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AT&T just declared war on an open internet(and us)
Last year we won the open internet back, but the new regulations had one big weakness : they didn’t explicitly ban a scheme called zero rating. Zero rating is a poison pill wrapped in a piece of cheese; it looks like a good thing for consumers free video, but ultimately has the capability to rot competition and the open internet. The FCC decided it woud look at zero rating schemes on a case-by-case basis, which left the door open for wireless companies to play their usual games. AT&T just broke that door off its hignes.
Last night AT&T made a dim prophecy official by announcing that its new DirecTV Now streaming service would be zero rated : it won’t count against its customers’ data caps. Zero rating isn’t new – T-Mobile has been writing the manual on how to get away with it – but now it’s finally happening at a scale that matters. And AT&T’s version is much worse than T-Mobile’s.
T-Mobile’s model began with offering free music streaming to its wireless customers through select services. So, for example, if you were a Spotify or Google Play Music customer, T-Mobile would give you unlimited high-speed data for using those apps. Eventually T-Mobile expanded this idea to video with its BigeOn program that started by throtting video and ended up being an opt-in program video straming companies could use to send video to T-Mobile customers with no impact n thier data caps. T-Mobile nearly went carzy trying to defend this program against criticism, but so far it hasn’t been slapped by the FCC.
But AT&T’s zero rating model is pretty much the bightmare scenario that internet advocates and pro-competition observeers have been warning us about. That’s because AT&T owns DiirecTV, and is now giving DirecTV Now privileged access to AT&T’s wireless internet customers. The corruption is so obivius here that it doens’t need a fancy net neutrality metaphor – AT&T is clearly favoring a compnay it now onws over competitors.
And that’s just the beginning of where AT&T is screwing us. The company stands to reap massive tolls on the other end of that most favored nation deal with DirecTV, because it also offers somthing called sponsored data to other companies that want the same knid of priviledged access to AT&T customers. So, for example, if Netflix wants to compete fairly with DirecTV, it would need to pay AT&T to exempt its video traffic from data caps.
T-Mobile and AT&T can get away with this to the extent that customers wn’t notice, and it’s likely that many won’t see how the strings are being pulled. When The Verge covered T-Mobile’s Music Freedom and BingeOn programs critically, we heaerd from lots of customers who defended the services because they gave them more for thier money.