AT&T's New Scheme To Double Charge For Data: Call It A 1-800 Number For Internet Content

from the ignoring-how-the-internet-already-works dept

Some of you youngsters may not remember what really kicked off the big “net neutrality” fight over the past few years. It was back in 2005, when then AT&T CEO Ed Whitacre suggested that internet companies should pay a second time to reach users. This was particularly nefarious. What Whitacre was suggesting was actually that AT&T get to double charge everyone. That’s because the way it was (and still) is that everyone pays for their own bandwidth — including the big internet services like Google. However, the way Whitacre was describing it, the bandwidth you got only paid for half the transit. That is, you only paid for your bandwidth from your premise to “the cloud” but not back out to any end machine. That that bandwidth was paid for by whoever owns those end machines was entirely ignored. So the plan was not just that Google would pay for its own bandwidth, but that Google would also pay for your bandwidth to get Google to your computer (ignoring that you already paid for it).

That didn’t go over so well with people, and got particularly ridiculous when Mike McCurry, running an AT&T lobbying effort, insisted that Google didn’t pay a dime for its bandwidth. For rather obvious reasons, he refused my proposition that he agree to pay Google’s bandwidth bills.

Either way, it appears that the brilliant minds at AT&T have been trying to devise a new way to present such a plan that doesn’t leave them so open to charges of being greedy double chargers — and they may have found it by focusing on the mobile world, with their new love of “tiered” and “capped” plans that limit how much bandwidth you actually get. What they’re going to do is charge app makers a fee to offer their services to you in a way that the data doesn’t count against your cap. They describe it as an “800 number for the mobile internet.”

“A feature that we’re hoping to have out sometime next year is the equivalent of 800 numbers that would say, if you take this app, this app will come without any network usage,” Donovan said on the sidelines of a mobile-industry conference here. It’s far from clear how willing technology companies would be to pay wireless carriers for data use. Mr. Donovan said there was interest from companies who could use the feature to drum up new business from customers wary of using data-heavy services like mobile video.

This is nefariously brilliant. People associate 800 numbers with toll-free phone calls, so it’s kind of like that… except it isn’t anything like that at all. It’s just a way to get companies to pay for the data connection you’re already paying for. But the end result is exactly like what Whitacre wanted five years ago: get the app providers to pay double for bandwidth. Karl Bode summarizes the whole ridiculous plan as only he can (via that link above):

The end result is the same, with AT&T imposing bizarre tolls on content companies to obtain preferred customer status, picking winners and losers while retaining power in the wireless ecosystem.

It’s an idea we’re sure AT&T will pitch as a cost-saving endeavor for consumers, but given this is AT&T, you’d be naive to think cost savings will be in the equation. You’ll still pay the same data rates, content companies will now just pay a fee to obtain preferred “reduced cap impact” status, then pass the higher development costs on to you. It’s a ridiculous and dangerous idea, and the fallout will likely be similar to AT&T’s “free ride” comments. AT&T executives either don’t care how bad these ideas make them look, or don’t realize it thanks to too many isolated meetings at headquarters packed with telco-think yes men.

Eventually you start to think that AT&T executives should just stop thinking before they hurt someone or themselves. If AT&T put half as much energy into running a top-flight network with quality support as they did cooking up hare-brained troll toll schemes — they might just stop coming in last place in all major customer satisfaction studies.

This is really just another reason why the telcos are pushing so hard to move users into unnecessary tiered plans — because they can’t pull off scams like this on unlimited data plans nearly as easily.

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Companies: at&t

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Comments on “AT&T's New Scheme To Double Charge For Data: Call It A 1-800 Number For Internet Content”

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DannyB (profile) says:

So it never was about limited bandwidth

I see AT&T was using a two pronged strategy to get to double charge this time.

1. Whine about there not being enough bandwidth, therefore unlimited plans must go away, and they must cap your bandwidth.

2. Get the other end of the connection to pay to give you more bandwidth.

But that means that there really IS enough bandwidth, and they just wanted to extort more money for valuable traffic traversing their network.

DannyB (profile) says:

Quick Tethering Quiz

Which costs more and which puts more stress on their network:
1. A 1 kilobyte packet transmitted between my phone and the tower.
2. A 1 kilobyte packet transmitted between my phone and the tower.
(Please note in the case of (1) the packet was from my mobile browser, and in the case of (2) the packet was from my laptop browser.)

If I have a 2 GB monthly data limit, which of the following activities will use more data on the network:
1. Downloading 2 GB of data to my mobile phone?
2. Downloading 2 GB of data to my laptop?


I have an interesting situation. My water utility sells me metered water for washing dishes, watering the lawn, showering, and other limited purposes.

The utility offers a Tasting plan for an additional monthly charge. Under this plan, I am allowed to use the water also for cooking and drinking. (Even though my water use is metered, and each gallon of water for cooking and drinking is delivered by the same pipes!)

Dear customer: our records indicate that you have been using water for cooking and/or drinking. Please upgrade your water rate plan to our convenient Tasting plan that allows for this usage. If you continue to use water for cooking and drinking, you will be signed up for the Tasting plan automatically.

I think the Tasting plan is just a fee that they made up. It isn’t a service they provide. They just want more money from me. I’ve got a workaround of using a container to obtain water from another room for the purposes of cooking and drinking.

Some people shout: Theft of service!
But what service? They’re already delivering water to me, and metering it, and I’m paying for it, and its delivered by the same pipes!

Some people shout: but you signed an agreement and using the water for cooking and drinking is a breach of that agreement!
Ask a lawyer about the term “unconscionable contract”.
Nobody in their right mind would agree to this if they had any actual choice in the matter. Just because they have the power and can force you into paying this ridiculous fee or doing without doesn’t make it right.

I say that this Tasting “service” is no service at all, it’s just a fee for delivering nothing at all extra to me. It’s a case of the utility wanting something for nothing. Yet people seem to think it is somehow wrong to use the water I’m paying for for drinking or cooking unless I sign up for the more expensive Tasting plan.

In order to add legitimacy to their Tasting plan, the water company says that the Tasting plan is actually delivering something: it includes an additional 2 Gigabytes of water per month, giving you 4 total Gigabytes of water.

But what if I only need 2 Gigabytes of water and therefore my existing monthly 2 Gigabyte plan is plenty? The water company already charges $10 per extra Gigabyte of water I use over the limit. So if I used excess water, it’s not like they wouldn’t get paid.

Furthermore, once I sign up for the Tasting plan, they don’t make any distinction between water used for drinking/cooking and water used for other purposes. I could use 3/4 of it for tasting, and 1/4 for bathing/dishwashing. Or any other split. Or all of it purely for tasting. So then if I paid for Tasting and used only 2 Gigabytes of water, which I already had paid for, then why did I need the Tasting plan?

I seem to be very confused about stealing water for tasting. Someone please set me straight.

Anonymous Coward says:

Push Back

I would do as a developer one or more of the following to push back against this.

I would design my apps to detect the bandwidth app and deliver ads for users that had it to offset the cost of those who are using it and offer “remove the ads” and/or increased functionality with the non-800 concept app removed to entice consumers not to buy into the concept and generate the additional revenue to offset the added costs with the advertising for those that choose to buy into the program.

Anonymous Coward says:

This is nothing but an entrepreneurship killing agenda.

1) pass bandwidth cost to developers
2) developers initially foot the bill so they gain users
3) only big developers can foot that bill
4) now only big developers are left on the platform
5) more big company “partners” on the platform
6) less chance for the 15 year old to learn and make a couple bucks from developing an app, or even the 20-something who wants to create a mobile app startup

I don’t even get how this benefits AT&T in the long term. But that must be it, CEO looking out for number 1.

Josh in CharlotteNC (profile) says:

Doomed to fail

AT&T, if it actually puts this in place, is intentionally making their network less efficient.



Instead of simply tracking how much data Bob is using, now they also have to track whether that data came from a “free bandwidth” app or not. Instead of trying to make their network more efficient, they are deliberately adding inefficiencies.

Then there are some other problems. How to actually accomplish this technically? I see a few possibilities.

1) Have the app set some type of flag in the packets it sends
2) Have the phone set a flag on the packets it sends from an approved list of apps.
3) Have a list of destination URLs/IPs where approved traffic going to/from doesn’t count.

Maintaining #3 would be a nightmare. People will quickly discover #1 and #2 and exploit them, either by writing apps that do so without paying AT&T’s toll, or jailbreaking their phones to do it.

John Thacker (profile) says:

I find it hilarious the articles that pretend that Tier 1 networks like AT&T/SBC charging for transit of bandwidth from other networks is a new thing.

The first Techdirt article isn’t related to end-user charging for data, it was simply a threat by AT&T to reconsider its peering policy based on certain downstream providers consuming more bandwidth.

Comcast pays Level 3 on a bandwidth basis for transit to certain places on the Internet. So does British Telecom.

It’s amazing how people think that free peering exists as anything other than voluntary agreements that are in both networks’ mutual interest, and that they don’t realize that the threats (and realities) of depeering have occurred, and that keeping those threats legal and possible is responsible for helping the Internet function.

MikeVx (profile) says:

Looking to dump AT&T, and this helps

I’ve been looking to ditch AT&T over the insane price I’m being charged for just voice, this whole data thing is just Twilight-Zone stuff.

I’m looking into Republic Wireless. Apart from downloading apps, my data footprint is so small that none of the normal plans from the big carriers is justifiable.

For the people whose phone is the only computer they use, this whole situation looks too out-suck a black hole.

Anonymous Coward says:

The problem with the way all internet access is purchased is with the way in which it is purchased. The way it is handled now, you pay a flat rate for a certain bandwidth (speed) versus paying for usage. This isn’t fair to casual users because they are paying a higher per megabyte charge than heavy users. This would be the equivelent of getting free gasoline and paying a flat rate to drive a certain speed on the highways. Instead people should be charged for the amount of data they transmit/receive. Heavy users negatively effect the bandwidth for the rest of us, just like heavy users of gasoline affect gasoline prices by driving demand up. There is no supply and demand economics currently in place to affect internet consumption. People don’t think about how their consumption affects society because it does not cost them more to download more content.

Rich Kulawiec (profile) says:

Doomed to fail

Instead of simply tracking how much data Bob is using, now they also have to track whether that data came from a “free bandwidth” app or not.

And here, you have hit on one of the major philosophical problems with ATT, among others. Their long, long legacy as a monopoly telco means that they’re not focused on providing services; they’re focused on generating billable events. (h/t to folks like Bob Frankston, who set me to thinking about this a while back)

This focus means that they’ll spend ENORMOUS amounts of money in creating, storing, measuring, promoting billable events…even when the best thing to do is to just skip the entire exercise. If it can’t be metered (and charged for) then as far they’re concerned it doesn’t exist.

This is also why they do everything possible to maintain artificial scarcity — because it’s easier to justify metering and charging for limited commodities. (If bandwidth were abundant, then everyone could see that it’s too cheap to meter.)

Anonymous Coward says:

‘because they can’t pull off scams like this on unlimited data plans nearly as easily’

especially as it has been shown that those on ‘unlimited data plans’ have no effect on the connections of those that dont, and that in itself is just an outright con to charge more money for something that isn’t costing a dime more to provide!

Falconman (profile) says:


Call your cable company and complain…A LOT!! I do all the time and I constantly request ala-carte pick and choose your channels. I get sick of having to flick over the GARBAGE channels just to get the ones I want to see. I have a severe case of red bottom over getting severely spanked by the bills I get paying for GARBAGE I do not watch nor want.

DJ Sarver (profile) says:


Just wait.. I was unknowingly hit with extra charges ($30/mo extra) because I was using a smartphone, even though I never once used the services that a smart phone is capable of, not to mention I had been using said phone for some time. People question why I would have a smartphone if I’m not going to have a data plan; enter WiFi! But that would take money away from the phone companies, and we wouldn’t want that! These phone companies are beginning to wreak of tyranny.

unkwon says:

At&t schemes

I work tech support for At&T and they are currently in the process of force migrating customers over to their new uverse service which mind you is a joke. At&t is the only company I have ever worked for that I felt was actually TRYING to scam their customers. They could give 2 sh*ts less about their customers. Every single “Customer saving” thing they come out with is only to save them money. Heck I get 20-30 calls a day where they have NEW customers that signed up that NEVER got the promo discount that was promised and get scammed out of never getting it. Its freaking pathetic the way this company treats people but At&t has been this way from the start. The government needs to step in and help its people out and crack the whip on these bast*rds before it gets really out of hand.

apexplus2 (profile) says:

Couldn’t agree more. The “Saruman’s tower” mentality of the telcos is rather poorly suited to digital economic development (outside of their own, of course). As (I believe) Scott Bradner once wrote, the telcos in the ’90s were happy to lease him circuits–which he and others used to build the Internet under their very noses. They had NO CLUE what he was doing; just as they have no clue what to do now–other than continue their parasitic ways.

But of course these are the benefits of monoploy….

Anonymous Coward says:


Is this satire or do you really like spouting off about topics you know nothing about. Don’t be brainwashed your internet doesn’t slow down because I watch more internet TV than you its because your provider would rather spend its time and money trying to fuck you than provide adequate architecture. Don’t buy their bullshit.

If I download 100gb everynight between 3 and 6 am it effects no one. If everyone in the neighborhood uses 1 gig a month a piece but are all on between 8 and 9 pm the network grinds to a halt. Its not about bandwidth hogs stealing your resources its about providers not providing for their peak concurrent users. If they can not provide quality service to 100 people at a time they shouldn’t sell 200 people internet on the same pipe.

Anonymous Coward says:


And if Google paid for the service, they wouldn’t pay the same amount that a consumer is being force to pay. They’d probably pay 1/1000th the cost that a consumer pays, because, aside from volume pricing, they just wouldn’t pay the same amount that we do.

Now, if AT&T were to offer consumers the same rates that they would offer Google, maybe we wouldn’t be as bitchy!

Josh in CharlotteNC (profile) says:


Instead people should be charged for the amount of data they transmit/receive.

I have no problem with this, assuming certain things:

-It reasonably reflects data transmission rates (which are really cheap).
-It is not priced to discourage competition from the network providers other businesses (example – cable internet priced to discourage online video).
-Rates will adjust as the market adjusts ($10 for 100GB now, but in 5 years when the network has expanded and sped up it might be $5).

But what we’ve seen with every proposed plan by the major telco/cableco is none of those things. They are pure money grabs and blatantly transparent in their desire to kill competitors.

Heavy users negatively effect the bandwidth for the rest of us, just like heavy users of gasoline affect gasoline prices by driving demand up.

Gas prices go up because there is a finite amount of oil on the planet that can be refined into gasoline, and its getting tougher and harder to get at the remaining portions. While there is technically a finite amount of bandwidth at any given time, bandwidth gets cheaper as technology improves.

There is no supply and demand economics currently in place to affect internet consumption.

Yes, but not because of what you say. There’s no supply/demand pricing because nearly everyone is stuck picking from a few entrenched monopolies/duopolies to get their internet access, and those companies all have similar rates and limitations.

Ed says:

Instead people should be charged for the amount of data they transmit/receive.

If I am to be charged for the amount of data I transmit and OR receive, then HOW do I remove the billing for the ads being sent to me? I never asked to receive them (like garbage channels) now you say that I should Pay to receive them? Hmmmm… Do you work for / paid by AT&T /Comcast?

nYdGeo says:


How very true. Worse, for every 100 intelligent people that may see through stuff like this, that don’t bite, don’t mindlessly accept whatever crap they are fed on pretty paper plates, there are better than one million intelligent sheep-people that should know better but don’t (or worse don’t care) due to a combination of years of training/brainwashing by modern marketing and the, “I can’t be bothered with anyone or anything that’s not…well, me!” attitude that by far most modern citizens are now infected with.

If we look at total satisfaction stats, cell providers rank just below the rack and having one’s eye teeth removed with pliers and a tea spoon. Every one of them has more complaints files against them than Carter has little pills. The main problem is of course that they don’t care. They don’t have to change, to be fair, or to do anything right. They have us by the short hairs; we’ve become too dependent on them and they know it.

Moreover, through more of that careful, brilliant marketing, idiots out there everywhere now consider their cell phone to be a fashion and/or status statement. Hmm, I love my old, slow, kinda crappy Evo 4G. However, the day that I ever get to the point where I believe that my cell phone, my watch, the car I drive or whose jeans I buy defines me in any way that actually matter, I’ll shoot myself in the head and spare the gene pool the embarrassment.

Thank you for your time.

Anonymous Coward says:

Doomed to fail

Maybe my cynicism is getting the better of me, but this looks like something that they could bill for while actually doing nothing at all – the amount of bandwidth would likely be so small as to make no noticeable difference, anyway – double-dipping with 0 overheads other than reconfiguring the billing system

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