AT&T has invented a way to charge you twice for the same Internet

“Stop! Before you download that data, make sure it’s ‘permissible,'” Dave Smith writes for ReadWrite. “In the midst of a raging debate over whether carriers should be allowed to charge more for certain types of data, or let favored developers offer users apps that don’t count against their data caps, AT&T has applied for a patent on a credit system that would let it discriminate between ‘permissible’ and ‘non-permissible’ traffic on its network.”

“According to the application, AT&T would be allowed to decide what other content is ‘non-permissible’—movies and file-sharing files are just examples—and the carrier could also levy additional fees or terminate the user’s access if they tried to access unauthorized content or exceeded their ‘credit allotment,'” Smith writes. “Here’s why people find that scary and annoying: It violates a longstanding principle of the Internet, called ‘net neutrality,’ that holds that Internet service providers should treat all the data on their networks equally.”

MacDailyNews Take: Do not confuse the principle of “net neutrality” with other so-called proposals labeled “net neutrality.” Read the fine print.

“A recent ruling in Verizon’s favor has weakened the Federal Communications Commission’s ability to regulate carriers like AT&T—which sets the stage for putting a system like the one described in this patent application into place,” Smith writes. “To be clear, AT&T hasn’t been granted a patent yet. But its intentions to charge more or less for various kinds of data have been clear for some time. Just last month, the company introduced a new ‘sponsored data’ plan that allows some companies to pay AT&T in exchange for data usage by their apps not counting against a user’s data cap. In other words, companies willing to pay AT&T a toll will receive preferential status.”

Read more in the full article here.

MacDailyNews Take: Resist the all-too-frequent urge from some to prematurely regulate. Beware unintended consequences. Let market forces first work their magic – or not. If anything needs to be regulated, at least then the path(s) will be less occluded.

Here’s an example over which to ruminate: Apple skims off a bit of its mountain range of cash to secure sufficient bandwidth to support an all-new content delivery service, “Apple iTV” that delivers things without which we discover we cannot live after about three days of use (see: Mac, iPod, iPhone, iPad, etc.) Without securing necessary bandwidth, Apple’s revolutionary new service would be doomed to failure and, without the capability in place to secure necessary bandwidth, Apple’s revolution would in fact never even have been developed in the first place.

[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]

40 Comments

    1. You’re either just smoked something, or completely idiot. Even with the Apple mountain of cash, the wireless network one can build are barely holding the call.

  1. AT&T is opening a can of worms for itself. What are organizations like the MPAA and RIAA going to do when, inevitably, AT&T’s screening methodology fails (or is hacked/bypassed) and a user downloads pirated content? Now AT&T is liable because it took on the duty to police downloads but failed to do so accurately.

    I think the quest for additional revenue has led AT&T down a minefield for a path. Besides the costs associated with implementing and maintaining such a system, the liability for being wrong is ever present and would seem to potentially exceed the profits that could be made, after the expense of paying for the system.

    And that doesn’t even begin to address customer outrage when someone believes they are legally downloading a movie but are flagged as haven downloaded unauthorized content. Remember the firestorm from kids downloading in-app purchases? Can you imagine all those illegal song and video downloads, especially as Android devices typically do?

    Sounds like fool’s gold to me.

  2. Why should AT&T have the right to open my data package to determine if they can charge me for it? It would be like FedEx opening my shipping container, finding an iPhone and then charging me extra because the shipper isn’t on their approved list.

  3. Oh, hogwash on your claim to “Let market forces work their magic”. Market forces have one and only one goal….maximize profits for investors. If anything gets in the way of that, whether it be technology, competitors, ethics or government regulators, then the only proper response is to bulldoze the obstacle and do whatever it takes to make more profit. So in the case of net-neutrality, AT&T and others will (and already have) play the “free market – no regulation” card and end up screwing consumers.

    We need more, not less regulation to protect consumers interests and the free market should operate inside the framework of consumer and environmental protections.

    1. When “market forces” are customer abuse, expect another “market force” called ‘customer retribution’. Perhaps AT&T shouldn’t be in business. Perhaps you should say so to every human you know and meet. Perhaps the “market force” called ‘dump the bastards’ will take place and AT&T will FAIL and go bankrupt, again.

      1. Except that with a handful of corporations controlling access to the net through their gateways and colluding to erect a toll gate system, where are consumers to turn? We theoretically have a deregulated telephone land line industry. Try switching basic service carriers. You’ll find you have only one option, take it or leave it. Same with cable. For the first how many years was it that you could go to any cell phone carrier and be locked into the same two year contract and subsidy system? How many years did it take for T-Mobile to finally break that industry-wide system? The net should be just like utility power lines. Any vendor can use them to deliver power that customers purchase. The only fee the owner of the wires and poles collects is a small distribution fee.

          1. This came about because communities wanted a private company to go I the expense of laying cable for them with no guarantee of revenue. In exchange the cable company was given a local monopoly. Then it consolidated with other low-margin competitors to give it more power to negotiate with content providers.

            Then came cable modems and well, here we are.

            1. Local electric utilities built and paid for their poles and wires too, but state public utilities commissions imposed deregulation rules that required them to share their delivery systems with other service providers for what’s termed a “distribution fee”. This amounts to typically less than $10 per month on the average bill. The bill is broken into four parts; distribution, usage, meter services, and billing. In California and many other places any company can perform any of the other three services for a customer. the only function that can’t be assigned to other companies besides the owners of the physical infrastructure is the distribution service. That’s what needs to happen in the cable/ISP industry. All I use from my phone service provider are the copper wires. My DSL is through a 3rd party consolidator. My ISP and billing are through various independent ISP and web/domain hosting companies. Yes, I can do this, but in many cases I would still be paying for these services from whoever owns the infrastructure, even though I don’t need them and don’t use them.

  4. Market forces cannot regulate a market that isn’t free to begin with. Most places in America, the local cable monopoly has no effective competition other than the telephone monopoly’s slow DSL. Asking market forces to regulate that situation is like expecting the Standard Oil Trust to regulate fuel prices. Even with all its cash, Apple can’t possibly fix the cable company stranglehold on the ‘last mile’. Without net neutrality, what is to stop Comcast from charging a premium for content that doesn’t come from its NBC Universal subsidiary?

    1. “Without net neutrality, what is to stop Comcast from charging a premium for content that doesn’t come from its NBC Universal subsidiary?”

      Anti-trust laws that would call this an abuse of monopoly; in other words, regulation.

  5. To produce electricity requires enormous capital expenditures and on-going cost to feed the hungry generators producing said electricity. I realize it is not an apple vs. apple situation, but I cannot figured out why internet access costs me more than the electricity I use each month. Also, why is it that Red Roof Inn gives you free internet access but the Hyatt charges you and inveriabley the service sucks?

    1. Infamous Time Warner Cable has tried 3 times to instigate a toll system whereby the victim customer is charged 10x above cost for Internet access if they go past their contracted bandwidth. Thankfully, during each attempt, Time Warner Cable has been kicked squarely in the balls until they relented and said ‘Customer!’

      IOW: We’re living in an age of ‘Screw Thy Customer’.

    2. It’s not as apples-to-oranges as you think. To “produce bandwidth” requires enormous capital expenditures and ongoing cost to feed the hungry backhaul providers providing said bandwidth.

      Remember that bandwidth is limited resource. It’s very similar to electricity or water in that transmission systems have only so much capacity.

      Speaking of transmission systems, much of the infrastructure that goes into producing the electricity you use every month has been amortized over many decades. Mines, coal plants, railroads, and much of the grid itself have all been paid for many times over, and the costs shared by nearly all. In contrast, much of the infrastructure that goes into providing your internet bandwidth – especially the wireless variety – isn’t old at all, and the cost is borne by a much smaller percentage of the population (even if that percentage is increasing).

      The larger point is that just because you think power should be expensive, and bandwidth should be cheap doesn’t make it true.

      No comment on the hotel situation other than to agree that it’s also a pet peeve of mine.

  6. As usual, if a biznizz is screwing over you, the customer, retribution is in order. It’s the primary way to get the customer back into the center of a real capitalist system.

    My favorite retribution: Rant like hell to everyone who will listen about what crap the company pulled on you. It’s deadly. It kills companies.

    1. Write all you want. The monopoly ISPs don’t care about customer satisfaction or their image. You still have to do business with them or do without. I suppose if you have unlimited funds you could run all your computers, TVs, and such through one of the cellular networks, but for most of us, affordable high speed high capacity Internet is a one-horse race.

      1. I know! Horrible mess.

        Thankfully, where I live, we have a choice. We have a battle between Verizon FIOS and Time Warner Cable. As you might imagine, in our age of biznizz bozo city, the two of them attempted to collude and market their services as one. But for a change, #MyStupidGovernment decided that was a bad idea.

        That is not, of course, to suggest that Verizon give’s a rat’s about their Internet companies. They don’t.

        My friends in Denmark continue to taunt me over their FAR superior and FAR cheaper Internet bandwidth. Infuriating.

        USA: We parasitize our citizens! We’re going to hell. Come join us! 👿

        1. I’m up too late, apparently. Please read:
          “That is not, of course, to suggest that Verizon give’s a rat’s about their Internet CUSTOMERS. They don’t.”

          Yes, it would help if I had my posts edited before I post. Let me call Hannah…

  7. Do you enjoy cable? Do you love that to get access to high viewership channels like news networks, sci-fi, discovery, A&E, ETC that you have to buy the higher tiered packages? Do you love your $100-200 a month television/internet bills? Well get ready for fun folks. Because in just a short time, all you cable cord cutters will be bathed in the lime light with tiered internet services!!! Want a 25/25 high speed internet? Sure that’s an amazing low price of only $19.99 a month! However, its restricted to only basic web and email content with a 5GB a month bandwidth limit. Its only $9.99 a gig after that. If you want to use services such as remote desktop, and VPN, that is included in our $59.99 business class package with a $20GB limit. Do you want to stream Netflix, Hulu Plus, iTunes, or Music services. These options are available in our home multimedia package for only $99.99 a month with a$50GB limit. How about our exclusive sports streaming package? That will only run you $159.99 per month, with local games blacked out. Would you like the full internet package? That will only run you $199.99 a month for the first 12 months, $229,00 there after. All services open with a $100GB per month limit. All wireless routers and network equipment required to run this will be provided by your cable service with a per month device charge. No 3rd party device compatibility. Details subject to change. Restrictions apply. And fuck you, you don’t get to complain because we are the only ones you can get internet from in this area, so pay up or you get nothing.

    Enjoy your free market regulated internet.

    1. “And fuck you, you don’t get to complain because we are the only ones you can get internet from in this area, so pay up or you get nothing.”
      ==
      You just owned several posters by cutting their argument off at the knees.

    2. There is no free market with the Internet. A precious few companies control all edge bandwidth. It is an oligarchy. They are essentially a bandwidth cartel not unlike OPEC. I call them OBLSP or the Organization of Bandwidth Limiting Providers.

      The problem is they spent their billions building the primary path for communications to your doorstep. No one else did. They own the pipes the Internet lives on.

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