Light Reading

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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SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 11:15:42 AM
Pricing
There seems to be a lot wrong with this (or potentially wrong depending on how it plays out with the tracking), but to start with, it's funny AT&T is advertising the $70 plan as a $30 discount when Google starts at $70. It was only willing to be competitive with a big caveat.
albreznick
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albreznick,
User Rank: Blogger
12/12/2013 | 11:37:32 AM
Re: Pricing
Yep, Sarah. I agree. Looks like AT&T is immediately getting off on the wrong foot here. Won't consumers see thru this?   
mendyk
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mendyk,
User Rank: Light Sabre
12/12/2013 | 11:43:29 AM
Re: Pricing
You mean, the same consumers who willingly post excruciatingly intimate details of their lives on Facebook et al.? What they will see is the $29 "discount."
SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 11:55:05 AM
Re: Pricing
Yeah, at least they're being clear on the policy, but I don't know if that will help. Although, doesn't Google do this to some extent already as well? I certainly get targeted ads around my searches all the time. Is AT&T going a lot farther than that, or do people just have more of a tolerance for that kind of targeting from a player like Google?
David Dines
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David Dines,
User Rank: Blogger
12/12/2013 | 1:16:03 PM
Re: Pricing
Though consider that Google service starts out with tracking turned on. I do not know if you have the option to opt out of Google collecting your data and it seems tha they are not eager to publicize their privacy policy.  Here is one part of it:

"All information we collect about the use of Google Fiber TV (including use of programs and applications available through Google Fiber TV) may be associated with the Google Account being used for Google Fiber TV."

So they are tracking what you watch and what applications you use.  Plus their regular privacy policy applies.  It is quite long but here is a snippet:

"Information we get from your use of our services. We may collect information about the services that you use and how you use them, like when you visit a website that uses our advertising services or you view and interact with our ads and content. This information includes:

  • Device information

  • Log information

  • Location information"

After reading AT&T's policy, I do not see any material difference, in fact it seems that they collect less data than Google - AT&T does not collect/correlate online with TV viewing and does not track data in server logs or your usage of other apps like email.

It seems to me that AT&T has more of a perception problem than a product problem.
SarahReedy
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SarahReedy,
User Rank: Blogger
12/12/2013 | 1:40:08 PM
Re: Pricing
Thanks for this info, David. The perception seems very valid. If it didn't present the policy as it did, there would've been backlash when people realized they were backing tracked. But, since they did, it's causing backlash by drawing attention to it. I think calling it a discount was a bit silly though. 

Also, interesting that AT&T doesn't do this on the higher tiers then whereas Google does all the time.
albreznick
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albreznick,
User Rank: Blogger
12/12/2013 | 2:24:54 PM
Re: Pricing
yeah, I think it's the phony discount thing that really stings. Why play that game? Nobody believes it anyhow.  
MordyK
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MordyK,
User Rank: Light Sabre
12/12/2013 | 3:01:40 PM
Re: Pricing
I understand why it's freaky, but in effect Google has been able to deploy at reduced prices because of this and are giving a discount of teh full rate, which is similar to the free Android model. AT&T is saying we can do teh same if given the same business model.

That said their marketing sucks!
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.
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. 
SarahReedy
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SarahReedy,
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.
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.
SarahReedy
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SarahReedy,
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 | 11:59:27 AM
Re: Pricing
I doubt is was that well thought out :)
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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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.
Aloysious
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Aloysious,
User Rank: Light Beer
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.
Phil_Britt
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Phil_Britt,
User Rank: Light Beer
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.
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