AT&T Lets Users Avoid Broadband Caps...If They Use AT&T's Own Streaming Service

from the net-neutrali-wha? dept

Fri, Dec 21st 2018 6:13am — Karl Bode

So we've long noted how broadband usage caps on fixed-line broadband connections are bullshit. While ISPs used to insist that such limits were necessary to manage "congestion," they've long since been forced to back off those justifications after analysis and their own internal documents showed this wasn't true. For giants like AT&T and Comcast, monthly broadband caps serve two purposes: one, they provide flimsy cover allowing ISPs to further raise rates on what are already some of the highest prices for broadband in the developed world. Two, they can be used anti-competitively to give themselves an unfair advantage.

Case in point: ISPs will often exempt their own services from these limits while still penalizing competitors like Netflix, something the former Wheeler FCC was just starting to crack down on as an anti-competitive practice before Trump and Ajit Pai rose to power. And this week, AT&T took another step toward using usage caps as a weapon when it began informing its broadband customers that they won't face usage caps -- if they're willing to subscribe to AT&T's own streaming services:

"[AT&T] is emailing their broadband customers to alert them they now qualify for unlimited internet access because they also happen to subscribe to DirecTV Now, AT&T’s streaming service targeting cord cutters...AT&T normally charges customers an extra $30 a month to remove their 1,000 GB data cap.

In other words, use Netflix's service? Get penalized and pay more. Use our own? Avoid any penalties. It's ironic, given I'd just written a piece over at The Verge this week highlighting most of the dirty tricks AT&T was likely to use as it slowly takes advantage of the death of net neutrality rules and the general lack of adult oversight at the FCC. Users in several online forums have confirmed the move. AT&T confirmed to me that this was a new policy, but wouldn't speak publicly on the record about it for what should probably be obvious reasons.

To clarify, AT&T applies a terabyte cap on most of its fixed-line broadband connections. Users can then pay AT&T an additional $30 per month to avoid this unnecessary limit. Previously, AT&T removed this cap if you bundled the company's traditional TV services. Now, it's removing the caps for free if you bundle AT&T's own streaming service, giving AT&T a pretty obvious leg up on competitors like Amazon, Netflix, or smaller streaming operators. And while many argue that a terabyte is generous, that ignores the fact these limits are unnecessary in the first place, or that these limits will start to feel tight once 4K streaming truly takes off.

Since there's limited competition in broadband, consumers who don't like these kinds of arbitrary limits and anti-competitive gamesmanship usually have no alternative ISPs to choose from. And of course that's always been the whole point: ISPs want to abuse a lack of competition to use their role as network operators to drive up rates and hamstring competitors. This agenda has always been painfully obvious; part of the reason informed consumers found the Ajit Pai FCC's attacks on net neutrality rules so myopic and obnoxious.

Given the FCC's landmark net neutrality vote just passed its one-year anniversary, I've seen more than a few dumb hot takes suggesting that because the internet didn't completely fall apart in the last year, the rules must not have meant much. But that (usually intentionally) ignores that most ISPs are trying hard to behave given next February's looming court challenge. It also ignores the fact that violations of net neutrality have always been a "death by a thousand cuts" sort of affair, where we increasingly say yes to tighter and tighter restrictions and idiotic anti-competitive caveats, only realizing what we've given up once it's too late.

Picture yourself, the consumer, as the frog in the boiling frog fable.

First the public gets used to unnecessary usage caps and overage fees. Then, the public gets used to usage caps only applying to ISP competitors. From there, you accept additional unnecessary restrictions like HD video not working properly on your "unlimited" data plan unless you pony up more cash. Individually it's pretty easy to dismiss these moves one at a time (and many clearly do), but it shouldn't be hard to see that eventually, you wind up with a decidedly tilted playing field, made worse by an Ajit Pai FCC whose interests pretty clearly exclusively rests with helping these entrenched mono/duopolies make more money, not consumer welfare, sustaining competition, or protecting the health of the internet.

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Filed Under: broadband, broadband caps, competition, data caps, directv, fees, streaming, zero rating
Companies: at&t, directv, netflix

32 Comments

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Anonymous Coward, 21 Dec 2018 @ 6:18am

What is to stop the carrying out further bundling, like excluding Netflix at.al from unlimited, and bundling them with a premium cable package?
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Stephen T. Stone (profile), 21 Dec 2018 @ 6:35am

Re:
Absolutely nothing.
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Toom1275 (profile), 21 Dec 2018 @ 6:43am

Think those "ISPs ain't done nothin' bad without NN" boiled frogs will notice this?
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Anonymous Coward, 21 Dec 2018 @ 6:48am

Re: Re:
And if anyone thinks they aren't eyeing doing exactly that at some point in the future, effectively turning internet access into a mess of "cable bundles", they aren't living in reality.
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Toom1275 (profile), 21 Dec 2018 @ 6:49am

Remember, At$t's end-run around competition here is the "free market" the "deregulate everything" crowd wants.
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Anonymous Coward, 21 Dec 2018 @ 7:04am

So it was meme'd,
so it shall be done.

What was once satirical has become reality.
The patients are running the asylum.
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Anonymous Coward, 21 Dec 2018 @ 7:16am

Comcast was doing this back before Net Neutrality was repealed. And they got away with it, because the Net Neutrality rules were crap. They needed to be repealed, but needed to be replaced by something with teeth, that they can enforce. There was too many loop holes in the previous rules that they were meaningless.

Comcast did was to claim their streaming service "isn't really streaming over internet since it stayed on their network the whole time", it didn't count against the bandwidth caps. Of course Hulu and Netflix would.
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Anonymous Coward, 21 Dec 2018 @ 7:24am

There could be some valid reasons for such a policy. If AT&T keeps its in-house content on local servers to distribute to its customers, there's an obvious cost and logistics advantage compared to having to stream Netflix content all the way across the country. That was a big reason why Usenet was set up the way it was, as a completely decentralized system with multiple redundant local servers.
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Fremont, 21 Dec 2018 @ 7:25am

broaden regulation
why just continuously moan and groan about ISP's (?)

Simply broaden existing Federal regulation and nationalize the major ISP's -- the Federal government can then ensure excellent broadband service at fair prices.
There's no downside for American consumers -- it's a Win-Win solution
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Anonymous Coward, 21 Dec 2018 @ 7:28am

Nothing to do with net neutrality
This seems to be a clever end-run around net neutrality. I'm not aware of any neutrality rule that would prohibit it. AT&T's network treats the Netflix and AT&T streaming services exactly the same, but AT&T's comes with a "free" upgrade (a $30/month value). The upgrade happens to apply to Netflix traffic as well, but would you really subscribe to Netflix if you already had AT&T's?

Netflix could give each subscriber $30/month to get the cap removed—and then go bankrupt, because they don't charge that much, which suggests that "AT&T Streaming" isn't giving "AT&T Wireline" $30/month either. It's a great example of why we need functional separation, or even robust anti-trust enforcement: they're obviously using their wireline clout to give an unfair advantage to their streaming service.
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Anonymous Coward, 21 Dec 2018 @ 7:47am

Re:
Real life example as to how the market is not self regulating. They had their opportunity and chose greed.
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Anonymous Coward, 21 Dec 2018 @ 7:48am

Re:
Perhaps the point has eluded your perception.
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Anonymous Coward, 21 Dec 2018 @ 7:49am

Re: broaden regulation
What a horrible idea. Is this another stupid Russian suggestion?
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Anonymous Coward, 21 Dec 2018 @ 7:49am

Re: broaden regulation
It would work if we didn't already have regulatory capture where the companies like AT&T are literally controlling the FCC through puppets like Pai. It doesn't matter how tough you make the laws if the companies can bribe their way out of them.
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Anonymous Coward, 21 Dec 2018 @ 7:50am

Re: Nothing to do with net neutrality
You apparently do not understand the concept of net neutrality.
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This comment has been flagged by the community. Click here to show it

Fremont, 21 Dec 2018 @ 8:06am

Re: Re: broaden regulation
--- "It would work if we didn't already have regulatory capture"

... but "Regulatory Capture" did not reduce the enthusiasm here for Net Neutrality regulation -- so most people do not think regulatory capture is any big problem with ISP's.
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Anonymous Coward, 21 Dec 2018 @ 8:10am

Good luck with unlimited internet at 5 MB/s
You can have all the internet you want at the slow pace of 5 MB/s dsl. I used to have them and we couldn't get 2 streams of youtube going without affecting quality on SlingTV, which is similar to Directvnow.
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Anonymous Coward, 21 Dec 2018 @ 8:25am

Re:

If AT&T keeps its in-house content on local servers to distribute to its customers, there's an obvious cost and logistics advantage compared to having to stream Netflix content

Netflix will give free servers to ISPs to do the same thing.
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Anonymous Coward, 21 Dec 2018 @ 8:35am

Re: Re: broaden regulation
Not everything you don't like is Russian....
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Thad (profile), 21 Dec 2018 @ 8:52am

Re: Re: Re: broaden regulation
Search results for fcc "regulatory capture" site:techdirt.com
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Valkor, 21 Dec 2018 @ 8:58am

Re: Re:
The market is only self regulating if competition is enforced.
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Anonymous Coward, 21 Dec 2018 @ 9:15am

Re: Re: Re: broaden regulation
"most people do not think regulatory capture is any big problem with ISP's."

Bullshit
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Aaron Walkhouse (profile), 21 Dec 2018 @ 10:31am

Re: Re: Re: broaden regulation
True, but they're not listening to the Chinese this year. ‌ ‌ ‌ ; ]
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Anonymous Coward, 21 Dec 2018 @ 11:08am

Re: Re: Re:
It is never self regulating as it is run by humans.
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Anonymous Coward, 21 Dec 2018 @ 11:11am

Re: Good luck with unlimited internet at 5 MB/s
Was there a point to be made?
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Anonymous Coward, 21 Dec 2018 @ 12:00pm

Re: Re: Good luck with unlimited internet at 5 MB/s
Well, if they are making you sign up for Directvnow, all your internet bandwidth would be used for that, and you won't be able to do anything else.
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That One Guy (profile), 21 Dec 2018 @ 1:48pm

Re:
ISPs will often exempt their own services from these limits while still penalizing competitors like Netflix, something the former Wheeler FCC was just starting to crack down on as an anti-competitive practice before Trump and Ajit Pai rose to power.

The rules certainly had problems(no zero rating ban for one), but the biggest problem with them wasn't so much what was in them(what was there was good, if not going far enough) but enforcement. Wheeler was starting to crack down before he was replaced, at which point Pai basically tossed them out the door in his mad rush to give the ISP's everything they could think of.
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Anonny, 21 Dec 2018 @ 4:17pm

I'm calling it now...
The Feb lawsuit fails. $5 says AT&T knows, or has a high degree of confidence in winning February's NN lawsuit. It is so bold enough to do this now, it must have a reason to be so bold.

Where that confidence comes from is not clear (to me at least). But the actions here are indicative that AT&T must have a reason to feel confident enough to pull this sh*t. It’s essentially zero rating. On the eve of the lawsuit.

So, to me, this is an indicator that Feb’s lawsuit will fail.
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Anonymous Coward, 22 Dec 2018 @ 8:28am

Re: Re: Re: Re: broaden regulation
That's all we need
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Anonymous Coward, 26 Dec 2018 @ 4:18pm

as a former FORCED customer of centurylink I can personally confirm this: centurylink is also guilty of this practice.

It was added to the terms of service when they took over qwest Which I had a locked contract with If I stayed with them for extended time.

But my unlimited contract was essentially voided, by this clause about use of their streaming service and caps.
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Sean, 19 Jan 2019 @ 11:41pm

Re: Re: Re: Good luck with unlimited internet at 5 MB/s
Depends on where you live. I get 100 Mbps down 20 Mbps up VDSL2 from AT&T. Some areas have 1 Gbps fiber. And yes some are still stuck at 3 to 6 Mbps ADSL

For me with 100/20 this unlimited perk is a big plus for DTV Now since we are switching to streaming TV service next month.
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Scott, 20 May 2019 @ 3:38pm

Not true
This is apparently a limited promotion ONLY for SOME existing customers.

If you subscribe to DirecTVNow as a new customer, you don't get unlimited data without paying an extra $30.

If you previously had DirecTV bundled with internet, you lose your free unlimited data when switching to DirecTV Now.
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