Senator Blumenthal Warns AT&T Not To Make Wireless Privacy A Luxury Option

from the the-illusion-of-value dept

Last week, we discussed how outlets like Reuters were making a big stink about a new proposal by AT&T to dole out “wireless discounts for advertising.” Granted as we pointed out then, that’s not really what AT&T has in mind. AT&T for years has been trying to craft a new industry paradigm whereby users who opt in to user surveillance and targeted ads pay one price, and those that opt out to protect their privacy pay significantly more.

It’s something the company already has experimented with. AT&T for years charged its broadband subscribers up to $500 more annually to opt out of behavioral ads (but not data collection and tracking). AT&T, in effect, was trying to make the illusion of privacy a luxury option. It only stopped while it was attempting to gain regulatory approval for its merger with Time Warner.

AT&T says its latest wireless “discounts” are still a year or more out, but the company carefully leaked word of them to Reuters, hoping (successfully as it turns out) the outlet wouldn’t include essential context.

Senator Richard Blumenthal appears to have noticed what AT&T was up to however, and sent AT&T CEO John Stankey a letter (pdf) asking for more details on what AT&T has planned, and warning the company not to try and make privacy something consumers have to shell out significantly more money for:

“AT&T should not hold privacy above consumers? heads for additional cost. Rather than a benefit, it is clear that AT&T is seeking to legitimize more intrusion into consumers? lives and more aggressively commoditize subscribers. AT&T?s announcement would create a ?pay-forprivacy? standard in the increasingly consolidated phone market, driving prices up for those who want to opt out. You also acknowledge that an ad-supported wireless plan would cross-fertilize its AT&T data broker and ad targeting products, adding to the race to the bottom that exists in the internet ecosystem.”

The problem of course is that AT&T’s already framed the debate and prepared the press to call this a “discount,” even though that’s absolutely not what this is. AT&T has also lobbied (quite successfully) to crush nearly every attempt at a federal or state privacy law, however modest. Especially if proposed legislation involves any restrictions on charging consumers a premium to opt out of data collection and monetization. And because AT&T lobbyists have also successfully lobotomized the FCC, don’t expect regulators to inject themselves into the equation any time soon.

That leaves you relying on the wisdom and power of “the market” to organically inhibit the idea of privacy as a luxury option. But because the DOJ and FCC just rubber stamped the Sprint/T-Mobile merger, there will soon be fewer competitors than ever, meaning less incentive to behave. And because consumers (thanks to the press) will genuinely view this as a “discount,” that means limited pressure on an already dysfunctional and overwhelmed Congress. That leaves you waiting on AT&T’s incompetence to derail such an effort. And while that’s certainly possible given recent AT&T history, that’s neither a guarantee nor the way you craft effective national privacy safeguards.

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Comments on “Senator Blumenthal Warns AT&T Not To Make Wireless Privacy A Luxury Option”

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hij (profile) says:

A letter is nice

Our representatives are very good about sending letters. It is a great way to get attention without actually doing anything. Between a President who thinks that he can govern using executive orders and representatives writing stern letters the people’s business is not a priority.

(Disclaimer: My rep. is a member of the so called Freedom Caucus and just loves to tweet out copies of all the letters he sends out rather than doing his damn job.)

Anonymous Coward says:

Re: A letter is nice

the letters he sends out rather than doing his damn job

When you (the rep) are fairly certain (from your position inside the machine) that legislation would be a dead letter, doesn’t a live letter threatening do about as much as you are still able? Dare the receiver to call your bluff?

That One Guy (profile) says:

'Trust me' said the proven liar

‘Leave it to the free market’ is rather like trickle down economics in that it works great so long as you’re at the top, less so as you go down.

There are certain industries and fields where due to how the industry is set up and the barriers for new players heavy regulation to maintain a level playing field is warranted, and internet access, which is all but required to engage in modern life and is only going to become more important as time passes is very much one of them. Unfortunately thanks to corrupt and/or cowardly politicians it’s been turned political and all that the would-be regulators care about is getting their cut from the profits gained from screwing the public.

Sharur says:

Re: 'Trust me' said the proven liar

I disagree. "Leave it to the Free Market" works so long as:

  1. You actually have a Free Market (which we don’t, and we won’t for a while. For starters we don’t have relevant competition, at least in the US).
  2. Your desires align with a "weighted" majority of the market. A possible biased sample, I’ve never been able to talk to a non-tech person(i.e. a person who didn’t work in an IT or computer-related field) in real life who cared about internet privacy or targeted ads (as opposed to the presence of ads in general, regardless of their content). I can’t stop talking to people who want to lower the cost of their internet or cell phone plans.
Reasonable Coward says:

Wait...isn't this a good thing?

I can fault AT&T for many things, but I don’t blame them for this.

Of course, it would be best if data collection were outlawed, period. But, until and unless it is, which would you prefer: a company that collected your data and gave you no option to opt-out, or a company that at least offered you an option for improved privacy, however overpriced?

For years I have wished that Google, Facebook, and other companies would offer a paid option in exchange for not tracking me, or collecting/selling my data. They don’t, so I minimize my use of Google and avoid Facebook altogether.

I assume that selling customer data is a big revenue enhancer for ISPs. It seems reasonable (Economics 101) that to give up this revenue, a company is going to want to make up the difference by increasing prices.

Again, the problem is that this insidious data collection should be outright prohibited. If that happened, then the loss of revenue would drive prices up for everyone. But in today’s reality, at least privacy enthusiasts have an option.

The main downside of the AT&T strategy is that if it becomes commonplace, then it will create a new fault in the digital divide, whereby people who can afford privacy will be able to get it, and those with lower incomes will remain fodder for data marketing.

I agree that privacy should not be a "luxury option." But that sure beats the companies for which privacy is no option at all.

That One Guy (profile) says:

Re: No, no it is not

You can do without Google and/or Facebook, and take some simple steps to block any tracking they might do when off of their platforms, but when your ISP is the one doing the tracking the only way to avoid that is to not do business with them at all, and thanks to the absolutely amazing competition in the US’ ISP market for many of their customers they either get internet service from them or they don’t get internet service at all.

It’s understandable that they want more money, but the same could be said of organized crime or a street-level con-artist, and in both cases the fact that you can understand why they might want to squeeze every cent possible out of their ‘customers’ does not in the slightest make their desire acceptable or not worthy of condemnation.

Reasonable Coward says:

Re: Re: No, no it is not

Ah, but you didn’t answer my question: "which would you prefer: a company that collected your data and gave you no option to opt-out, or a company that at least offered you an option for improved privacy, however overpriced?"

So are you saying that it would be better for AT&T to collect your data and not give you any choice in the matter, rather than them offering you a paid option for no data collection?

That One Guy (profile) says:

Re: Re: Re: No, no it is not

If I didn’t ‘answer your question’ it’s because it’s a loaded one from the start, like asking ‘would you prefer that someone shoot your leg, or cut off one of your fingers?’, leaving out ‘neither is acceptable, and accepting either not only allows them to normalize it it just undermined any ground you might have had to object to the other.’

There’s also the issue that, as I pointed out, your premise is flawed in that you can avoid data collection by Facebook and/or Google and still make use of the rest of the internet, whereas the same is not true for your ISP. Google/Facebook collecting data to use/sell may be bad, but it’s not nearly as bad as an ISP doing so and them adding in a ‘premium’ so that they (pinky promise) don’t collect your data is not making that any better.

If you’re going to be in favor of a company pinky promising that if you pay them extra they won’t sell the data they’re collecting on you you may as well argue that quality testing is a real drag on company profits but that’s okay because the company will be offering a special ‘premium’ tier of service where they will make sure that the product they are selling actually works, however if people don’t want to pay the extra they can buy the ‘This probably works’-level product and risk it.

Reasonable Coward says:

Re: Re: Re:2 No, no it is not

First let me address the "pinkie promise" issue. Yes, I agree that it’s a matter of trust, and ISPs haven’t earned a lot of trust. For the purpose of this discussion, let’s assume that they honor that commitment, because if they don’t, then we would both agree that paying extra to obtain some measure privacy, and then having that contract violated, is 100% bad.

I disagree with your characterization of my question, because what I am claiming is simply that AT&T offering an option for paid privacy is better than them not offering that option at all. It seems that you don’t like either option, which I accept, and can somewhat understand. But what I can’t understand is why offering this option isn’t seen as a good thing, since some people (maybe not you) who do care about privacy now have a choice, whereas other ISPs don’t offer such a choice.

In other words, if AT&T didn’t offer paid privacy, then this Techdirt article wouldn’t have been written. Now they offer the option, and suddenly this is an example of badness? How? Why isn’t the article about how Comcast, Verizon, et al are bad for not offering any option to improve privacy at any price, whereas AT&T does offer one?

I think what is going on here is that many of us are infuriated by the lack of privacy in technology, but it’s an easy thing to ignore, until something like this AT&T thing comes up. And then it resurfaces the issue and gives us a chance to gripe again. So AT&T is taking the brunt of our anger, even though in this case, they are actually offering something better than, say, my ISP, which is Verizon.

You keep bringing up the matter of Facebook and Google being different than an ISP. That is true, but beside my point. I only brought up Facebook and Google as a way of relating that I would be interested in seeing paid privacy options on those platforms.

The fact that I can’t avoid my ISP (save for VPN/Tor) doesn’t relate to my main point, which again, is that having an option is better than not having one.

At the risk of trivializing the matter, let me use a pizzeria analogy. Let’s say you prefer a gluten-free diet, and there’s a pizzeria that has never sold gluten-free pizzas. One day they start offering a new gluten-free crust, but those gluten-free pizzas will cost $5 more. Isn’t it an improvement that they started offering this option, even though it costs more, and even though you personally might find the $5 too high a price?

As to your point about quality testing (QA): This already happens. It’s called an extended warranty, and you pay more to get a longer warranty. And it’s basically the same thing as with the privacy issue, in that we would all hope that companies would stand behind their products with a nice, long, standard warranty included in the price, but this rarely happens, and so instead we get short warranties and have to pay extra for an extended warranty. Not ideal, but better than being given a short warranty with no option for an extended warranty.

That One Guy (profile) says:

Re: Re: Re:3 No, no it is not

In other words, if AT&T didn’t offer paid privacy, then this Techdirt article wouldn’t have been written. Now they offer the option, and suddenly this is an example of badness? How? Why isn’t the article about how Comcast, Verizon, et al are bad for not offering any option to improve privacy at any price, whereas AT&T does offer one?

If I deliberately light a building on fire I do not deserve applause for fighting valiantly to put the fire out, because the only reason the fire existed was due to my actions. A person or company does not deserve praise for ‘solving’ a problem that they created.

Running with the pizzeria analogy it’s not a case of them charging more for something new, rather it would be more like intentionally letting the dough get stale, the cheese moldy and the ingredients just shy of food poisoning levels and then when people complained offering them fresh pizzas for extra money. The only ‘product’ AT&T is offering here is the ability to opt-out of something that they chose to do, as privacy was the default(well, sorta…) until they decided to change that.

Reasonable Coward says:

Re: Re: Re:4 No, no it is not

After re-reading the original article and the Reuters article, I will admit that I was premature on my judgment. What I need is to see the actual pricing (AT&T and their competition) to know whether this is a good thing, or a bad thing.

Neither of AT&Ts options offers good privacy — it’s bad privacy vs. very bad privacy. If the "Bad Privacy" cost tier is the same as the current default pricing, and the new "Very Bad Privacy" tier is lower cost, then I would still claim that this is a good thing: it gives some very cost-conscious consumers a cheaper entry point.

But if they play pricing tricks such that customers get "Very Bad Privacy" for the same price of today’s "Bad Privacy," then this is a way to hide a price increase. In that case, whether this is good or bad depends on what the "competition" is doing.

For example, if Verizon, Comcast, and AT&T all offer similar pricing for similar levels of lack of privacy, but AT&T additionally has a cheaper tier, then that’s good. On the other hand, if AT&T prices their "Very Bad Privacy" tier at the same level as other ISPs’ "Bad Privacy" tiers, then this is a bad thing.

Sorry for not explaining this better.

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