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AT&T Plays Big Brother

Mari Silbey
12/12/2013
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Spying: It's not just for the National Security Agency anymore.

AT&T Inc. (NYSE: T) has just launched its new high-speed "U-verse with GigaPower" service in Austin, Texas. Tacked on to the service agreement for the Premier tier is a clause that stipulates users must opt in to AT&T Internet Preferences. Internet Preferences lets AT&T "use your individual web browsing information, like the search terms you enter and the web pages you visit, to tailor ads and offers to your interests."

For agreeing to participate, subscribers get a $29 monthly discount off the Standard U-verse-with-GigaPower offer of $99 per month. There's also a waiver of all fees for equipment, installation, and activation. Both Standard and Premier tiers promise downstream speeds of up to 300 Mbits/s now, with a free upgrade to speeds of 1 Gbit/s in 2014.

Not too coincidentally, the AT&T gigabit launch in Austin coincides with a push by Google Fiber Inc. to introduce its own gigabit service in the area. (See AT&T 1-Gig Fiber Live This Week in Austin.)

But, in a sign of how hugely valuable targeted advertising rights can be, AT&T is only offering its new broadband connections at Google prices if it can also access subscriber browsing data. Starting in Kansas City, Google Fiber set the standard for 1Gbit/s broadband service at $70 per month. (See Keeping Up With Google Fiber.)

While AT&T beat Google Fiber to the punch in Austin, its Internet Preferences clause may prove problematic. As GigaOM's Stacey Higginbotham points out, it may be that AT&T is using deep packet inspection to gauge the content of user traffic. If so, the telco could face regulatory scrutiny in addition to a backlash in the press.

AT&T did make a case for the Internet Preferences program in a written response to GigaOM. In that response, it included assurances that the company won't sell any personal information discovered in the web monitoring process.

"We use various methods to collect web browsing information, and we are currently reviewing the methods we may use for the Internet Preferences program," AT&T said. "Whichever method is used, we will not collect information from secure (https) or otherwise encrypted sites, such as online banking or when a credit card is used to buy something online on a secure site. And we won't sell your personal information to anyone, for any reason."

— Mari Silbey, special to Light Reading Cable

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Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
12/16/2013 | 9:06:05 PM
Not surprising
With Google and several other companies tracking what you do, this AT&T move shouldn't be a surprise. Retailers and several other firms track much of what you do through loyalty programs, social media and a variety of other means.

1984 is here.
Aloysious
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Aloysious,
User Rank: Lightning
12/16/2013 | 1:15:15 PM
Re: Pricing
"It was only willing to be competitive with a big caveat."

It was only willing to be competitive to be in order to somewhat be relevant in Austin. So, pretty much like most of the major players in this country.
MordyK
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MordyK,
User Rank: Light Sabre
12/13/2013 | 8:07:05 PM
Re: Pricing
I don't dount that there are teams in AT&T that can perform, but the question is can AT&T not get in their way, and frankly I have my doubts.
albreznick
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albreznick,
User Rank: Blogger
12/13/2013 | 4:55:41 PM
Re: Pricing
OK. I think i follow that. But can AT&T execute nearly as well as Google? I have my doubts.  
MordyK
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50%
MordyK,
User Rank: Light Sabre
12/13/2013 | 11:59:27 AM
Re: Pricing
I doubt is was that well thought out :)
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
12/13/2013 | 11:53:25 AM
Re: Pricing
That's true, AT&T is new, so it's marketing of it is new as well. Maybe they're doing it this way becuase they got so much push-back when they changed their opt-in policy on the wireless side.
MordyK
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MordyK,
User Rank: Light Sabre
12/13/2013 | 11:34:35 AM
Re: Pricing
It's pretty much teh same set of fixed cost numbers that made Google price it at $70 which includes a set of numbers about how much they can monetize the data, which is akin to their model with Android. For AT&T this is a new concept in wireless but in reality its comparable to the wireless subsidy model, where you can buy full price phones/service or you can pay it out over time with an alternate value which in this case is usage data.
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
12/13/2013 | 10:37:00 AM
Re: Pricing
What's the full rate though? Isn't that just determined by market and competition dynamics? I don't believe that either is just covering their costs.
Carol Wilson
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Carol Wilson,
User Rank: Blogger
12/12/2013 | 4:41:41 PM
Re: Pricing
Okay, I'm not one to defend AT&T but it looks to me like they are doing what Google and Facebook and others do all the time and getting whacked for it. 
albreznick
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albreznick,
User Rank: Blogger
12/12/2013 | 3:35:22 PM
Re: Pricing
Yup. It sure does. They're taking a good thing and making it look worse.
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