Bad AT&T Ideas Are Contagious: UK's Vodafone Wants To Try 'Sponsored Data' Idea

from the ridin'-them-pipes-for-free dept

AT&T poured napalm on the network neutrality debate here in the States back in 2005, when then CEO Ed Whitacre proudly proclaimed in an interview he "wasn't going to let Google ride his pipes for free." Ed and most telco executives quite honestly believe that historically-pampered phone companies are entitled to an additional "troll toll" by content companies simply for the honor of touching the ISP network. Never mind that consumers and content companies already pay for bandwidth and (like Google) invest in infrastructure of their own, telco logic dictates that content companies get a "free ride" and must pay more. You know, because.

AT&T's attempts to double dip aren't just domestically dumb, predatory and dangerous, they seemingly have an infectious quality for overseas telcos looking for ways to make additional money for doing nothing, but who aren't gifted with AT&T's knack for truly obnoxious ideas. We've seen it in the way European telcos mimic AT&T's rhetoric in claiming content companies ride their pipes for free, and therefore really ought to pay an additional tax to the phone companies (again, you know, just because). Despite being such a bizarre, fundamentally flawed assumption, the concept carries a lot of traction in telecom circles, thanks largely to hired think tanks and PR flacks who go to great, great lengths to frame it as entirely reasonable.

Yet oddly, the "hey, give me more money for doing nothing" approach hasn't worked well, resulting in AT&T recently introducing their "sponsored data" idea. As we recently discussed, sponsored data involves certain large companies paying AT&T an extra fee to have their content not count against wireless consumer caps. While framed by AT&T as "free shipping" or a "1-800 number for data," it's simply more of the same idea, and potentially devastating for smaller companies and startups that can't afford to pay AT&T to get preferred listing in AT&T's promotional materials. AT&T's effectively imposing entirely arbitrary caps (based in no way on real-world economics or network congestion), then charging multiple times for the same bandwidth.

Not too surprisingly, AT&T's latest brain child has again had an infectious impact on overseas telcos. UK's Vodafone now says the company is interested in trying the sponsored data idea as well:
Vodafone is looking at offering sponsored data to its customers. The move would see customers agreeing to receive sponsored data on their devices in return for lower data bills. CEO Vittorio Colao revealed Vodafone's interest in sponsored dat this week. The CEO said he is closely watching US operator AT&T's recent move to allow sponsored data.
What Colao is watching for specifically is the regulator response to AT&T's sponsored data. If FCC boss and former wireless and cable lobbyist Tom Wheeler signs off on sponsored data as a form of "pricing innovation," that opens the door to the possibility that overseas regulators can be conned into thinking this is actually an innovative idea as well. It's worth noting that AT&T wanted to acquire Vodafone's wireless assets, but it's largely believed that AT&T's incredibly cozy relationship with the NSA has soured European regulators on the idea -- for now. After the European Parliament elections in May, it's very likely AT&T and Vodafone will merge to become one company, which can further help spread AT&T's bizarre and predatory logic worldwide.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Feb 13th, 2014 @ 2:17pm

    Basic infrastructure just doesn't belong into the hands of private companies, period.

     

    reply to this | link to this | view in thread ]

  2.  
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    Irving, Feb 13th, 2014 @ 2:25pm

    Wouldn't the easiest solution be for Google to just refuse, letting AT&T go ahead and block them?

    AT&T wouldn't last more than a week before it lost 90% of its customer base due to lack of ability to check mail, search the web, etc.

     

    reply to this | link to this | view in thread ]

  3.  
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    M. Alan Thomas II (profile), Feb 13th, 2014 @ 2:31pm

    If the amount paid by the content company directly offset my bill, that'd be . . . well, not fine, but better. Otherwise, as long as I wasn't going to go over the (arbitrary) cap anyway, it's meaningless.

     

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  4.  
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    Anonymous Coward, Feb 13th, 2014 @ 2:35pm

    Re:

    How about if they reduce that (arbitrary) "unsponsored" data cap a whole lot, like down to less than 1GB or so... your'e not really using that data... right?

    You see everybody thinks it wont affect them, until one day it does...

     

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  5.  
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    Karl Bode (profile), Feb 13th, 2014 @ 2:46pm

    Re: Re:

    Well yes, that "savings" is coming home to roost one way or another, either by further manipulation of the data cap, or new pricing layers by AT&T, or just a higher overall bill.

    You can also be sure that the money that say an ESPN pays to play along is somehow coming out of your pocket as well somehow.

     

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  6.  
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    Karl Bode (profile), Feb 13th, 2014 @ 2:49pm

    Re:

    Well the "genius" is that nothing's being blocked. If ESPN and DISNEY agree to AT&T and all of their apps bypass the cap (assuming consumers like this idea), other companies like Google are pressured to participate as well if they want equal footing. The real problem would be for smaller companies, developers or startups who couldn't afford to pay to play.

     

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  7.  
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    Anonymous Coward, Feb 13th, 2014 @ 3:04pm

    Re: Basic infrastructure

    I'm not sure why this is such a radical idea to most people. Basic infrastructure such as communications, water, power and gas are something that everyone needs and take huge investments to setup. Inevitably this is a massive gatekeeper against competition, so we get monopolies.

    Surely these are something the government should be running?

     

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  8.  
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    Anonymous Coward, Feb 13th, 2014 @ 3:06pm

    The answer...

    The answer as I said before in the Comcast article is to not let infrastructure companies sell retail service.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Anonymous Coward, Feb 13th, 2014 @ 3:10pm

    Dear Internet (not you, legacy clinger-ons and bureaucratic goverment types), we need a new Internet.
    Sincerely, the Internet.

     

    reply to this | link to this | view in thread ]

  10.  
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    Anonymous Coward, Feb 13th, 2014 @ 3:20pm

    Isn't "Sponsored Data" what repressive countries were trying to push at the International Telecommunication Union (ITU) meeting in Dubai, of the United Arab Emirates?

    It's almost the exact same thing, except AT&T is using artificially low "data caps", in an attempt to frame their whole diabolical plan as "voluntary" and "opt-in".

    If anyone choose NOT to "volunteer", they get hit on the head with the "data cap" club. AT&T uses this club to hit people with massive overages fees or denies access to services because their customers know using that service is out of their "data cap" league.

     

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  11.  
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    DannyB (profile), Feb 13th, 2014 @ 3:23pm

    The REAL answer

    You pay for your internet connection.

    Netflix pays AT&T for 'sponsored data' to get a preferential connections to you the consumer.

    Since Netflix's content is considered premium content worthy of preferential treatment, why shouldn't AT&T introduce a new fee to the consumer to get good access to Netflix content.

    Ahh, nothing like triple dipping.

     

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  12.  
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    Anonymous Coward, Feb 13th, 2014 @ 3:54pm

    not surprised really. every dumb idea in the UK goes to the USA and vice versa. it's to do with this 'special relationship' between Obama and Cameron!

     

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  13.  
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    Anonymous Coward, Feb 13th, 2014 @ 3:56pm

    Re: Re: Basic infrastructure

    Right, because if there's one organization we can trust not to abuse newfound power or make a complete mess out of something computer-related, it's the US government.

     

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  14.  
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    Anonymous Coward, Feb 13th, 2014 @ 4:03pm

    Re: Re: Re: Basic infrastructure

    right, as if private companies won't abuse powers they shouldn't have to begin with...

    you know it doesn't really matter *who* abuses their powers, because both will eventually, BUT a government run company has some distinct advantages, they don't have to run on a for profit basis, and they can be forced to invest in unprofitable areas. and *that* is why infrastructure doesn't belong in private hands. the potential for abuse is about the same.

    on a general note, this is not specific to the us government, I'm from germany and we have the same bullshit going on.

     

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  15.  
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    gDub, Feb 13th, 2014 @ 5:56pm

    Sponsored Data works for small companies, too

    I follow the industry, and Sponsored Data announced with a big insurance company, a medium sized MDAP, and a start-up mobile advertiser.

    Don't jump to conclusions before we see what actually happens in practice.

     

    reply to this | link to this | view in thread ]

  16.  
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    Anonymous Coward, Feb 13th, 2014 @ 6:30pm

    Re:

    This includes broadcasting monopolies.

     

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  17.  
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    gDub, Feb 13th, 2014 @ 9:30pm

    Do your homework, Bode

    Your article spouts about big companies paying to be featured in AT&T's promotional materials. I don't see AT&T promoting any content nor services running Sponsored, but I do see small companies adopting the new technology.

     

    reply to this | link to this | view in thread ]

  18.  
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    Anonymous Coward, Feb 13th, 2014 @ 9:51pm

    America really are a pox on the world.

     

    reply to this | link to this | view in thread ]

  19.  
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    Anonymous Coward, Feb 13th, 2014 @ 9:52pm

    Re: Re: Re:

    Ultimately it's an incentive for ISP's to provide inferior service for the non-sponsored internet.

    Since they are not being paid to do it, they have no reason to maintain network and router hardware necessary to connect to sites other than the sponsored ones, resulting in a degradation of performance.

    In theory that could metastasize into an arrangement where you pay only to access a particular site, such as $10 for Google, $10 more for Facebook... etc.

    That is the true meaning of net-neutrality, being certain that the internet, the whole internet, the good and the bad, is efficiently accessible.

    Going against net neutrality, is all about cost cutting (for the ISP) and control, anybody who thinks it's good for the consumer is either in denial, or has been drinking the kool-aid.

     

    reply to this | link to this | view in thread ]

  20.  
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    Peter, Feb 14th, 2014 @ 12:50am

    the telcos apparently don't think it to the end...

    Because "sponsored data" could go both ways. Google could pay the telcos for having sponsored data (that's the telcos reasoning) but if everyone wants so see youtube, google might have the idea, that they provide the full featured youtube at a decent speed only to telcos which *pay google*.

     

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  21.  
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    Ninja (profile), Feb 14th, 2014 @ 1:24am

    A legacy we should thank mr Alexander Graham Bell. Though I'm not sure the real inventor of the phone would have fared better...

     

    reply to this | link to this | view in thread ]

  22.  
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    ColinCowpat (profile), Feb 14th, 2014 @ 2:54am

    Content companies would need to bill customers to pay ISPs

    In the final analysis, the consumer pays. This whole scam is a magnesium flare to divert attention away from net neutrality.

    The funny thing I head this morning was that Comcast, at the request of the FCC, had a precondition from their NBC acquisition to obey net neutrality rules until 2018. Stupid or not? Why end date anything like that. It's like telling the Taliban the date they won't be confronted with any US troops in Afghanistan. I mean, what do you expect to happen if you're given a date beyond which you can gouge customers to your hearts content?

     

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  23.  
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    Anonymous Coward, Feb 14th, 2014 @ 7:53am

    So let me get this straight... I want to watch an ESPN football game on my iPad, and an advertiser is going to pay for my data fees? And, this is a bad thing?

    This is called advertising. Small start-up and large companies should have equally access to advertising. Should we not allow large companies to buy time for Superbowl commercials, because small companies canít afford to do the same?

     

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  24.  
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    ian waring, Feb 14th, 2014 @ 8:10am

    Response to: Anonymous Coward on Feb 14th, 2014 @ 7:53am

    So you think Disney want to hand their ESPN margins over to Comcast? Why would they want to do that? What would be the end result? Naive!

     

    reply to this | link to this | view in thread ]

  25.  
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    Cindie, Feb 14th, 2014 @ 10:42am

    AT&T Sponsored Data

    Let's put this in different context. I'm an entrepreneur and I build a road from point A to point B. I invest a lot of $'s to do this. This road allows the consumer to easily get to point B to get valuable goods. The consumer brings a lot of these goods back over my road and clogs it up not making it easy for others to travel the road.... To keep the road passable to others, I have to spend more to maintain it or to widen it. Who pays for these improvements? The Consumer or the business selling the goods? Take your pick. Someone's going to pay. In this ever growing liberal, "progressive" world of which I'd be certain this author, Karl--I believe is his name--is a part of, I would think he would be happy that business, would pick up part of the tab. Mr. Whitacre is right to want to capitalize on what he and others invested to build what is quite reasonably the backbone of America's economic power. For the foreseeable future, we are, you know, a capitalistic country.

     

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  26.  
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    John Fenderson (profile), Feb 14th, 2014 @ 12:56pm

    Re:

    "I want to watch an ESPN football game on my iPad, and an advertiser is going to pay for my data fees? And, this is a bad thing?"

    Yes it is, if your subsidy means that I will have crappier, more expensive service -- which seems like the most likely result.

     

    reply to this | link to this | view in thread ]

  27.  
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    John Fenderson (profile), Feb 14th, 2014 @ 12:59pm

    Re: AT&T Sponsored Data

    "Who pays for these improvements? The Consumer or the business selling the goods? Take your pick. Someone's going to pay"

    And right now, without this risky "sponsored data" plan, both the consumer and business pay for the improvements. What's wrong with that?

     

    reply to this | link to this | view in thread ]

  28.  
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    Niall (profile), Feb 14th, 2014 @ 1:41pm

    Re: Re: Re: Basic infrastructure

    Certainly it works better if one company owns the physical network, and others run the services - look at rail, phones or even gas (I think) in the UK.

     

    reply to this | link to this | view in thread ]


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