AT&T’s Dubious Behavior

You may not have noticed in the crush of events, but AT&T announced a new broadband service option last week, up to 18 Mb/s DSL:

AT&T Inc. (NYSE:T) today announced it will launch AT&T U-verseSM High Speed Internet Max 18 on Nov. 9, offering speeds of up to 18 Mbps downstream. Exclusively available for AT&T U-verse TV customers, Max 18 is the fastest high speed Internet package available from the nation’s leading provider of broadband services.

Apparently this is simply a pricing option for existing U-Verse TV customers that allows them to use more of their pipe for downloading when they aren’t using it for TV. The general data rate of the AT&T pipe is 25 Mb/s without pair bonding, of which 2 – 16 Mb/s is used for TV. Under the old plan, Internet downloads were capped at 12 Mb/s, which generally left enough for two HDTV streams, except when it didn’t, and under those circumstances AT&T borrowed from Internet capacity to make the TV keep looking fairly good. AT&T should be able to offer a 25 Mb/s download tier without changing any hardware, but they don’t.

Generally speaking, we’re all in favor of faster downloads whenever possible, but this announcement is troubling for one very big reason: the only way you can get this service is to buy AT&T’s TV service. This bundling sets the giant of the telcos apart from competitors Verizon, Comcast, and Qwest and raises concerns that should have the consumer groups who’ve promoted the net neutrality agenda hopping mad.

The two aspects of network operation that deserve regulatory scrutiny are disclosure and anti-competitive practices, and this behavior falls squarely in the anti-competitive nexus. The other providers of triple- and quad-play services will gladly sell all tiers of Internet service to anyone in the service areas regardless of which other services they choose to buy. They typically discount Internet service for TV and phone customers, but it’s certainly available without purchasing the other services, and for less than it would cost to buy them as well.

This mandatory bundling is unfortunately consistent with AT&T’s role as the black sheep of net neutrality. It was their CEO’s remarks, after all, that set off the current controversy back in 2005: Ed Whiteacre said Google and Vonage weren’t going to “use his pipes for free.” This got Google engaged in a regulatory program and unleashed a massive infusion of cash into the debate over the regulation of Internet access services, not to mention an army of Google-friendly advocates such as Larry Lessig and Tim Wu’s Free Press organization, the muscle behind the Save the Internet blog. And when the FCC overstepped its authority in and slapped Comcast on the wrist, AT&T insisted the cable company should accept its fate silently and take one for the team instead of challenging the unlawful order in court. Their gall is breathtaking.

The consumer advocates have been strangely silent about this clearly anti-competitive bundling. Why should I have to buy AT&T’s TV service to get the top tier of their Internet access service? For years I bought Internet access from Comcast and TV from DirecTV, and was very pleased with the result. I would probably still do that if DirecTV had not ended their relationship with TiVo and tried to force their sub-standard DVR on me. And if I choose to do so today, I can buy the highest tier Comcast offers in my neighborhood without signing up for their TV service, and at a fairly reasonable price.

So why is AT&T trying to gouge the consumer, and why is the net neutrality movement silent about it? Consumer’s Union is all up in arms about cable companies converting analog customers to digital along with the rest of the country in February, a painfully silly campaign that argues for unfair regulation. Why not address a real issue instead?

Leave a Reply

Your email address will not be published. Required fields are marked *