash grab. There service really wasn't all that great and we halved our bill by switching to Ting which piggybacks on Sprint.
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Anonymous Coward, 5 Apr 2016 @ 7:12am

good luck to the FCC but it needs weight from Congress on this and there's more chance of finding a chicken with teeth than that happening! they're too busy filling their individual coffers, especially now due to the latest rich list! i wonder how many are on that?
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Anonymous Coward, 5 Apr 2016 @ 7:15am

They're really trying to argue that charging you more for privacy is a discount? This is an abuser's mentality. I'm only hitting you for your own good!
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Ninja (profile), 5 Apr 2016 @ 7:17am

Ideas
Since they are being obnoxious, specially because they can, why not introduce more fees?

- $30 to use premium customer service (read: any customer service at all)
- $30 for not throttling the connection during peak times (along with the $30 to remove the caps of course)
- $30 not to throttle you during non-peak times (because hey, why not?)
- $30 not to receive incessant marketing calls and mail about their awesome $30 tiers
- $30 for the privilege of not incurring in hidden fees (transparency fee)
- $30 to avoid rogue technicians from cutting your cable randomly

Go on. At this point why not test the limits on how toothless the regulatory efforts are?
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JF (profile), 5 Apr 2016 @ 7:30am

Discounts
My thought is similar to what Ninja said:

We aren't charging a premium to remove data caps! We are offering a discount if you allow us to apply them!

We don't charge a premium for equip rental! We offer a discount if you bring your own equipment!

We don't charge a premium if we roll a truck! We offer a discount if you fix your own problems and never call us!

Heck everyone is actually our customers and since we don't even charge a premium to provide internet service! We simply offer a 100% discount if you get internet service from someone else!
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Anonymous Coward, 5 Apr 2016 @ 7:38am

Re:
Even without that statement I'd be very cynical of them actually stopping the spying when you pay. How can you even verify that?
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Anonymous Coward, 5 Apr 2016 @ 7:44am

State Actors
By passing on any and all requests from the government, the companies enjoy effective immunity and monopoly status. Corrupt governments spawn corrupt parasite companies that reflect the makeup of their host.
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Karl Bode (profile), 5 Apr 2016 @ 8:05am

Re: Re:
They've refused to even really confirm what they're doing, so good point.
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Jason, 5 Apr 2016 @ 8:08am

what marketing?
"We, AT&T, have a broadband Internet access service that we market to customers that if you agree, if you opt-in, to the use of your data for various reasons, then you get a discount,” Flemming continued.
If that's true, then AT&T's advertising should prominently say the "actual" cost of the service. They can advertise the "discounted" price just as prominently, but if there's any truth at all to what she's saying then it should be obvious from the marketing materials. Is it? If not, then it isn't a discount.
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Aaron Walkhouse (profile), 5 Apr 2016 @ 8:12am

Don't forget they're still mainlining the NSA's addiction to everyone's internet traffic. ‌ ;]
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Pixelation, 5 Apr 2016 @ 8:13am

Politician
Jacquelyne Flemming obviously rubs elbows with politicians. She's acting like one. How you ask? By telling everyone that something is the exact opposite of what it really is. And poof, we all feel soo much better about being shafted!
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Anonymous Coward, 5 Apr 2016 @ 8:16am

Re: State Actors
Funny how the only thing that really has to happen to change this is for somebody to say "no".

Apple shined a light, and the FBI scurried away. Perhaps the term "dark net" needs to be redefined. "dark net" in popular culture isn't really a network. (at least in OSI terms)

However out of band infrastructure used for surveillance certainly IS a real network. When we say "dark net" aren't we really talking about something more akin to room 641A? . Or in more modern terms, networks employing devices like this one on customer traffic without any kind of informed consent?

If nobody knows what a "dark net" is, which is apparent in the polling, then the meme is up in the air. It's probably easier to grasp the idea of network elements used for societal control, than it is to grasp the digitized crackhead street hussles that tend to actually be at the center of this term.

I think TD should try and hijack this term. Much like how marketers hijacked the term "modem" and "router" to describe things that don't modulate, or route. Turnabout is fair play after all.
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WDS (profile), 5 Apr 2016 @ 8:39am

Lost in Translation
Ms. Flemming needs to have someone carefully go over the difference between Opt-in and Opt-out.
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Dingledore the Flabberghaster, 5 Apr 2016 @ 8:46am

Just to be picky
but the article title is confusing to the point of being wrong.

AT&T aren't claiming that those paying more are receiving a discount. They're claiming that the opted-out fees are the normal price. The "discount", as they call it, is for users who don't opt out and who do, indeed, pay less.

I don't know what the rules are over in the US, but in the UK I think they'd be caught under our Trade Descriptions Act if they didn't advertise the standard price correctly.
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Anonymous Coward, 5 Apr 2016 @ 8:53am

They can snoop on that encrypted tunnel with Sandvine all they want. VPNs are much cheaper than AT&T's privacy offer.
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Anonymous Coward, 5 Apr 2016 @ 9:02am

Remember phone books?
...those white and yellow page books that had everybody's name, address, and phone number in them?

You had to pay extra to have your name, address, and phone number left out of these books.
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TruthHurts (profile), 5 Apr 2016 @ 9:14am

AT&T probably tested this with their employees first
I'm sure that like most big corporations, AT&T has tested a way to get their employees to pay more for their insurance benefits.

They couch it in terms of "if you give us federally protected health information, we'll give you a discount on your health insurance that still costs more than you ever paid before".

If you refuse to give up your health information, you pay even more for your benefits, in some cases that "increase" caused by "not getting the discount" equates to 300 a month more for the same substandard insurance plan.

This activity is tantamount to blackmail and coercion, to force employees to hand over data that is otherwise prohibited by federal law for companies to ask for.

They go one step further to "protect" themselves by asking an intermediary company to "collect, sort and analyze" the data.

It's time for multiple class action lawsuits for employees to sue their employers, customers to sue their service providers.

It's also time for the states AG's offices to dig into and block these kinds of blatantly illegal practices.
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Anonymous, 5 Apr 2016 @ 9:39am

My cheers for FCC trying to slap AT&T for this
On the surface this is matter of semantics.

1)
Regular price $70
Privacy surcharge +$30

vs.

2)
Regular price $100
Discount if you wave your privacy -$30.

However I strongly believe privacy should be your basic right, not a privilage you have to pay for.
When I pay ISP my money, I expect NOT to be a product myself for ISP to monetirize and sell to advertisers.
So 1) should be illegal.
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Jeremy Lyman (profile), 5 Apr 2016 @ 9:46am

Re: Just to be picky
Go ahead and take a gander at their website. There's no way they're advertising prices that are $30 higher than if you let them spy on you. You probably need an advanced degree in B.S. to interpret what they are advertising, but I don't see anything about a tracking credit.
Geographic and service restrictions apply to AT&T U-verse services. Call or go to att.com/u-verse to see if you qualify.
$35 U-verse® High Speed Internet Offer: Price for up to Pro (6Mbps) Internet after bill credit for new residential Internet customers. Requires another AT&T service (TV/Voice/Wireless) and combined billing on a single AT&T bill. After 12 months, then prevailing rate (currently up to $42) applies unless canceled by customer prior to end of promo period. 12 month term required. Prorated ETF ($180) applies if Internet is disconnected before end of term. Promo pricing applies to service rates only; excludes taxes, up to $99 install fee and a $7 monthly Internet equipment fee. Price includes 250GB of data per month. An additional $10 charge per 50GB of data usage in excess of your data plan applies. For more information, go to att.com/internet-usage. Offer ends April 13, 2016.
Internet speed claims represent the maximum network service capability speeds. Actual customer speeds may vary and are not guaranteed. Actual speeds vary based on factors including site traffic, content provider server capacity, internal network management factors, device capabilities, and the use of other U-verse services. For more information, go to att.com/speed101.
$100 Reward Card: For new residential U-verse customers with the minimum purchase of 768K Internet or higher. Offer ends April 13, 2016.
$100 Reward Card: For new residential U-verse customers with the minimum purchase of Voice 200. Offer ends April 13, 2016.
Online-Only Bonus $50 Reward Card: For new residential online orders only at att.com for purchase of 768K Internet or higher. One offer per service address. Offer ends April 13, 2016.
Reward Card redemption required. Reward Card delivered within 3–4 weeks after completion of your 30-day service requirement. Card expires at month-end, 3 months after issuance. No cash access. For cardholder agreement, go to rewardcenter.att.com/myreward/agreementFSV.pdf. Reward Card issued by U.S. Bank National Association, pursuant to license from Visa U.S.A. Inc.
All offers: Offers may not be combined with other promotional offers on the same services, and may be modified or discontinued at any time without notice. Other conditions apply to all offers.
©2016 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo, and all other AT&T marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. Subsidiaries and affiliates of AT&T Inc. provide products and services under the AT&T brand. All other trademarks are the property of their respective owners.
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Anonymous Coward, 5 Apr 2016 @ 10:17am

Oh, Frabjous Day!
I have two*, real, broadband ISP options and neither is Comcast or AT&T! [insert joyful chortle here]
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Isma'il, 5 Apr 2016 @ 11:28am

Re: Just to be picky
First of all, AT&T U-Verse is advertised as the standard rate. To opt-out of snoopvertising, one has to pay $30 more. Somewhat like a fuel station advertises the cash price in large font, then the credit card price (which is often 10+ cents/gallon more) in small font, even though recent credit card reforms state that fuel stations have to advertise the other way round (cash discounts).

Second, consumer protections here in the US are much weaker than in Europe. For any agency to respond, stat, to what AT&T is doing, AT&T would have to be doing something similar to holding your kids ransom until you pay the extra $30.
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Isma'il, 5 Apr 2016 @ 11:33am

Re: Oh, Frabjous Day!
You can be sure that, if AT&T and ComCrap continue to get their way, other ISPs will jump on the same bandwagon.

You're only as "safe" as to the extent revenue-aggressive ISP exec boards are, at this point.
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Anonymous Coward, 5 Apr 2016 @ 12:37pm

I wouldn’t say that
“That doesn’t mean that other people who don’t get the discount are paying for privacy. I wouldn’t say that,” she explained,

Of course she wouldn't say that. She's being paid not to.
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Anonymous Coward, 5 Apr 2016 @ 2:20pm

Wouldn't encryption and a trusted proxy be enough to stop the deep packet inspection?
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Anonymous Coward, 5 Apr 2016 @ 2:43pm

Re: Wouldn't encryption and a trusted proxy be enough
Yes. In fact even less would be enough to stop DPI. DPI is highly dependent on uniform datagram layout. Which is to say simply tunneling something like IPX or Appletalk over IP would probably queer DPI in most cases.

But this problem isn't a computer science problem. It is a "if the shit keeps going in this direction, people are going to start disappearing in the middle of the night" problem.

We are talking about the progressive domestic normalization of law enforcement practices, typically used by countries we once called "enemies of freedom".
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John Fenderson (profile), 5 Apr 2016 @ 3:29pm

Another disconnect
In the article, one of the people at the hearing complained about the expense of broadband, and this fascinating exchange happened:

Flemming responded, “So if there was an ad-supported service available to you that was cheaper, a different model of service — is that something that would seem reasonable to you?”

“If they’re ads that are based on using my information to target things to me,” she answered, “then no, I’d rather not have it.”

Flemming challenged, “So you’d rather have ads that are not relevant to you?”

But the woman in the audience enthusiastically responded, “Yes!”

I find this incredibly telling because it indicates how deep the disconnect between the purveryors of targeted advertising and normal people are.

Flemming actually expected that the answer to "would you rather have untargeted ads" to be "no". As if no other answer would make any sense.

These people clearly either completely fail to understand the problem, are trying their hardest to not understand the problem, or are just straight-up lying. It doesn't matter which of the three it is, the results are equally bad.
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Anonymous Coward, 5 Apr 2016 @ 3:36pm

Re: Re: Just to be picky
this is Suddenlink

Super-Fast Speeds
There is no one faster in the markets we serve. Speeds often start at 50 Mbps and are up to 1 Gb in select markets. Plus, our world-class technical team and 24/7 customer support ensures outstanding service. Pick the best plan for your needs.

I pay 35$ a month bundled (free cable w/rent) I get 50 Mbps
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limbodog (profile), 5 Apr 2016 @ 3:58pm

Gaslighting at its finest
If they can make you doubt your own sanity, they can get away with anything.
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Anonymous Coward, 5 Apr 2016 @ 4:41pm

Re:
I think a reliable VPN would be a much better option.
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Anonymous Coward, 5 Apr 2016 @ 8:40pm

Re: Re: Oh, Frabjous Day!
(OP reply) Maybe, but they ain't yet in my neck o' the woods.

I get uncapped DSL+ performance from one provider - I use that for Freenet (tuned to circa 250GB/month...I might kick that up).

I get uncapped Cable- performance from another provider - I use that for my cable-cutting approach to TV and music consuming habits (circa 150GB/month...I just don't need more, sorry).

The total charges for both is less than the AT&T charge reported here. It's about $10/month more that Comcast would charge for cable capped at 300GB in nearby neighborhoods.
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Anonymous Coward, 6 Apr 2016 @ 1:25am

Re: So which is it?
Maybe its only worth $5 to them. But f**k you, we're pricing it at 600% markup, because we can - that's what monopolies do.
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M. Alan Thomas II (profile), 6 Apr 2016 @ 2:52am

Re: My cheers for FCC trying to slap AT&T for this
1)
Regular price $70
Privacy surcharge +$30
In which case their exec lied in the speech.

2)
Regular price $100
Discount if you wave your privacy -$30
In which case their base rate went up and they're presumably lying in their advertising.
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Never Use AT&T, 6 Apr 2016 @ 8:41am

Shut this spying corporation down ALREADY
How about neveryone who had their private data sold or given to the government back in the days when the expectation of privacy by private citizens had not yet been trashed by this spy get together for a multi-class action law suit and finally shut this corporation down?
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The Wanderer (profile), 7 Apr 2016 @ 6:16am

I'm a little surprised no one in the comments seems to have explicitly called out this little bit of misleading and inappropriate language.
"We, AT&T, have a broadband Internet access service that we market to customers that if you agree, if you opt-in, to the use of your data for various reasons, then you get a discount,” Flemming continued.
"Opt-in" means that you have to choose it, as something other than the default.

If they're advertising the rate with the "discount" applied and this "service" active, rather than without, that seems to imply that the with-the-"discount" rate is the default - and thus that it is an opt-out, rather than an opt-in, scenario.

If someone who signs up for new service gets the with-the-discount rate and this "service" unless they go out of their way to request otherwise, that is definitely an opt-out scenario - especially if they don't get proactively asked, during the sign-up process, whether they want the "service".

If a customer who was subscribed before they began offering the "service" gets it and the "discount" automatically without being asked whether they want it, that is definitely an opt-out scenario.

To refer to it as "opt-in", if (as seems likely) any of those things is true, is highly misleading and an abuse of the language.
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brad, 8 May 2016 @ 9:58am

vocab
do you really need to use vulgar language like SOL to communicate?
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PAOK, 20 Dec 2017 @ 9:32pm

BY
Bolches y tibios yarboclos pa todos.
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