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AT&T Should Be Investigated For 'Fraudulent' Data Policies, Says PK
zacharye writes "AT&T on Monday announced a new plan that will let developers pay for the data used by their apps and services. The data consumed by apps that make use of this new feature would not apply toward a user's data cap. The new service was pitched as a way for content providers to ease customers' growing concerns over wireless data usage, however one public interest group sees the feature as a slap in the face to AT&T subscribers. 'This new plan is unfortunate because it shows how fraudulent the AT&T data cap is, and calls into question the whole rationale of the data caps,' Harold Feld, legal director of Public Knowledge, said in a statement. 'Apparently it has nothing to do with network management. It's a tool to get more revenue from developers and customers.'"
I don't need to read more than "AT&T Investigated" in order to agree.
That is all.
Hang'em high.
" 'Apparently it has nothing to do with network management. It's a tool to get more revenue from developers and customers.'"
Well, yeah. And the customers buy it anyway. Darn that free market.
So all the bandwidth everyone needs is actually there? The data caps were just a ruse to get more money for it.
Since people balked, even sued, AT&T now proposes that maybe developers could pay the difference.
That is telling. It means the bandwidth necessary for, say, Netflix never was a technical problem. It's just that AT&T looked at the fact that they are just a dumb pipe and AT&T wanted more money for valuable content traversing its network. It's the Net Neutrality problem all over again.
I'll see your senator, and I'll raise you two judges.
If it had been, people would have noticed significant slowdown. I'm afraid that people confuse "spotty service in dense areas" and "too much bandwidth being used". They don't realize that in a lot of cases, they wouldn't be able to use their phone to talk when they're running into data problems. AT&T has been capitalizing on this, and making quite the pretty penny.
I don't know why anyone wouldn't expect this out of them. It's basically free money, and it panders to an uneducated user base through letting them think that they'll save money, and that they'll still be able to blame others when there's a problem.
There's a reason there is no "Disagree" mod...
I love how now that they have data caps, they STILL charge for tethering, even though they have no justification for doing so. I also love how if you put a smartphone on their network, they will add a data plan and charge you for it, even if you have data BLOCKED on your account.
Break 'em up!
Oh, have we been here before?
A feeling of having made the same mistake before: Deja Foobar
AT&T is run by a bunch of greedy bastards and to expect anything different is foolish. Seriously. The FCC needs to man up and put them in their place.
"We are just a war away from Amerikastan. When god vs god the undoing of man." Dave Mustaine
" 'Apparently it has nothing to do with network management. It's a tool to get more revenue from developers and customers.'"
To use a phrase, "Well, DUH!".
If you had looked in AT&T Wireless's annual reports for the past two years, they never indicated they were reaching any sort of limits on their network.
So either they were lying to their shareholders or to a gullible press and public.
Which is more likely?
You were mistaken. Which is odd, since memory shouldn't be a problem for you
"So for any given app you can either bill the dev a little bit, per installation or per use, or you can eat into the user's data plan."
The point is that AT&T said that the bandwidth was the scarce resource in their network and that caps were necessary to conserve that resource.
But as soon as a new revenue source was available, then the network was magically unconstrained. This is not "good idea", unless you're an AT&T shareholder, and then its magically a fantastic idea.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Someone has to pay for this bandwidth.
The end user was already paying for it with the unlimited data plans. AT&T decided to be a greedy little bitch and end that. Now they want both the end user and the app developer to pay them money.
Telcos/ISPs are greedy and uncaring liars - film @ 11.
It must have been something you assimilated. . . .
Ultimately it's just a method for AT&T to hide the fact that they're charging their customers by having someone else charge them instead. Because you know how this will work, right? AT&T will charge Netflix, and that will cause Netflix to increase their prices. You'll pay the price either way.
The beauty of this is like so:
1. User pays same amount for 'capped' bandwidth regardless
2. "Developer" pays for their bandwidth - even though it doesn't really line the pockets of the user with any savings
3. "Developer" passes buck to users with higher prices/more ads.
Wham-bam, thank you ma'am.
This is another kick in the balls of network neutrality. These people won't stop until they get anyone that touches a bit in transit to pay for the privilege. The end-user already pays. They wanted the source of the data to pay (despite that they pay for their connectivity). Now they want the provider of the app that receives data to pay. I wonder what other such innovations are waiting for us in the future.
Why would they use the money to upgrade their network? If there's more data usage than their network can handle, it just means they aren't charging enough.
'Apparently it has nothing to do with network management. It's a tool to get more revenue from developers and customers.'
Cellular provider gouges customers and developers with data plan caps and pricing. News at 11.
So when are they returning all the public funds they used to build this infrastructure?(with appropriate interest)
No, and they won't because they don't understand how they're being screwed. The vast majority believe their handset is actually free because they paid nothing for it while signing up for an expensive 2 year contract.
Nope. New carriers can't crop up due to spectrum constraints and all existing carriers match pricing and features extremely closely.
Bull. They're among the highest, coupled with ridiculous data rates and stupidly inflexible plans.
Then there are people like me who actually went out bought a Wilson Amplifier and realized pretty good connections speeds compared to the lowely satellite alternative as I suffer to live in a quite, peaceful, rural area. My only problem is I get 2 GB monthly (Verizon) over my HTC Incredible and since the introduction of the iPhone (coincidentally?) have seen my 1.0+ mbps drop to about 512K (up and down). Still fast enough to work. But after watching just a handful of video (and all the freaking prefixed ads) I hit my cap really quickly. I guess I wouldn't mind paying more if I could use this like a good ole DSL circuit, use it without fear and freely. I am very frustrated with this and I just know, and it really does smell like, market manipulation and collusion between carriers. Telco's have ALWAYS been like that. You might think T-1's would be cheaper now that so many of the landline phones are wireless now and the dedicated copper to service them lies dormant. But T-1's have always had the something special tag to them and appear to still do. So frustrating to be in data jail. I still pay an arm and a leg for service and often stare at my phone thinking what am I getting for all this money other than frustration? Not sure about AT&T, but Verizon had 108+ million subscribers with an average cell phone bill around (excluding the never calcuable taxes, surcharges, and taking into account 60% cell and 40% smartphone) is about $80, that makes there revenue in one month 8.6 billion. Not too bad if you ask me. Why do they insist they are the victims when in fact, it is the consumer...
[quote]No, and they won't because they don't understand how they're being screwed.[/quote]
hmmm, that doesn't really sound like they are being screwed.
[quote]New carriers can't crop up due to spectrum constraints and all existing carriers match pricing and features extremely closely[/quote]
This is only partially true, WiMax is/was seen as a viable alternative to LTE and it can run in spectrum that is available in most markets.
[quote]Bull. They're among the highest, coupled with ridiculous data rates and stupidly inflexible plans.[/quote]
uh, no. go to europe and find a comparable plan. even with the 'inflated' service rates to compensate for heavily subsidized phones US plans are cheaper.
I do think AT&T is basically Satan but in this case, I don't see it. They're absolutely guaranteed with this system to get paid for bandwidth that gets used. So if your app uses X amount of data and they know how much data will be used so you as a developer pay per megabyte for example, AT&T is assuring themselves that they'll have the money to upgrade their infrastructure if the need arises due to more data because the money is there to cover it. When it comes to just phones, you don't know if the customer will use 50MB or 5000MB.
I think in general, if your customers are going to use X amount of data as a grand total-based average, build that much of an infrastructure and charge accordingly instead of convincing customers to use less data through stupid tactics.
The simple metric is based on the people's knowledge and tolerance for beatings.
Thankfully, AT&T wasn't able to merge with T-Mobile, as T-Mobile is the only other big player in the GSM market.
What is going on now is nothing new. Think back (old-timers) to when we had to pay for EACH phone extension in the house! Same line, same amount of talking, but you were charged extra for what... the convenience of having an extension in another room? Monthly?
And then there was the old Touch Tone charge... yes, we had to pay extra if we wanted to use Touch Tone. Oh, wait, that was back when it was just ONE phone company. Then Bell was broken into many companies and we finally had competition.
Now, they are trying to force us to pay for each device, AND the amount of data. I'm all for data caps, but my SIM card should be used however I see fit, and the data used however I see fit.
Eventually, it will all come around to sensibility, after they have squeezed as much out of consumers as possible.
The only weapon we have is to ignore the 'free phone with contract' crap, and buy an unlocked phone (or used one). Then use a no-contract service that is priced fairly.
I don't know about the US, but here in the UK all mobile internet providers are required to censor adult content from connections by default. If you want an unfiltered connection you need to get them to remove the filtering on your account, which requires jumping through a few hoops. The difficulty of the hoops varies by provider.
While I tend to believe that this is AT&T being corporate money-grabbing assholes, I have to disagree on the inference you made, that "we will allow the apps on our network if devs pay for bandwidth" implies "there is no capacity problem".
Charging for something is a way for regulating demand for a scarce supply of something. It's literally Econ 101, supply and demand. AT&T has to charge someone for the capacity used, such that the rates charged for it will regulate it. If there's a capacity problem, the rates go up. When the rates go up, demand goes down, and the capacity eventually reaches equilibrium based on price. It's how any producer sets the price of something in limited supply and high demand.
If demand is high enough for a sustained amount of time, then it's in AT&T's best interest to expand the production capacity (i.e. increase bandwidth available on their network), thus raising the supply. The marginal price goes down, but they are selling more total bandwidth, so their total revenue goes up. If they don't expand in a timely manner, a competitor comes in with better service for the same price, and all AT&T's customers leave and join the competitor.
In any case, you need to attach a price to the thing in limited supply so that it self-regulates. If no one pays for it, that's when there's a capacity problem.
If you want to argue about AT&T selling unlimited data plans that aren't really unlimited, that's one thing. You can also argue that bandwidth is not a true "physical" resource that takes cost to produce; once a certain capacity is in place, you shouldn't charge for usage. You can also argue that spectrum itself is scarce and the government grants a monopoly to these few companies, so competition is limited or nonexistent, and so they should be regulated. These are all fair arguments. But the general inference of "devs pay for bandwidth" => "no capacity problem" is fallacious.
At first glance, this seems like a good idea for the consumer, but for smaller, independent and boot-strapped developers (from whom most of the innovative products come) this is basically a nail in the coffin. The only reason the Internet is as innovative as it is now is because any Joe Schmoe with a great idea, some time on his hands and a deep willingness to learn can get his software into hands of millions of people and literally disrupt industries.
Allowing a company to pay for their users' data usage seems like a great idea for consumers, at least in terms of immediate monetary value. Google or Pandora can pay for my data usage and I can consume all I want.
The real problem is that this allows large, well-funded (and probably stagnant) software companies to completely crush smaller, less well-funded companies who have innovative or disruptive ideas. Who's to say You and I don't have a great idea together and want to compete with Pandora? Oh that's right, they have millions in investment capital and we only have time and development skills.
This is the same argument as allowing certain websites to pay extra for faster Internet speeds. Sounds like a great idea on paper, especially for consumers in the short-term, but in the long-term it will harm the entire industry in general by stifling creative innovators.
In the end, whoever has the most money wins.
If cellular data wasn't billed at a minimum of two orders of magnitude higher than a standard connection, I could almost agree that there's a hint of something sensible in there. But the reality is the cell companies either have a local monopoly over service or are colluding to keep prices artificially high (remember how SMS rates climbed from 10c to 15c to 25c per message, and the change took effect on all major networks within a week or so of the initiator's announcement? also, remember how SMS costs cell companies literally nothing, since it sits in basically padded headers that would be going out regardless?)
I'm OK with companies charging for a valuable service. Cellular data service is valuable to me. I'm happy to pay for it. What I'm not OK with is artificially high prices, poor service, and unavoidable* one-sided contracts where the company isn't even holding up their end of the deal. If they even made an effort to improve their infrastructure to provide better service (more bandwidth to the towers) and alleviate the problems, I'd be understanding. But that's just not happening.
And for a stupid analogy - I don't expect Kraft to pay a piece of my water bill, despite the fact that I needed to use water to boil macaroni. You can bet they sure as hell wouldn't go for it, and I wouldn't do business with them if they did since they're just helping prop up an absurd system. I'll be boycotting any developers who buy into this bullshit, should it ever get that far.
* Ok, legally I don't need a cell phone. But legally I don't need any internet connection either; going without either is impractical in this day and age
How are sites slashdotted when nobody reads TFAs?
and then AT&T can raise prices on the developer, who doesn't really have "switch carriers" as an option; all they can do then is drop the bandwidth back on the users, who won't be happy and won't (all) blame AT&T for it.
What is wrong with this?
It's fraud.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
I wouldn't have a problem with your mindless regurgitation of the tired assertion that, "Charging for something is a way for regulating demand for a scarce supply of something," if it was a hard good that was being sold. But you're talking about bandwidth that's sold on both the up and down side. Not to mention the fact that as a 'consumer' I have no control over the commercial side of the payload I'm required to download along with the 'content' I request.
The average webpage has mushroomed in size from 15k in 1985 to over a 1MB today, and I have no say in the matter other than the choice not to play.
AT&T on the other hand provides services to consumers and the purveyors. It's a stacked deck, and even though each state has an agency charged with scrutinizing the tariffs, I no one seems at all interested in what's best for the lowly consumer.
Econ 101 would also inform you that you don't want to kill the goose that lays the golden egg... oh no, that's a fairy tale... just like the one you're spouting.
I've heard this explanation before, but one thing bothers me: Under the plan I read about, the customer would still get their gigs of data, it's just the sponsored content wouldn't be pulled from that allotment. So if Netflix paid the bill, for example, you could stream 10 gigs of Netflix and still have your 2 gigs left over for other services. The user wouldn't see a lower bill, but if they would see more data landing to their phone.
I still think it's a shitty idea, it's just the 'double dipping' argument I think is incorrect.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
I don't see why people get so bent out of shape when someone tries to change which of their pockets the money is coming out of.
The people getting bent out of shape are the people who have an unlimited contract. Kind of an important detail in this topic.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
The dev's are the only people that can control how much bandwidth is consumed. If they have to pay vs consumer, then the devs will consider what data is important instead of programming like bandwidth is unimportant.
if it was a hard good that was being sold
You missed the part of my post where I said: "You can also argue that bandwidth is not a true "physical" resource that takes cost to produce; once a certain capacity is in place, you shouldn't charge for usage."
But you're talking about bandwidth that's sold on both the up and down side.
What are you talking about? AT&T is proposing to *not* charge on the download side, i.e. not count the bandwidth towards the download cap of the end user. Instead, they would charge for it on the upload side, to the service provider who is delivering the content. Sure, the service provider may pass that charge right along to you, but that's *still* only one charge for the bandwidth by my math.
Not to mention the fact that as a 'consumer' I have no control over the commercial side of the payload I'm required to download along with the 'content' I request.
This is a total strawman argument. Take a data plan that can handle streaming video (I don't know if there actually are any today, as this is the problem AT&T is trying to address here, but hypothetically speaking), and the ads or other junk that comes alongside it would be a tiny, tiny fraction of the overall bandwidth used.
unfortunately, spectrum is a limited resource and as such there are limits on competition
You seem to have missed the following, which was in my original post:
You can also argue that spectrum itself is scarce and the government grants a monopoly to these few companies, so competition is limited or nonexistent, and so they should be regulated.
To my old codger brain PK == Phil Katz.
You aren't forgotten Phil.
"Gold still represents the ultimate form of payment in the world." - Alan Greenspan, 1999
Bandwidth is not the issue here people, AT&T is limited by the total spectrum they have available for wireless subscribers. As each device requires radio time on the network, there is essentially a limit to the total number of subscribers a tower and network can service. With iPhones and wireless users, it seems AT&T has opted to add a data cap to urge users to essentially use less "radio time." We have a number of M2M devices using the AT&T network around the US, although we use GPRS, not 3G. The situation for M2M is a bit different compared to consumer devices as these devices often use some "radio time" but send much less data, meaning AT&T gets less $$/subscriber. I've seen devices barred on AT&T and T-Mobile networks while in our home PLMN, which shouldn't happen aside from subscription issues or lack of GPRS resources on the network (i.e. too many subscribers on the tower). Most annoyingly though, AT&T has not fessed up to this...so I hope the investigation is successful and AT&T opens up the inner details of their network. I've also read about a setting called EONS (Enhanced Operator Name String) that forces devices to see both home and roaming network, whether or not AT&T owned, to be displayed as an "AT&T" network. This can fool some users into thinking they are NOT roaming, when in fact they are. Grrrrrr AT&T
and there's the cost of doing business.
when someone "uses" bandwidth they can not go for more what they are allowed to. that is a bandwidth cap. Telcos are either lying or overselling said bandwidth. When you have a network that can serve at most X consumers at the same time, and allow access to 10X you run into problems for certain. Knowing that internet is more & more a central part of the daily life one should expect that 10X will be 100X shortly and add more capacity (which is one big shot $$$, but can be concidered a fixed non recurring cost for all intents & purposes, recouped with volume)
Oh, data on the other hand is not limited/scarce resource.
I make money with a rented car, may be I should I call the dealer and offer him more money ...
You're cute. The whole reason AT&T gives for capping their bandwidth so low is that they have limited bandwidth on their towers (and backends for landlines). Charging developers isn't going to fix this..you really think they'd make it to where netflix or someone similar would have to pay for all the bandwidth you used? This would make the limited bandwidth situation worse and would drive away newcomers to the mobile app market.
No, more than likely what will happen is they'll charge the developer for the bandwidth their app used, charge the customer for the bandwidth they're using, and pocket the rest of the funds. Don't like it? You're banned from the AT&T mobile network.
Job? I don't have time to get a job! Who will sit around and bitch about being broke and unemployed then?
WTF? US providers are some of the least expensive in the world? That's not true at all.
We have two cell phones here and we pay about $5 per month for service on both of them. We don't pay for incoming calls or texts and there's no contract. If I want to use data, then I can pay $1 per day for unlimited - $5 for a week, $20 for a month. Tethering? No problem; they'll even almost give you the USB dongle for your laptop.
I've got a WiFi 3g / 4g thingie that cost $25, and using it to support several devices is covered by the data costs I already described.
And the cell phone companies here are making money hand over fist. You're getting screwed big time in the US - and you're too ill-informed to realize it.
And by the way, unlimited means "all the data you can move" here; no caps or limits.
So they want a cut? Maybe they should have thought about that while they were renegotiating their deal with Steve Jobs. AT&T was probably all happy with themselves... still got iPhone exclusive... paying Apple less per new customer... Let them keep the money from those "app" things.
Most developers get 2/3 of 99 cents. So how much data access is 66 cents supposed to by for each customer?
A long time ago (around 1996) I read an interview of the executive of an ISP company. The magazine asked if they were scared of AT&T (or one of the Bell companies) getting into the internet business. The answer they got was "No, those guys can't get out of their own way." and "They are genetically wired to metered services".
I guess he was right.
The user of the phone is the one who chooses between:
-Use cell tower or wifi for internet?
-Upload the pictures or Not?
-Get email 20 times per day or just once?
etc.
The developer can save some data by spending 80% more time to get 20% more efficiency. But in the end, that's just some savings per transaction. If a user decides to use it an outrageous number of times per day, how could a developer do anything about it?
Would you be responsible for the data bill for everyone using a tool you created? Of course not.
More important, if AT&T was billing YOU for someone else's data, would you just accept whatever number they decided to say? NO.
When you start billing everyone, they start wanting to see exactly HOW you got that number. There will be all kinds of fighting over things like:
- Apple's iOS sent that packet, not my app.
- I'm not paying for a rebroadcast of data packets that AT&T dropped.
APK
This is just an end-run to get the consumer to pay more money. Any fees which the developer has to pay will be passed along to the customer. So, in the end, the customer is paying AT&T directly and then paying AT&T via the developer. The developer will simply pass along the added costs to the customer.
I see this as a means of targeting services which compete with AT&T such as streaming video and voice. AT&T does not want to just be a pipe, supplying raw bits as they make met of their money through premium services.
You can take AT&T from the above and change it to Verizon, Comcast, etc. as well because I know that they will follow suit if AT&T gets this in place. I am certain also that these companies are already working on resolving how best to deal with the loss of customers who are paying for premium services as these customers turn towards the internet for content and services.
'Apparently it has nothing to do with network management. It's a tool to get more revenue from developers and customers.' I think everybody on the planet already knew this.
Call me when we have real, effective competition in the mobile wireless market.
There is no effective competition. Barriers to entry are extremely high -- like starting a new automobile manufacturer company. There are only a few of them. And they collude to fix prices. There is no free market here.
I'll see your senator, and I'll raise you two judges.
AT&T claimed they couldn't expand to accommodate growing usage due to technical limitations and that was the reason for the tight data caps. This was supposed to be a firm limitation not solvable by throwing more money at it.
This move guarantees increases data usage dramatically which suggests there is no firm limitation, AT&T is just trying to charge more for data than the market will bear.
'You missed the part of my post where I said: "You can also argue that bandwidth is not a true "physical" resource that takes cost to produce; once a certain capacity is in place, you shouldn't charge for usage."'
Perhaps he didn't buy the tatic where you toss an off-hand one liner at each of the arguments that erodes yours at the end to prevent others from expressing them and damaging your argument.
What are you talking about? AT&T is proposing to *not* charge on the download side, i.e. not count the bandwidth towards the download cap of the end user. Instead, they would charge for it on the upload side, to the service provider who is delivering the content. Sure, the service provider may pass that charge right along to you, but that's *still* only one charge for the bandwidth by my math.
Oh? And do I get some kind of discount on my bill each month for this? Otherwise, all they're doing is upselling the bandwidth even more than they already are.
Most "normal" people don't get close to their 2GB caps. If they use 200MB normally, and watch Netflix on Wifi, they will likely end up paying more for this when Netflix has to raise prices.
So basically, your argument would only work if everybody routinely hit their caps and/or AT&T only charged by the MB.
AT&T will charge Netflix, and that will cause Netflix to increase their prices. You'll pay the price either way.
... and either way the money goes to AT&T.
This space for rent. All reasonable inquiries will be entertained at proprietors discretion.
My post was addressing the (IMHO incorrect) inference that "devs pay for bandwidth" implies "there is no capacity problem." I stand by my original argument.
If you want to have a different argument about exactly what bandwidth and capacity is, and how an ISP should be amortizing their network investment, we can do that, but that in no way erodes my original argument.
Exactly my point. It's a way for AT&T to charge you extra at the expense of Netflix's PR.