AT&T Just Showed Us What The Death Of Net Neutrality Is Going To Look Like

from the not-with-a-bang-but-with-a-whimper dept

For some time now we've warned how the FCC's decision to not ban zero rating (exempting some content from usage caps) was going to come back and bite net neutrality on the posterior. Unlike India, Japan, The Netherlands, Norway, Chile, and other countries, the FCC crafted net neutrality rules that completely avoided tackling the issue of usage caps and zero rating. Then, despite ongoing promises that the agency was looking into the issue, the FCC did nothing as AT&T, Verizon and Comcast all began exempting their own content from usage caps while still penalizing competitors.

Fast forward to this week, and AT&T has delivered what may very well be the killing blow to net neutrality thanks predominantly to the FCC's failure to see the writing on the wall.

AT&T this week is launching its new "DirecTV Now" streaming video service. According to the full AT&T announcement, the service offers various packages of streamed TV content ranging from $35 to $70 per month. Thanks to AT&T's looming $100 billion acquisition of Time Warner, AT&T's even throwing in HBO for an additional $5 per month, the lowest price point in the industry. Though a bit hamstrung to upsell you to traditional DirecTV (two stream limit, no 4K content, no NFL Sunday Ticket, no DVR functionality), all told it's a fairly compelling package for cord cutters.

But somewhat buried in AT&T's announcement is the long-expected confirmation that this new service won't count against usage caps if you're an AT&T wireless subscriber:
"And, if you’re an AT&T Mobility customer, DIRECTV will pick up the tab for data to help you achieve all your binge-worthy goals. Data Free TV means you won’t use your AT&T mobile data for watching DIRECTV NOW or FreeVIEW in the App. Fullscreen will also cover your data for streaming in the Fullscreen App on the AT&T mobile network."
For consumers who have no idea what zero rating or net neutrality even is (read: most of them), this sounds like a great idea. Most don't know that usage caps are an entirely-arbitrary construct completely untethered from network or financial necessity. As such, they believe they're getting something for free. This collective illusion means fewer annoyed users, which means less political pressure on the FCC, which is why the FCC failed to act. The problem, as we've noted time and time again, is that AT&T is violently distorting the open market and giving its own content a distinct and decidedly unfair market advantage.

Because most consumers either aren't bright or informed enough to understand this doesn't mean it's not happening all the same.

In addition to existing offerings by Dish (Sling TV) and Sony (Playstation Vue), the "over the top" market is about to get flooded with an absolute torrent of live TV streaming competitors including Apple, YouTube, Hulu, and Amazon. Ideally, these services would all compete with DirecTV Now based on quality and pricing. But under AT&T's new zero rating umbrella, all of those services will count against AT&T's usage caps, while DirecTV Now won't. Owning the pipe and the content will protect AT&T from the full brunt of increased competition in the space.

This is precisely the sort of "new normal" AT&T has spent the last decade trying to build, and exactly the sort of future net neutrality rules were supposed to help us avoid. And while the current Wheeler-led FCC recently finally acknowledged that it now understands this sort of behavior is anti-competitive, it's too little, too late. There's every indication that Trump's new FCC intends to not only gut net neutrality, but the FCC entirely. Trump's telecom transition team is filled to the brim with telecom-sector cronies who can't even admit telecom monopolies are real. Large ISP executives and investors are thrilled.

With no (or unenforced) net neutrality rules and a toothless FCC, you can expect all of the incumbent broadband ISPs to follow AT&T's lead, while folks like Trump telecom advisor Jeffrey Eisenach regurgitate telecom sector think tank pieces trying to claim that zero rating is a huge boon to consumers. These are men and economists for hire who'll breathlessly inform you they adore "free markets" and open competition, while simultaneously working to thwart competition at every turn -- whether it's dismantling the level streaming playing field with zero rating, or letting telecom giants literally write abysmal telecom law.

Those who have actually paid attention to net neutrality realize this may very well be the beginning of the end for the idea -- or at best a very long, dark and unfortunate detour off of the path -- with the ultimate irony being that because zero rating is seen as little more than "free stuff" by many misinformed consumers, net neutrality's death knell will arrive to thunderous public applause.

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  • identicon
    Anonymous Coward, 29 Nov 2016 @ 11:04am

    it would have happened anyway because of what Trump is already starting to do to the FCC and to Net Neutrality. if Wheeler had done something about 'zero rating', it would have been abolished along with everything else the FCC has accomplished. people dont yet realise yet that the financial crash was purposefully orchestrated and everything that has happened since then has been to protect those individuals and companies from doing or losing anything at all. everything has been done, bit by bit, to turn the planet into a giant corporation. we are fast becoming a Capitalist Planet, which will be almost impossible to change because every supposed democratic country is now doing what the 'undemocratic/communist' countries do and were condemned for doing, SPYING ON EVERYONE, EVERYWHERE, FOR EVERYTHING ALL THE TIME!

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

    • identicon
      Anonymous Coward, 29 Nov 2016 @ 11:17am

      Re:

      " financial crash was purposefully orchestrated "

      They always are. This is a core and rudimentary evil power desired and granted by central and fractional banking systems. We have an endless supply of incorrectly educated economists.

      Money is power... you will bleed before you pry it from the hands of the Federalists or Central Banker types.

      http://foundersquotes.com/founding-fathers-quote/a-private-central-bank-issuing-the-public-cur rency-is-a-greater-menace-to-the-liberties-of-the-people-than-a-standing-army/

      "A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army." ~Thomas Jefferson

      Every step this nation takes is usually a step away from the Founders and with every step we lose a little more liberty.

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

    • icon
      Ninja (profile), 29 Nov 2016 @ 11:19am

      Re:

      All hail Buy 'n Large!

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

    • identicon
      Anonymous Coward, 30 Nov 2016 @ 10:33am

      Re:

      Funny how Trump gets the blame for this all the while this is happening under Obama's watch. Now Trump's admin may do no better, but your logic is quite silly.

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

      • icon
        The Wanderer (profile), 2 Dec 2016 @ 4:10am

        Re: Re:

        Where do you see the article saying Trump is to blame for this?

        It's true that the Obama administration hasn't been doing enough to stop this; I get the impression that that's largely because of the extent of the political opposition from those who object to anything the Democratic Party supports, but it's still the case.

        However, the Obama administration's FCC - as represented by Tom Wheeler - also hasn't been outright opposed to the idea that there's anything that even might need stopping; from what little I'e been able to see, Wheeler even seems to have been leaning more and more in the direction of accepting that it's a problem and perhaps eventually taking action.

        All indications thus far are that the Trump administration will be outright opposed to the idea that there's anything to fix, and will try to roll back the other good things that the Obama-administration FCC has done.

        Saying that a new decision-maker X will be worse on a subject than the current decision-maker Y does not equate to blaming X for the current state of Y.

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

  • identicon
    Anonymous Coward, 29 Nov 2016 @ 11:08am

    Rules change

    I fully expect that if the telecoms have their way now, long term it will hurt them more.

    Eventually people will get pissed off having to pay overages to watch cat videos. They will vote in large numbers and the FCC will be forced to level the playing field.

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

    • icon
      ShadowNinja (profile), 29 Nov 2016 @ 11:31am

      Re: Rules change

      I wish it would backfire in their face and get them classified as utilities to stop this kind of rampant abuse, but I highly doubt it.

      Just look at how much partisan politics turns people against their own self interests (such as Republican politicians supporting monopoly laws for incumbent ISP's, which screws their own residents out of more affordable/faster internet connections).

      All the splintering of the media and how the ISP's are the same people who own much of the media is making it much harder to fight against them to.

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

    • icon
      jupiterkansas (profile), 29 Nov 2016 @ 12:17pm

      Re: Rules change

      You really think voting's going to make things better?

      They won't have to pay overages to watch cat videos, because AT&T will have a no-overage cat channel with videos from AT&T's exclusive content library.

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

    • identicon
      Anonymous Coward, 30 Nov 2016 @ 9:12am

      Re: Rules change

      I'm not so sure. As the article pointed out, the vast majority of the public is being hugely misinformed and celebrates actions that are not in their benefit because of pretty wording and a nice bow.

      Don't get me wrong, I want what you are saying and I'll try and be as optimistic about it happening, because it very well could. I just don't know anymore and with how fast false info is spreading, the masses could very well remain in the dark.

      I hope you're right though, I really do.

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

  • icon
    Ninja (profile), 29 Nov 2016 @ 11:18am

    It just occurred to me but what if this spawns the development of heavy stream compressing technologies and they render such caps useless? I know compression is already widely deployed throughout the infra structure but would that be possible?

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

    • identicon
      Anonymous Coward, 29 Nov 2016 @ 11:22am

      Re:

      The problem is it takes time to compress/un-compress files. Especially if you're talking live streaming videos with huge resolutions and top of the line cameras like a TV show.

      Maybe someone could invent an encryption algorithm like in Silicon Valley (if you've seen season 1 of that HBO TV show), but for now it's just fantasy.

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

    • identicon
      Anonymous Coward, 29 Nov 2016 @ 11:42am

      Re:

      Unfortunately the more detail you have in a video, the harder it is to compress, at least without effectively reducing its resolution. Double the video resolution requires 4 times the data. Also the higher resolution makes more detail, like skin and hair texture visible, which reduces the compression available due to value runs, or constant values between frames.
      In short, heavy compression is the same as reducing resolution, because it throws away details.

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

      • icon
        nasch (profile), 29 Nov 2016 @ 3:20pm

        Re: Re:

        In short, heavy compression is the same as reducing resolution, because it throws away details.

        That's lossy compression. There is lossless compression which results in (as the name suggests) no loss of detail. Now whether a particular video can be compressed enough for a particular use case with a lossless encoder is a different question.

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

    • icon
      Derek Kerton (profile), 30 Nov 2016 @ 10:41am

      Re:

      There is extensive work being done in this field, and steady progress is made.

      You'll recognize it by the array of acronyms you've seen used for video: MPEG2, H.263, WMV, MP4, H.264, HEVC, H.265, etc.

      These each represent different compression and container technologies from various competitors or standards bodies. And, over time, they get better and better at compressing video.

      They don't actually improve that much because of better math (compression algorithms) but rather get better because of Moore's law. The math is fairly well known and unchanging, but Moore offers more encode/decode power in silicon which enables real-time capture or rendering of these tightly-packed, mathed-out compressed files.

      The trick, as usual, isn't just to get a better compression, but also to get that standard widely used across media companies and hardware makers.

      For example, the smartphone video era was powered mostly by MP4, a file format from the MPEG and the ITU (Moving Pictures Expert Group, International Telecom Union). It is a.k.a H.264.

      The reason a common standard works so well is that phones/players can have a dedicated hardware acceleration chip that renders the video. This makes for fast decoding, and lower power consumption than the alternative: running a software decoder on your general processor. Dedicated hardware means your phone battery doesn't die after 30 minutes of video.

      H.264 is currently getting replaced with H.265, a.k.a HEVC, although it is not a sure thing until this achieves mass-market acceptance.

      Anyways, this has been ridiculously simplified because the video encoding, compression, and transport world is so fucking complicated I cannot ever get my head around it.

      Suffice to say that it is very difficult to take a MP4 file and compress it, because it has already been compressed like the earth's core by dedicated hardware.

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

      • icon
        Derek Kerton (profile), 30 Nov 2016 @ 10:45am

        Re: Re:

        BTW, this takes us to what T-Mo does with BingeOn.

        Instead of trying to further compress MP4 files, which I indicated was nigh impossible, T-Mo instead does something that CAN be done: reduce the screen resolution.

        So if a vid is being asked for in 1080p, and sent in 1080P, BingeOn transcodes it as a man-in-the-middle, and sends a reduced 480P file. THAT can be much smaller.

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

        • icon
          nasch (profile), 30 Nov 2016 @ 11:08am

          Re: Re: Re:

          So if a vid is being asked for in 1080p, and sent in 1080P, BingeOn transcodes it as a man-in-the-middle, and sends a reduced 480P file.

          I thought they just throttled the bit rate and some video providers respond by reducing resolution.

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

          • icon
            Derek Kerton (profile), 5 Dec 2016 @ 2:42pm

            Re: Re: Re: Re:

            Checking back on it, I think you're right.

            T-mo doesn't actually do the transcode, they trigger it from the BingeOn content provider.

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

  • identicon
    I.T. Guy, 29 Nov 2016 @ 11:51am

    Are we great yet? Wake me when we are.

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

  • identicon
    I.T. Guy, 29 Nov 2016 @ 11:57am

    Funny... I was thinking why bother with all that crap. My phone/tablet has 16/32 G of storage. Seems to me it would be easier to just (cough cough) download a boatload of movies/shows and rotate as needed.

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

  • identicon
    Anonymous Coward, 29 Nov 2016 @ 12:31pm

    Barking up the wrong tree.

    If this was a functioning government, which upheld the laws (stop laughing, I'm making a point here,) this wouldn't be an FCC issue. This is really an antitrust issue. (See Standard Oil or Loews Theaters.) Antitrust calls for producers and distribution to be kept separate, to prevent this very problem.

    Unfortunately, in the real world, antitrust is primarily a function of the DoJ and the US AG, so, yeah.

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

    • identicon
      Anon, 30 Nov 2016 @ 10:12am

      Re: Barking up the wrong tree.

      My thought exactly. Once upon a time the government thought movie studios owning theatre chains was monopolistic and anti-competitive. I can't think of a more apt analogy from the dark ages that matches what's happening today.

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

  • icon
    Padpaw (profile), 29 Nov 2016 @ 1:25pm

    first you set up the electric fence in secret then you lure the cattle in with juicy offerings. When no one is looking you turn on the fence.

    Sure they could leave but it would be painful. I look forward to seeing what hidden clauses AT&T have included in their customers contracts. I would guess large price hikes, penalties for leaving etc.

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

  • identicon
    Anonymous Coward, 29 Nov 2016 @ 1:35pm

    My concern is not the zero rating of a given carrier. It is what happens when you stream company X's content over a competing provider? I believe that the competitor will cripple the bandwidth allowed from the other companies. I truly believe that Verizon does this with YouTube data.

    I personally have ATT as my wireless carrier and Verizon Fios as my home provider with an expensive monthly internet/TV/phone bundle. Depending on the channel lineup of the ATT offering I may be able to cut the cord for a net savings of around 130$ a month. So there is the part that makes my happy about this. My worry is that I switch Verizon to straight internet and they degrade any traffic from ATT/Netflix/YouTube.

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

    • identicon
      Anonymous Coward, 30 Nov 2016 @ 6:09am

      Re:

      -- I believe that the competitor will cripple the bandwidth allowed from the other companies.

      If that is happening then the ISP should be purchasing more bandwidth to the rest of the Internet. If they don't then they are selling you a lie.

      Also, the 'competitor' is not crippling the bandwidth its the ISP's customer who is REQUESTING the content.

      Zero rating/unneutral Internet is like a shady shipping company that extorts extra money from people:
      I pay Verizon trucking company $34 to pickup a shipment of DVD movies from Netflix and bring them to my house.
      The Verizon driver pulls into Netflix and says:
      "Be a shame if your customers never got their merchandise and you go out of business. We will make sure the shipment is not , um, 'lost' if you pay us $5. But don't worry, if you won't pay we will just make your customer pay the extra $5 for you. Either way we are getting that extra money or this shipment will be lost"

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

  • icon
    OldMugwump (profile), 29 Nov 2016 @ 2:05pm

    Competition is coming

    The technology for wireless delivery of bandwidth is advancing by leaps and bounds. Soon there will be real competition.

    Bandwidth wants to be cheap.

    For example, http://fortune.com/2016/11/17/spacex-satellite-network-fcc-global-internet/. There are big players who want to make this happen - not least, Google and Facebook.

    Once there's real competition in the ISP business, none of this stuff will fly anymore.

    Takes patience, tho.

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

  • identicon
    Whoever, 29 Nov 2016 @ 3:19pm

    Wheeler's endgame?

    Is this Wheeler's endgame? Was his approach all a sham?

    Because of his history, we were sceptical of him when he first became chairman of the FCC. But then he won us over with his apparent support of net neutrality.

    Now, it is clear that his approach to enforcing net neutrality is failing. But was that the original objective? To make it look like he supported net neutrality and was opposed to anti-net-neutrality from the big ISPs, but eventually fail and allow net neutrality to fall by the wayside?

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

    • identicon
      Anonymous Coward, 30 Nov 2016 @ 3:33am

      Re: Wheeler's endgame?

      You're asking whether Wheeler's plan was to spend eight years of creating an FCC that was marginally effective at fighting some small cable/ISP offences and that artificial, paid-for outcry from industry shills would make President Trump dismantle the FCC as a result?

      Seems unlikely.

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

  • identicon
    Anonymous Coward, 29 Nov 2016 @ 4:11pm

    Er - not AT&T

    I think the most damning thing to consumer protections was the results of November 8th.

    On the other hand, I plan to sit back and laugh. Now there is absolutely no legitimate excuse for the radical right wing to get every little thing they want, and have been blaming the "libtards" for not getting.

    I'm betting they'll still blame the "libtards" for not getting what they want and getting screwed even harder at the cash register, pay window, and mail box (for bills).

    Be careful what you wish for - you might get it.

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

    • identicon
      Wendy Cockcroft, 30 Nov 2016 @ 7:18am

      Re: Er - not AT&T

      And that, my dear friend, is the whole entire point of partisan politics; the game wherein the sheep have to choose between two wolves on the understanding that "their" wolf won't devour them.

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

    • identicon
      Anonymous Coward, 30 Nov 2016 @ 10:37am

      Re: Er - not AT&T

      Yes, but TV, movies and music are optional and something I don't have to pay for if I don't want it. Taxes, that the libtards love so much, are not optional.

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

  • identicon
    uno, 30 Nov 2016 @ 5:00am

    the FCC saw the writing on the wall

    but their wallets were so full of (AT&T, Comcast, etc) lobbyists money, their mouths quit working

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

  • identicon
    uno, 30 Nov 2016 @ 5:02am

    the FCC saw the writing on the wall

    but their wallets were so full of (AT&T, Comcast, etc) lobbyists money, that their mouths quit working

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

  • icon
    Wyrm (profile), 30 Nov 2016 @ 9:42am

    Wheeler

    So, was he a dingo all along?
    Was he really trying to pass net neutrality rule out did he just push forward rules that he knew he would never enforce?
    I mean, look at what happened since those rules were passed: from day one, it has been rule violation one after another, and all the FCC said each time was "wait and see".
    We've seen enough already, and now that the FCC is on the verge of its own extinction, ask he can say is "oops"?

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


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