AT&T's New Scheme To Double Charge For Data: Call It A 1-800 Number For Internet Content

from the ignoring-how-the-internet-already-works dept

Some of you youngsters may not remember what really kicked off the big "net neutrality" fight over the past few years. It was back in 2005, when then AT&T CEO Ed Whitacre suggested that internet companies should pay a second time to reach users. This was particularly nefarious. What Whitacre was suggesting was actually that AT&T get to double charge everyone. That's because the way it was (and still) is that everyone pays for their own bandwidth -- including the big internet services like Google. However, the way Whitacre was describing it, the bandwidth you got only paid for half the transit. That is, you only paid for your bandwidth from your premise to "the cloud" but not back out to any end machine. That that bandwidth was paid for by whoever owns those end machines was entirely ignored. So the plan was not just that Google would pay for its own bandwidth, but that Google would also pay for your bandwidth to get Google to your computer (ignoring that you already paid for it).

That didn't go over so well with people, and got particularly ridiculous when Mike McCurry, running an AT&T lobbying effort, insisted that Google didn't pay a dime for its bandwidth. For rather obvious reasons, he refused my proposition that he agree to pay Google's bandwidth bills.

Either way, it appears that the brilliant minds at AT&T have been trying to devise a new way to present such a plan that doesn't leave them so open to charges of being greedy double chargers -- and they may have found it by focusing on the mobile world, with their new love of "tiered" and "capped" plans that limit how much bandwidth you actually get. What they're going to do is charge app makers a fee to offer their services to you in a way that the data doesn't count against your cap. They describe it as an "800 number for the mobile internet."

"A feature that we're hoping to have out sometime next year is the equivalent of 800 numbers that would say, if you take this app, this app will come without any network usage," Donovan said on the sidelines of a mobile-industry conference here. It's far from clear how willing technology companies would be to pay wireless carriers for data use. Mr. Donovan said there was interest from companies who could use the feature to drum up new business from customers wary of using data-heavy services like mobile video.

This is nefariously brilliant. People associate 800 numbers with toll-free phone calls, so it's kind of like that... except it isn't anything like that at all. It's just a way to get companies to pay for the data connection you're already paying for. But the end result is exactly like what Whitacre wanted five years ago: get the app providers to pay double for bandwidth. Karl Bode summarizes the whole ridiculous plan as only he can (via that link above):

The end result is the same, with AT&T imposing bizarre tolls on content companies to obtain preferred customer status, picking winners and losers while retaining power in the wireless ecosystem.

It's an idea we're sure AT&T will pitch as a cost-saving endeavor for consumers, but given this is AT&T, you'd be naive to think cost savings will be in the equation. You'll still pay the same data rates, content companies will now just pay a fee to obtain preferred "reduced cap impact" status, then pass the higher development costs on to you. It's a ridiculous and dangerous idea, and the fallout will likely be similar to AT&T's "free ride" comments. AT&T executives either don't care how bad these ideas make them look, or don't realize it thanks to too many isolated meetings at headquarters packed with telco-think yes men.

Eventually you start to think that AT&T executives should just stop thinking before they hurt someone or themselves. If AT&T put half as much energy into running a top-flight network with quality support as they did cooking up hare-brained troll toll schemes -- they might just stop coming in last place in all major customer satisfaction studies.

This is really just another reason why the telcos are pushing so hard to move users into unnecessary tiered plans -- because they can't pull off scams like this on unlimited data plans nearly as easily.

Filed Under: double charging, limits, mobile data, net neutrality, tiers
Companies: at&t