Senator Blumenthal Warns AT&T Not To Make Wireless Privacy A Luxury Option

from the the-illusion-of-value dept

Last week, we discussed how outlets like Reuters were making a big stink about a new proposal by AT&T to dole out "wireless discounts for advertising." Granted as we pointed out then, that's not really what AT&T has in mind. AT&T for years has been trying to craft a new industry paradigm whereby users who opt in to user surveillance and targeted ads pay one price, and those that opt out to protect their privacy pay significantly more.

It's something the company already has experimented with. AT&T for years charged its broadband subscribers up to $500 more annually to opt out of behavioral ads (but not data collection and tracking). AT&T, in effect, was trying to make the illusion of privacy a luxury option. It only stopped while it was attempting to gain regulatory approval for its merger with Time Warner.

AT&T says its latest wireless "discounts" are still a year or more out, but the company carefully leaked word of them to Reuters, hoping (successfully as it turns out) the outlet wouldn't include essential context.

Senator Richard Blumenthal appears to have noticed what AT&T was up to however, and sent AT&T CEO John Stankey a letter (pdf) asking for more details on what AT&T has planned, and warning the company not to try and make privacy something consumers have to shell out significantly more money for:

"AT&T should not hold privacy above consumers’ heads for additional cost. Rather than a benefit, it is clear that AT&T is seeking to legitimize more intrusion into consumers’ lives and more aggressively commoditize subscribers. AT&T’s announcement would create a “pay-forprivacy” standard in the increasingly consolidated phone market, driving prices up for those who want to opt out. You also acknowledge that an ad-supported wireless plan would cross-fertilize its AT&T data broker and ad targeting products, adding to the race to the bottom that exists in the internet ecosystem."

The problem of course is that AT&T's already framed the debate and prepared the press to call this a "discount," even though that's absolutely not what this is. AT&T has also lobbied (quite successfully) to crush nearly every attempt at a federal or state privacy law, however modest. Especially if proposed legislation involves any restrictions on charging consumers a premium to opt out of data collection and monetization. And because AT&T lobbyists have also successfully lobotomized the FCC, don't expect regulators to inject themselves into the equation any time soon.

That leaves you relying on the wisdom and power of "the market" to organically inhibit the idea of privacy as a luxury option. But because the DOJ and FCC just rubber stamped the Sprint/T-Mobile merger, there will soon be fewer competitors than ever, meaning less incentive to behave. And because consumers (thanks to the press) will genuinely view this as a "discount," that means limited pressure on an already dysfunctional and overwhelmed Congress. That leaves you waiting on AT&T's incompetence to derail such an effort. And while that's certainly possible given recent AT&T history, that's neither a guarantee nor the way you craft effective national privacy safeguards.

Filed Under: fees, pay for privacy, privacy, richard blumenthal
Companies: at&t

Think Tank Argues That Giving Up Privacy Is Good For The Poor

from the hurting-the-poor-helps-the-poor dept

With ISPs like AT&T now charging broadband customers a steep premium just to protect their own privacy, the FCC has begun looking at some relatively basic new privacy protections for broadband. This has, as you might expect, resulted in a notable bump in histrionics from the industry. Comcast, for example, quickly tried to inform the FCC that charging users a surcharge for privacy was ok because it would somehow magically lower broadband prices, and banning them from this kind of behavior would do a tremendous disservice to the internet at large.

Anybody even marginally aware of the lack of competition in broadband understands this is just another attempt to take advantage of captive customers in a broken market. But the broadband industry quickly doubled down, using the usual assortment of payrolled think tanks to pollute the discourse pool. The Information Technology & Innovation Foundation (ITIF), for example, was quick to try and claim that charging all broadband users steep premiums for privacy would generate huge benefits for the entire "internet ecosystem," and that anybody who couldn't see the genius of such a practice was an "absolutist."

But a think tank by the name of the Technology Policy Institute has doubled down on the already dumb double down, with an op-ed at the Hill that tries to claim that such a privacy surcharge would actually help the poor:

"'Pay-for-privacy' plans disproportionately benefit lower-income individuals. Indeed, the notion that offering an additional option would be detrimental to any consumers, whatever their income, is misguided..."A plan that offers a discount in exchange for data may enable a lower-income consumer both to have internet service and pay for groceries. Depriving the consumer of that choice may put the internet connection out of reach."

Pause with me to understand what's being claimed here for a moment. Mr. Thomas M. Lenard is actually trying to claim that adding a privacy surcharge to what's already some of the most expensive broadband in the developed world will somehow help the poor buy groceries. I've seen a lot of nonsense in sixteen years writing about telecom, but this latest storm of disinformation surrounding the FCC's new privacy push should qualify for some kind of award.

Like AT&T and Comcast, these think tanks are violently misrepresenting what's actually happening here. AT&T charges its U-Verse broadband customers $528 to $792 more every year (up to $62 more per month) to opt out of the company's Internet Preferences program, which uses deep packet inspection to track your online behavior -- down to the second. Not only is that not anything close to a discount, but AT&T makes opting out as cumbersome as possible. The hope is to heavily penalize opting out and to actively punish broadband users that protect their own privacy.

ISPs consistently try to argue that they shouldn't be regulated differently from Google and Facebook on privacy, and that argument surfaces again here:

"AT&T is giving the subscriber the opportunity to allow advertisers to pay part of the subscription fee. What would be the rationale for allowing Google to offer advertising-supported service but not AT&T?

(Raises hand) Because AT&T and Comcast enjoy a duopoly or monopoly over the last mile? Google or Facebook customers unhappy with their privacy policies can simply stop using these services (imagine the exodus by customers of either company if they tried to charge money to opt out of select privacy practices?). Broadband customers, in contrast, have nowhere to flee if one or both of their broadband options engages in hostile privacy practices the likes of which we're seeing here. Because AT&T, Verizon and Comcast are pushing harder into content and online ads doesn't change this underlying reality.

Between privacy surcharges, Verizon's getting busted for covertly modifying user packets to track user behavior, and cable companies bragging how they provide worse customer service for low credit customers, most people should be able to understand why the FCC thinks it may be time for some basic broadband privacy rules. Given that an informed broadband subscriber with the tools to protect their privacy could potentially cost these companies billions, it should also be easy to understand why think tanks and the ISPs that fund them have ratcheted up attempts to derail the effort using some of the most ridiculous arguments imaginable.

Filed Under: broadband, pay for privacy, think tanks
Companies: at&t, comcast, technology policy institute, tpi