stories about: "at&t"

FCC Approves AT&T's $69 Billion DirecTV Merger, Announces It Late Friday And Hopes Nobody Notices

from the lava-is-in-the-public-interest dept

Fri, Jul 24th 2015 1:51pm — Karl Bode

Waiting until late Friday afternoon to minimize public and press backlash, the FCC has formally announced that it has voted to approve AT&T's $69 billion acquisition of DirecTV, creating the nation's biggest ever pay TV provider at 27 million subscribers strong. According to the FCC statement, the agency found that the deal, despite the fact it eliminates a direct pay TV competitor, somehow serves the public interest:

"The Commission’s decision is based on a careful, thorough review of the record, which includes extensive economic analysis and documentary data from the applicants, as well as comments from interested parties. Based on this review, the Commission has determined that granting the application, subject to certain conditions, is in the public interest."

It will be curious to see if the DirecTV employees trimmed by AT&T's garden shears as the telco eliminates "redundancies" will feel the same way. Or if the DirecTV customers who'll suddenly face higher TV prices thanks to less direct pay TV price competition feel their interests have been well looked after by this time next year. Only time will illuminate the magical public interest benefits of the deal, since they're not entirely apparent at the moment.

As we noted previously, the temporary conditions attached to the deal appear to be wimpy at best. One condition prevents AT&T from abusing its fixed-line usage caps anti-competitively, but the agency doesn't bother to note that AT&T doesn't have usage caps on the majority of its U-Verse broadband lines, and has no plans to implement them. AT&T's focus, and the current controversy as it pertains to AT&T's use of caps to trample net neutrality, is on wireless, which these conditions wouldn't apply to.

Another condition states that AT&T has to submit any new interconnection agreements to the FCC for review to ensure it's not behaving anti-competitively, but this was already effectively part of the FCC's new net neutrality protections. Thanks to the mere threat of neutrality rules, AT&T was already on its very best behavior in regard to interconnection. Granted AT&T is engaged in two different lawsuits to kill these rules, so at least there's something in place to police interconnection should the neutrality rules get defeated in court. But AT&T promising to avoid interconnection jackassery for a few years is hardly a groundbreaking commitment.

But it's this part of the FCC's statement I find the most misleading:

"Recognizing that the merger reduces AT&T-DIRECTV’s incentive to deploy FTTP service, the Commission adopts as a condition of this merger the expansion of FTTP service to 12.5 million customer locations. This condition also responds to the harm of the loss of a video competitor in areas where AT&T and DIRECTV had directly competed before the merger by providing a pathway for increased competition from services that rely on broadband Internet to deliver video."

One, what good is an expanded "pathway" to Internet video competition if said pathway wanders straight through a monopoly mine field on last mile broadband service? Two, as we noted previously, AT&T and the FCC are being incredibly misleading on this 12.5 million deployment total. A month before the DirecTV deal was even announced, AT&T promised to expand its fiber broadband service (mostly aimed at high-end developments) to "up to" parts of 100 cities. When pressed, AT&T in filings conceded this project, primarily aimed at countering Google Fiber's buzz, would likely bring service to around 11.7 million users. So in short, the lion's share of the 12.5 million total isn't new commitment, it's deployments that were already planned (and in some cases already finished) being dressed up as only having been made possible by the magic of a mega-merger.

So why did an FCC on a bit of a pro-consumer tear approve this deal? It's likely because the FCC knows in time AT&T's acquisition of a satellite TV provider will be made wholly irrelevant by a surge in Internet video competition and cord cutting. The FCC's been engaged in a fierce battle with the broadband industry over net neutrality, a new 25 Mbps definition for broadband, and municipal broadband, so approving this deal was one way to throw the broadband industry a few crumbs with the least amount of market damage. The FCC's likely just picking its battles after having just fought a protracted war.

That said, the short-term harm from effectively killing a pay TV competitor will be felt by TV subscribers and employees alike. And the fact the FCC was so eager to swallow and sell AT&T's miracle math suggests that the FCC hasn't entirely discarded old habits just yet.

Filed Under: competition, fcc, merger, satellite, spectrum, tv
Companies: at&t, directv

11 Comments

AT&T's Version Of Wireless Price Competition: Raising Prices

Wireless

from the that's-not-how-this-works dept

Fri, Jul 24th 2015 10:38am — Karl Bode

There's no doubt that T-Mobile and its smack-talking CEO have been good for the wireless industry, applying pressure on a lot of customer pain points like subsidized devices, international roaming, and long-term contracts and early termination fees. As a result, T-Mobile's been adding more new subscribers than any of the other three major carriers. But as I've noted a few times now, the pricing response to this competition by companies like AT&T and Verizon has been a bit cosmetic and theatrical in nature, since none of the carriers want a real wireless price war.

Sure, there are some occasionally decent promotions but, by and large, the name of the game right now for both AT&T and Verizon is driving network usage and shoving customers as hard as possible toward large, expensive, shared data allotments. Verizon has pretty loudly stated it's not going to seriously compete on price because it believes its network is just that good. The latest example of not-really-price competition comes courtesy of AT&T, who is responding to T-Mobile's competitive pressure by... raising fees and creating entirely new annoying surcharges:

The new activation/upgrade fee for one and two-year agreements is raising from $40 to $45, which gives AT&T the highest activation fee in the industry (Verizon is still at $40 for now). Going forward after August 1, should you choose to sign-up for a new contract to receive a discounted phone, you will pay $5 more than you used to.

In related news, AT&T Next will no longer be a zero-out-of-pocket installment plan. Come August 1, customers who are new to AT&T Next will have to pay a $15 activation fee when they pick up a new phone. This $15 fee also applies to those who bring their own device (BYOD) and sign-up for a new line of service.

So yeah, AT&T's response to price competition is -- to raise prices. And its response to media inquiries so far as to why this is occurring has been total radio silence, since there's not much it could say to defend the practice. Perhaps that's the reason that while T-Mobile is seeing notable growth, AT&T actually lost phone customers last quarter?

There are still a few reasons why AT&T doesn't really have to care what you or the media thinks. One, the company's mammoth lobbying apparatus ensures it still gets favorable treatment, especially on the easily manhandled state level, where most legislators would happily sell their first born to win the company's affections. Two, AT&T still has a stranglehold over a huge swath of wireless spectrum thanks to auction rules that historically favored large companies (though that's changing... slowly). Three, AT&T and Verizon combined still control around 80% or more of the wireless backhaul special access market, which companies like T-Mobile need to pay to access in order to reach their customers.

Of course hammering customers with a bevy of annoying fees is pretty much standard operating procedure in most industries as a way to pretend your advertised rate is staying the same. But AT&T's latest greedy little cash grab is worth remembering the next time industry trade groups like the CTIA are breathlessly insisting that fierce competition is delivering a bonanza of broadband bargains. There is no "wireless price war." It's more of a theatrical pricing improvisational dance.

Filed Under: competition, mobile phones, prices, wireless
Companies: at&t

6 Comments

FCC Signs Off on AT&T DirecTV Merger, And Early Indications Are The Conditions Are Hot Garbage

Broadband

from the AT&T's-magic-math dept

Wed, Jul 22nd 2015 12:39pm — Karl Bode

While Comcast's failed merger attempt with Time Warner Cable received a well-deserved media and public beating, AT&T's almost-as-bad $49 billion acquisition of DirecTV has been able to largely fly under the radar, despite the fact that only the latter eliminates a direct pay TV competitor. With less public pressure from consumer outrage, the FCC and DOJ appear poised to approve AT&T's deal, and the FCC is circulating an order approving the deal among the agency's Commissioners. Approval could occur as soon as this week.

In a statement issued to the FCC website, FCC boss Tom Wheeler states he's pushing for several conditions on the deal he claims will "protect consumers, expand high-speed broadband availability, and increase competition." One of them involves restricting AT&T from using its fixed-line usage caps for anti-competitive advantage:

"In addition, the conditions will build on the Open Internet Order already in effect, addressing two merger-specific issues. First, in order to prevent discrimination against online video competition, AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections."

The problem? While AT&T's DSL users do face a 150 GB monthly usage cap (with $10 per 50 GB overage fees), AT&T's busy kicking these unwanted customers to the curb because they're too expensive to upgrade. On the other hand AT&T's U-Verse customers, the ones AT&T plans on keeping, don't face an enforced usage cap. As such, a condition preventing them from abusing this non-existent cap isn't much of a condition. Most of AT&T's controversial "zero rating" practices in regards to usage caps are happening on AT&T's wireless network, which the condition wouldn't apply to.

Wheeler's also promising that his conditions will force AT&T to deploy upgraded broadband services to more areas than ever before:

"If the conditions are approved by my colleagues, 12.5 million customer locations will have access to a competitive high-speed fiber connection. This additional build-out is about 10 times the size of AT&T’s current fiber-to-the-premise deployment, increases the entire nation’s residential fiber build by more than 40 percent, and more than triples the number of metropolitan areas AT&T has announced plans to serve.

The problem here is that AT&T's been manipulating its broadband deployment statistics for fifteen years or so to win regulatory favor. The company will take deployments already planned (or in some cases built), pretend these users are new deployments, then promise regulators it will engage in a broadband "expansion" if regulators only agree to "X" (deregulation, more subsidies, more tax breaks, merger approval, whatever). Nobody in DC has ever bothered to actually audit AT&T's endlessly shifting deployment projections, or even call them on the statistical slight of hand.

And AT&T appears to be doing that again here. With the FCC's help.

Back on April 21st, 2014 -- a month before the deal with DirecTV was even struck -- AT&T announced a shiny new PR campaign (designed to counter Google Fiber's buzz) proclaiming the company would be bringing fiber to "up to" 100 cities. These are cherry picked installs, mostly high-end developments, where install costs are already low because fiber's already in the ground. You might recall that AT&T then pouted and threatened to pull these limited upgrades if net neutrality rules were passed. When pressed by the FCC, AT&T backed down on the threat.

But in a highly-redacted June response to the FCC (pdf), AT&T states that the company is promising to deploy fiber broadband to a total 11.7 million homes (this includes the April 2014 plans) should the merger be approved, with only 2 million of this total being actual, new deployment. So only a fraction of this 12.5 million number Wheeler is using is "new" at all, and it's certainly nowhere near "10 times" the size of AT&T's current deployment. The tl:dr version is that AT&T's taking existing (and in some cases finished) deployments, pretending they're totally new deployments only made possible by the DirecTV merger, and the FCC's helping them.

The real irony is that AT&T's actually cutting fixed-line investment CAPEX so it can focus on more-profitable capped wireless, and in the process preparing to hang up on tens of millions of unwanted DSL users. This is going to leave cable with an even stronger monopoly than ever before across a huge swath of the country, and few people in the press, public or in government appear to have noticed or care. Instead, we get a mega merger bloated with AT&T's miracle math.

I think the majority FCC is ok with AT&T's merger because buying a satellite TV provider on the eve of the Internet TV revolution is basically business seppuku, ultimately made irrelevant by the rise of alternative options. But the elimination of a direct competitor still means higher rates in the short term, and there's an awful lot of actual fiber that $49 billion could help deploy. There's little to no hard consumer benefits here, and as usual AT&T lawyers are doing a bang up job manufacturing some out of very thin air (while filing two lawsuits against the FCC's net neutrality rules to ensure nobody can police their behavior after the merger conditions expire).

Note the FCC hasn't released the full details of the conditions, so hopefully there's more teeth here than Wheeler's original announcement suggests. But his willingness to buy into AT&T's magic, meandering math isn't a promising start.

Filed Under: broadband, conditions, fcc, satellite, tom wheeler, tv
Companies: at&t, directv

23 Comments

How States Are Fighting To Keep Towns From Offering Their Own Broadband

Broadband

from the lobbying-dollars-at-work dept

Thu, Jul 2nd 2015 7:25am — Leticia Miranda, ProPublica

Earlier this year, the Federal Communications Commission voted to ease the way for cities to become Internet service providers. So-called municipal broadband is already a reality in a few towns, often providing Internet access and faster service to rural communities that cable companies don't serve.

The cable and telecommunications industry have long lobbied against city-run broadband, arguing that taxpayer money should not fund potential competitors to private companies.

The telecom companies have what may seem like an unlikely ally: states. Roughly 20 states have restrictions against municipal broadband.

And the attorneys general in North Carolina and Tennessee have recently filed lawsuits in an attempt to overrule the FCC and block towns in these states from expanding publicly funded Internet service.

North Carolina's attorney general argued in a suit filed in May that the "FCC unlawfully inserted itself between the State and the State's political subdivisions." Tennessee's attorney general filed a similar suit in March.

Tennessee has hired one of the country's largest telecom lobbying and law firms, Wiley Rein, to represent the state in its suit. The firm, founded by a former FCC chairman, has represented AT&T, Verizon and Qwest, among others.

James Tierney, director of the National State Attorneys General Program at Columbia Law School, said it is not unusual for attorneys general to seek outside counsel for specialized cases that they view as a priority.

Asked about the suit, the Tennessee attorney general's office told ProPublica, "This is a question of the state's sovereign ability to define the role of its local governmental units." North Carolina Attorney General's office said in a statement that the "legal defense of state laws by the Attorney General's office is a statutory requirement."

As the New York Times detailed last year, state attorneys general have become a major target of corporate lobbyists and contributors including AT&T, Comcast and T-Mobile.

North Carolina is no exception. The state's Attorney General Roy Cooper received roughly $35,000 from the telecommunications industry in his 2012 run for office. Only the state's retail industry gave more.

The donations are just a small part of contributions the industry has made in the states. In North Carolina's 2014 elections, the telecommunications industry gave a combined $870,000 to candidates in both parties, which made it one of the top industries to contribute that year. Candidates in Tennessee received nearly $921,000 from AT&T and other industry players in 2014.

The FCC's decision came after two towns – City of Wilson in North Carolina and Chattanooga in Tennessee – appealed to the agency to be able to expand their networks.

The vote has rattled some companies. In a government filing earlier this year, Comcast cited the FCC's decision as a risk to the company's business: "Any changes to the regulatory framework applicable to any of our services or businesses could have a negative impact on our businesses and results of operations."

If the court upholds the FCC's authority to preempt restrictions in North Carolina and Tennessee, it may embolden other cities to file petitions with the agency, according to lawyer Jim Baller, who represents Wilson and the Chattanooga Electric Power Board. "A victory by the FCC would be a very welcome result for many communities across America," said Baller.

For some residents in and outside of Chattanooga, clearing the way to city-run broadband would mean the sort of faster Internet access that others might take for granted.

For 12 years, Eva VanHook, 39, of Georgetown, Tennessee, lived with a satellite broadband connection so slow that she'd read a book while waiting for a web page to load. In order for her son to access online materials for his school assignments, she'd drive him 12 miles to their church parking lot, where he could access faster WiFi.

Charter, the local Internet service provider, declined several requests by her husband to build lines out to her home. Only last month did Charter connect her home to the Internet. "Even the possibility to jump on [the local utility's] gigabit network would blow our minds right now," VanHook said. "There is nothing faster than Chattanooga. Just through meeting them and hearing them speak and having them understand what's going on, that's the kind of place I want to do business."

Republished from ProPublica.

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Filed Under: broadband, fcc, isps, lobbying, municipal broadband, north carolina, states, tennessee
Companies: at&t, verizon, wiley rein

23 Comments

No, We Still Can't Definitively Prove Your ISP Is Slowing Netflix Traffic To Make An Extra Buck

Broadband

from the network-shenanigans dept

Wed, Jun 24th 2015 1:35pm — Karl Bode

While filing a net neutrality complaint is now easier than ever, actually identifying violations may not be. In the new age of interconnection, usage caps, overages, and pay-to-play zero rating deals, less technical users simply may not understand when they're being screwed by their ISP, as these violations aren't nearly as ham-fistedly obvious as outright blocking or throttling of services. That's why the Open Technology Institute’s MLAB recently introduced the Internet health test, which runs user connections through a bevy of speed and performance tests to determine whether or not ISPs are engaged in any shenanigans.

Last October, MLAB released a study (pdf) that strongly supported Netflix, Level3 and Cogent's claims that ISPs were intentionally letting peering points to transit operators saturate to try and force companies like Netflix to begin paying for direct interconnection. In short, neutrality advocates believe ISPs had moved net neutrality to the edge of the network, using interconnection to grab the pound of flesh from content companies they've long stated was their end goal.

The problem is both sides of the equation (whether that's Netflix or AT&T) keep most of their data on interconnection (and the deals they strike) private for competitive reasons, meaning that while signs (and thirty years of history) pointed to ISP skulduggery, actually proving it is difficult. It's apparently becoming less difficult with the new consumer connection data being collected by MLAB, which the Guardian this week claimed proves big ISPs are intentionally degrading network performance across some networks:

"The study, conducted by internet activists BattlefortheNet, looked at the results from 300,000 internet users and found significant degradations on the networks of the five largest internet service providers (ISPs), representing 75% of all wireline households across the US...In Atlanta, for example, Comcast provided hourly median download speeds over a CDN called GTT of 21.4 megabits per second at 7pm throughout the month of May. AT&T provided speeds over the same network of ⅕ of a megabit per second. When a network sends more than twice the traffic it receives, that network is required by AT&T to pay for the privilege."

This is, consumer advocate group Free Press claims, proof positive that ISPs are up to no good:

"For too long, internet access providers and their lobbyists have characterized net neutrality protections as a solution in search of a problem,” said Karr. “Data compiled using the Internet Health Test show us otherwise – that there is widespread and systemic abuse across the network. The irony is that this trove of evidence is becoming public just as many in Congress are trying to strip away the open internet protections that would prevent such bad behavior."

The problem? While the Guardian report references a "new study," no study has actually been released that I could find (MLAB apparently just shared some selective data with The Guardian). That brings us back to the fact that the biggest problem here continues to be a lack of transparency on the part of all the players involved. But it's pretty hard to claim a "study" proves much of anything when there's no actual study, suggesting some over-eagerness on the parts of consumer advocates here.

Shortly after the Guardian piece MLABS did post a blog entry that sheds a little more light on the data they're collecting, but it's worth noting that while MLAB engineers are confident in saying these slowdowns are due to business choices and not network capacity, they're not yet willing to definitively state why some transit routes suffer more than others:

"It is important to note that while we are able to observe and record these episodes of performance degradation, nothing in the data allows us to draw conclusions about who is responsible for the performance degradation. We leave determining the underlying cause of the degradation to others, and focus solely on the data, which tells us about consumer conditions irrespective of cause."

If you're interested, all the data MLAB is collecting has been released publicly and is available through the telescope program, which can be used to pull down and analyze subsets of the data.

Still, despite some of the breathless rhetoric in the Guardian piece neutrality advocates still haven't obtained the AT&T lawyer proof silver bullet that indisputably proves large ISPs have been up to no good. I'm not entirely sure this can even be accomplished without access to raw, confidential ISP data and internal correspondence that may or may not even exist (how do you "prove" Verizon intentionally isn't upgrading a port?). Sure, most people can study AT&T and Verizon's behavior over the last thirty years and conclude that yes, this sort of thing would certainly be in their jackassery wheelhouse, but proving it is kind of important if you want these kinds of claims to be taken seriously.

Still, the fact that people are crunching and closely analyzing the data, combined with the new and novel threat of a regulator that's not asleep at the wheel, appears to have many of these companies magically and suddenly getting along famously. This suggests, contrary to broadband industry doomsday prognostications, that the net neutrality rules are having a positive impact on consumers, business interests, and the Internet at large.

Filed Under: broadband, interconnection, isps, net neutrality, studies, throttling, transparency
Companies: at&t, cogent, comcast, level3, m-lab, netflix, time warner cable, verizon

8 Comments

FCC Moves To Fine AT&T $100 Million For Throttling 'Unlimited' Plan Users

Wireless

from the who-are-you-and-what-have-you-done-with-my-regular-at&t? dept

Wed, Jun 17th 2015 12:40pm — Mike Masnick

This new FCC is really quite interesting. After years and years of never actually doing anything to push back against anti-consumer policies by the big telcos, in the last few months it seems like that's all the FCC does. Today's move? Proposing a $100 million fine against AT&T for its bogus practice of throttling "unlimited" customers. As you may recall, AT&T offered "unlimited" mobile data connections, but eventually killed off that offering. To avoid getting in trouble for bait and switch, AT&T grandfathered in those who previously had the unlimited plan... but then started throttling those accounts to try to pressure people into moving to a different plan. The FTC is already suing AT&T over this, and just last month we noted that AT&T had made some changes in response to FCC pressure.

However, this new move by the FCC is a big one -- saying that it thinks the company's throttling practice flat out broke the old open internet rules (the transparency part of the rules -- which the court did not throw out). AT&T, as it's doing with the FTC case, has already indicated that it's going to fight this fine, so expect years to go by before any fine is actually paid. The full FCC notice is worth a read. The key point is pretty basic: don't call it unlimited when it's very, very limited:

The imposition of set data thresholds and speed reductions is antithetical to the term “unlimited.” AT&T was aware that its continued use of the word unlimited to describe its data plans was likely to mislead consumers, as evidenced by the focus group studies conducted by AT&T around the time the Company implemented its MBR [maximum bit rate] policy. Further, since its MBR policy was implemented, the Commission and the Company itself received many complaints from AT&T unlimited data plan customers who felt misled about the services they expected to receive when they purchased unlimited data plans.

We find that AT&T’s use of the term “unlimited” to label plans that were, in fact, subject to significant speed restrictions after subscribers used a specific amount of data is apparently inaccurate and misleading to consumers. As evidenced by the many complaints we have received about the MBR policy, consumers entered into contracts for these “unlimited” plans with the mistaken belief that they had unlimited amounts of high speed data sufficient to use any website or application, regardless of how much data they used in a month. We thus conclude that every time AT&T described such a plan to a customer as “unlimited,” it misrepresented the nature of its service. It did so in every monthly billing statement for an unlimited plan and every time a term contract for an unlimited plan was renewed. The Transparency Rule requires accuracy in all statements regarding broadband provider’s network management practices, performance, and commercial terms, and providers are prohibited from “making assertions about their service that contain errors, are inconsistent with the provider’s disclosure statement, or are misleading or deceptive.”

We further find that AT&T’s apparently misleading use of the term “unlimited” to label its plan impeded competition because it prevented consumers from fully comparing AT&T’s plan to other similar plans. This inured to AT&T’s benefit and to the disadvantage of its competitors. While AT&T describes its plan as “unlimited,” its competitors describe almost identical plans as offering “unlimited talk and text” with a set amount of LTE data. Without adequate disclosures, the average consumer would consider these plans to be significantly different, when in fact they are not. A consumer was likely to mistakenly assume that the AT&T “unlimited” plan offers more high-speed data than the competing plan, thus hindering fair competition between AT&T and its competitors. Continuing to offer the plan to renewing customers under the original “unlimited” label falsely advertised that the data plan was the same plan customers originally bought before the MBR policy was implemented.

You can also read FCC Commissioner Ajit Pai's dissent in which he (really) quotes Kafka's The Trial and claims that the FCC is changing the rules as it goes.

A government "rule" suddenly revised, yet retroactive. Inconvenient facts ignored. A business practice sanctioned after years of implied approval. A penalty conjured from the executioner’s imagination. These and more Kafkaesque badges adorn this Notice of Apparent Liability (NAL), in which the Federal Communications Commission seeks to impose a $100 million fine against AT&T for failing to comply with the apparently opaque “transparency” rule the FCC adopted in its 2010 Net Neutrality Order. In particular, the NAL alleges that AT&T failed to disclose that unlimited-data-plan customers could have their data speeds reduced temporarily as part of the company’s approach to managing network congestion.

Because the Commission simply ignores many of the disclosures AT&T made; because it refuses to grapple with the few disclosures it does acknowledge; because it essentially rewrites the transparency rule ex post by imposing specific requirements found nowhere in the 2010 Net Neutrality Order; because it disregards specific language in that order and related precedents that condone AT&T’s conduct; because the penalty assessed is drawn out of thin air; in short, because the justice dispensed here condemns a private actor not only in innocence but also in ignorance, I dissent.

Pai points out that AT&T did put out a number of warnings that its plan might include reduced speeds... but it still called the plans unlimited.

Either way, this should keep plenty of telco lawyers employed for many years...

Filed Under: fcc, throttling, unlimited
Companies: at&t

AT&T Explores Giving Away Free Wireless Data If Users 'Interact' With Brand Partners

Wireless

from the well-look-at-that dept

Mon, Jun 15th 2015 2:40pm — Karl Bode

For a few years now AT&T has taken heat for its "Sponsored Data" program, which lets certain companies pay AT&T an extra fee to let consumers access their content without it impacting their wireless data usage allotment. Critics have repeatedly charged that the program immediately creates an uneven playing field for small companies, independent and non-profits, who may not be able to afford the toll. While it's clear the plan violates net neutrality, consumers have been fortunate in that corporate interest in the idea so far appears to be minimal.

In an interesting twist, AT&T appears to now be cooking up a new program called "Data Perks" that gives consumers free, additional wireless data should they "interact" with AT&T partner brands in a specific fashion. Leaked information on the program suggests it's being run by AT&T's Sponsored Data partner Aquto, who explains AT&T's new project as such:

"Aquto CEO Susie Riley told VentureBeat that to many brands it’s a lead generation campaign. Subscribers are rewarded with data when they sign up for services, learn about new products, discover new apps, or click through and purchase something at a brand’s e-commerce site. If for example, an AT&T customer bought a DVD from a participating brand, they might be awarded with a gigabyte of data that they could use to browse any site, anywhere on the web, Riley said. Subscribers accumulate their data credits in their Data Perks account, then transfer the data into their AT&T wireless account when they want."

So far that sounds more neutrality friendly than the company's Sponsored Data effort, as it's opt in and doesn't tilt the mobile Internet playing field in any obvious fashion. Of course this is AT&T -- the same company that's been busted time and time again for business models that trample neutrality and consumer rights -- so we'll have to see if there's any nasty caveats when the program launches next Tuesday. AT&T might be engaging in semantics here (exempting some content from the cap, versus giving away "free" data if users "interact" with a brand). With the FCC's new net neutrality rules taking effect this week (you know, the ones AT&T is suing twice to overturn), it seems possible that AT&T would tread carefully

Maybe.

While the FCC's new neutrality rules don't cover data caps and zero rating specifically, when they take effect on Friday there is at least a complaint mechanism for those who find a specific business model obviously anti-competitive. As such, ISPs can still violate neutrality, but as noted previously, they just have to be extra-clever about it, dressing it up as an innovative business model and a great boon for consumers (see T-Mobile's Music Freedom). We'll see next week if AT&T's actually developing a sound business model for once -- or if it's just being extra clever.

Filed Under: advertisements, brands, interact, net neutrality, sponsored data
Companies: at&t

9 Comments

Dish Eyes T-Mobile Takeover, And That Could Be A Very Good Thing For Wireless Competition

Wireless

from the bigger-sometimes-is-better dept

Fri, Jun 5th 2015 4:25am — Karl Bode

Ever since regulators blocked AT&T's acquisition of T-Mobile, T-Mobile has responded by lighting a fire under the wireless industry. With an amusing CEO and consumer-friendly policies, the company is currently adding more new subscribers per quarter than any of the other big four carriers, once again shockingly highlighting how not treating your customers like the enemy can pay notable dividends. But no matter how well T-Mobile has been doing, German owner Deutsche Telekom has made it repeatedly clear that it wants out of the U.S. market.

However, getting a sale done has proven harder than the company expected. After the AT&T deal was blocked by regulators, they also indicated they wouldn't approve a sale to Sprint, in order to keep four large, viable competitors in the market. Rumored for a while, indications now are that satellite TV provider Dish Network is in talks to acquire T-Mobile in a deal worth more than thirty billion:

"The two sides are in close agreement about what the combined company would look like, with Dish Chief Executive Charlie Ergen becoming the company’s chairman and his T-Mobile counterpart, John Legere, serving as the combined company’s CEO, the people said. Tougher questions about a purchase price and the mix of cash and stock that would be used to pay for a deal remain unresolved, the people said. One of the people characterized the talks as at “the formative stage,” and said an agreement might not ultimately be hammered out."

The deal would join a wave of consolidation in the telecom sector, including Frontier's acquisition of Verizon's California, Texas, and Florida fixed-line assets, Verizon's acquisition of AOL, Charter's acquisition of Time Warner Cable and Bright House Networks, and AT&T's acquisition of DirecTV. And while Dish is rumored to be a horrible place to work and boss Charlie Ergen has a reputation for being a pain in the ass to work with, the deal makes quite a bit of sense and should probably have no problems getting past regulators.

Whereas T-Mobile has been a thorn in the side of AT&T and Verizon, Dish has been similarly disruptive on the TV front, whether that's via its ad-skipping Hopper DVR, or the launch of its new Sling TV Internet video service. Dish has also been slowly accumulating a ton of spectrum over the last few years, insisting it was pondering a solo or joint wireless play. And while combined it's believed that the new T-Mobile under Dish would have even more spectrum than AT&T or Verizon, it wouldn't be enough to trip the FCC's "spectrum screen" used to determine competitive harm:

$DISH/$TMUS would fit under @FCC spectrum screen and have more spectrum than $T and $VZ http://t.co/cRH87kaWMg pic.twitter.com/vEv3r1Fqxb
— Walt Piecyk (@WaltBTIG) June 4, 2015

There had been some worry that Dish was just acquiring spectrum in order to sit on it, flipping it down the road for additional cash to AT&T and Verizon. Instead, a Dish buy could result in an even stronger T-Mobile with the spectrum and resources to shore up the one area where it still lags behind AT&T and Verizon: total network coverage. Telecom writers everywhere also win under this deal, as entertaining f-bomb dropping T-Mobile CEO John Legere is expected to remain at the helm of the new, tougher company. Should Sprint finally be able to get things together under new owner SoftBank, we might actually start seeing something vaguely resembling real, sustained price competition in the wireless sector.

Filed Under: competition, mergers, spectrum, wireless
Companies: at&t, comcast, directv, dish, t-mobile, verizon

12 Comments

AT&T Might Agree To Adhere To Neutrality Rules To Seal Its $49 Billion DirecTV Purchase, But Probably Not

Broadband

from the believe-it-when-you-see-it dept

Thu, Jun 4th 2015 8:21am — Karl Bode

There's not a company around that hates the FCC's net neutrality rules more than AT&T, as its two lawsuits against them attest. There's a pretty obvious reason: AT&T's been at the bleeding edge of obnoxious, neutrality-trampling network pricing models for a decade, and obviously doesn't want the government interfering in these ambitions. But at the same time, the telco wants regulators to sign off on its $49 billion acquisition of DirecTV (including the exclusive out of market broadcast rights of NFL Sunday Ticket). As such, the Washington Post claims AT&T is telling regulators it will agree to net neutrality to get the deal approved:

"Among the deal's so-called conditions is expected to be something fairly simple. AT&T is prepared to accept aspects of the net neutrality rules adopted by the Federal Communications Commission earlier this year, according to people familiar with the negotiations, who declined to be named because the deliberations are private."

Can you spot the one word in that paragraph that should cause reservations as to AT&T's sincerity? ISPs have long stated they're fine with some "aspects" of the FCC's net neutrality plan, most notably the no blocking or service throttling provisions -- since they've never really had an interest in that. There's no money in it, and it's a PR minefield. They're focused on notably more clever and less obvious abuses of net neutrality, including usage caps, interconnection, and zero-rated apps, where users and companies can be nickel-and-dimed under the pretense of ordinary business behavior.

And indeed, as the Post moves on to talk about interconnection issues, you'll note AT&T's enthusiasm for cooperation wanes notably:

"Critics of the DirecTV acquisition have asked that, as part of the deal, the FCC require AT&T to route incoming content to consumers without levying a fee on the companies sending the traffic. In reply, AT&T has said that its recent deals with content delivery firms such as Level 3 show that the current system of privately negotiated contracts is working properly."

Of course, the only reason AT&T struck a deal with Level 3 is because it was worried about running afoul of the FCC's net neutrality rules, which actually suggests it's the FCC's neutrality rules (in fact the mere threat of them) that's working properly. AT&T doesn't want the FCC policing caps either; we recently noted it's also trying to argue that any merger conditions that prevent it from abusing usage caps will somehow hurt fixed-line broadband competition, despite the fact AT&T's only using usage caps in markets with less competition in the first place.

So while the Post headline proudly proclaims claims that AT&T's eager to adhere to net neutrality rules to get the deal done, the reality is there's absolutely no indication the telco intends to adhere to any of the parts of the net neutrality rules that actually matter. Most reports suggest regulators will be signing off on the deal all the same, potentially seeing a $49 billion acquisition of a satellite company in the age of cord cutting as telecom seppuku anyway. Still, it's kind of amazing how the outrage over the Comcast deal helped AT&T's deal fly under the radar, despite the fact that the elimination of a direct pay TV competitor likely won't do the pay TV market or consumers any favors.

Filed Under: deals, mergers, net neutrality
Companies: at&t, directv

20 Comments

AT&T: Broadband Usage Caps Are Awesome, And Preventing Us From Abusing Them Is A Horrible Injustice

Broadband

from the absolutely-nothing-we-say-is-true dept

Mon, Jun 1st 2015 9:59am — Karl Bode

While AT&T is now a part of two lawsuits to try and overturn the FCC's new net neutrality rules, there's probably no company singularly more responsible for the rules being necessary in the first place. It was AT&T that really got the neutrality debate rolling in the States just about a decade ago, when then CEO Ed Whitacre proudly proclaimed he was going to start charging companies like Google a "troll toll" just for touching his network.

AT&T's been on the bleeding edge of exploring creative new ways to violate net neutrality for an extra buck ever since, whether that's blocking video services to drive users to pricier plans, using throttling to drive users to costlier plans, using interconnection to sock content companies with extra costs, or using zero rating to generate new revenue at the cost of a steeply tilted playing field.

Telco CEO Randal Stephenson has been making the media rounds lately proudly proclaiming that AT&T will surely be victorious in court, and the the FCC's net neutrality rules will be vacated. But AT&T lawyers are working hard to prevent regulators from including conditions on its $49 billion acquisition of DirecTV related to neutrality as well. Despite countless instances where AT&T has used usage caps to unfair advantage, AT&T's telling regulators there's no need for neutrality conditions on the merger (with a specific eye on usage caps and zero rating some services) because history shows AT&T is a saint on that front:

"The record does not support Opponents’ request that AT&T be barred from exempting any online video service from any usage-based tracking, metering, or billing in its broadband services," AT&T wrote. "Opponents offer no reason for the Commission to reverse these very recent conclusions and issue a blanket, abstract prohibition that would apply only to AT&T. Doing so would deprive AT&T customers of service offerings tailored to fit their usage and their budget. It would also distort competition by hindering AT&T’s efforts to close the gap and compete with cable’s higher-speed broadband products."

In other words, the company is claiming that merger conditions preventing it from using usage caps uncompetitively -- something it usually only does in uncompetitive markets -- will hurt competition. AT&T logic! It's also trying to argue that ten years of AT&T's clear intent to do harm on this front is a mass hallucination. AT&T already imposes usage caps on its broadband customers (150 GB for DSL users, 250 GB for U-Verse fiber to the node customers) thanks to this lack of competition. Yet hysterically AT&T insists there's no way it could possibly impose aggressive caps because customers would leave AT&T:

"AT&T wrote that its broadband data limits are high enough to "accommodate the great majority of customers." Broadband providers with caps "that significantly impinge on the ability of customers to enjoy OVD [online video distribution] products will not be able to attract new customers or even to retain existing ones," AT&T wrote."

Here's the truly entertaining bit though: as we've noted before, AT&T has no interest in retaining most of these capped DSL users anyway. It's willfully trying to drive them away with rate hikes so it can disconnect them and focus on even more expensive and heavily capped wireless LTE service. It's also worth noting that AT&T's not currently enforcing those 250 GB caps on U-Verse users, because the markets it has upgraded with better service usually see improved competition. In short, AT&T caps markets that lack competition, and doesn't in markets where there's at least a little. Yet AT&T's telling the FCC that restricting their ability to impose what are entirely arbitrary caps that have nothing to do with network congestion -- would hurt its ability to compete.

Of course as we've long noted, net neutrality is a symptom of a lack of competition, and net neutrality rules are only necessary because companies like AT&T are endlessly exploring new ways to abuse this lack of competition. However, while the FCC's neutrality rules do allow users to complain about usage caps and zero rating, they're not explicitly included in the rules, and so far the FCC's given every indication that they see caps as just "creative pricing." While there have been hints the FCC might start policing caps (and unreliable usage meters) should they start getting notably more ugly, it's pretty far from certain as the agency appears to want to steer clear of broadband price controls.

Still, AT&T's working tirelessly on multiple fronts to ensure nobody infringes on its god-given right to use usage caps to abuse uncompetitive markets suffocated by regulatory capture. That was an honor bestowed upon the company after a generation of blood, sweat, tears and millions in campaign contributions, and it will be damned if it's going to have said rights trampled by those new startup and consumer-friendly goody two shoes over at the FCC.

Filed Under: abuse, broadband, fcc, net neutrality, usage caps
Companies: at&t

10 Comments

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AT&T Might Agree To Adhere To Neutrality Rules To Seal Its $49 Billion DirecTV Purchase, But Probably Not

from the believe-it-when-you-see-it dept

AT&T: Broadband Usage Caps Are Awesome, And Preventing Us From Abusing Them Is A Horrible Injustice

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