Editorial: AT&T Already Playing Bandwidth-Charging Tricks with Online Services

Those fears of AT&T charging third-party web services for customer bandwidth are rocketing towards reality. AT&T may be allowed to cap customers home DSL or U-Verse connections. But, when they start making exceptions for (their) data services over rivals… antitrust rears its ugly head.

AT&T may be playing funny with how they achieve “unlimited talk” on the MicroCell, when running on AT&T DSL.

Here’s the deal. When you have an AT&T DSL or U-Verse account, you are limited to 150 or 250 GB per month, respectively. Obviously, paying for faster speeds may not make a lot of sense, since you are merely speeding up when you will hit that wall. Unlike rival Comcast however, they do offer overage rates, rather than terminating your service… and banning you as a customer for a year… a la Comcast.

The interesting thing is that AT&T is now offering to deduct bandwidth used by the AT&T 3G MicroCell, its own femtocell offering, from your home broadband quota. AT&T offers the MicroCell as a means of both reducing traffic on its cell towers, and (primarily) to provide superior in-building service.

Like other femtocells, the AT&T MicroCell uses a broadband Internet connection, which then broadcasts out a cellular signal. GPS is used to ensure that the device remains compliant with FCC regulations on cell tower locations, and spectrum allocation requirements.

At the time of launch, MicroCell was criticized for deducting bandwidth and talk time from users wireless phone allocations, but this is actually pretty standard in the industry. Rival Verizon Wireless uses the same principles on its femtocells. Both argue that the traffic routes through their network cores, and that the sole goal of femtocells is to improve reception, not cut customer’s bills.

I have an AT&T 3G MicroCell. Since that utilizes my home broadband network to boost my wireless data signal, does that mean my wireless usage also counts against my wired broadband monthly data plan?

No, the wireless traffic from your AT&T 3G MicroCell does not count toward your monthly home broadband plan. Please register your AT&T 3G MicroCell account and your residential AT&T Internet account at www.att.com/internet-usage-MicroCell to help ensure accurate Internet usage billing. If you have broadband service with another provider, you do not need to register your account.

The issue at hand is that AT&T’s broadband division is giving special treatment to AT&T MicroCells / femtocells. If a customer has, for example, Verizon Wireless or Sprint, the bandwidth used by their femtocell solutions are deducted from the total bandwidth available to a customer each month. Not so with the AT&T MicroCell.

AT&T’s broadband and AT&T’s wireless services, are both regulated by the FCC, as they are using the public’s resources to provide service. In fact, they’re technically separate companies, AT&T Mobility Services, LLC is wholly-owned by AT&T, Incorporated, however. Rival Verizon Corporation does not cap or throttle its DSL or FiOS Fiber To The Home (FTTH) services, and have stated on-record plans to maintain an uncapped, unthrottled home Internet experience.

The battle to control if carriers can charge for using high-bandwidth services like iTunes, Netflix, Hulu, and Peer-to-Peer file sharing is already long and bloody. The FCC lost a battle to enforce BitTorrent net neutrality, but the ISPs ultimately imposed limitations that accommodated usage of Peer-to-Peer technology, without intercepting or blocking its traffic. Consumer’s uproar ultimately won the day, but at a heavy price; two of the nations largest ISPs (AT&T and Comcast) ended unlimited, unthrottled Internet service. This left many in monopolized areas paying dramatically more for the same quality of service they were paying for previously.

The situation with AT&T’s MicroCell differs from the BitTorrent case however. Here, AT&T is a monopoly in many circumstances; customers often have no choice in wireline or wireless broadband, than AT&T DSL. They are now being told by AT&T that the traffic for which a rival service provider may wish to communicate with the customer, will be charged at a rate different from what AT&T charges itself. Namely, AT&T’s wireless unit is not paying the cost to a consumer (in bandwidth consumption) that Sprint and Verizon would pay.

If this were the long distance system, we’re pretty sure that would raise some eyebrows at the FCC. This is the kind of stuff that triggered the Ma Bell break up decades ago.

It’s also what content providers are fearing; a future of the Internet where startups and entreprenurers will be unable to offer their big data services, because they don’t have special deals in-place with ISPs. These deals obviously would intentionally favor big businesses competing with one-another, and paying one-another, but lock out innovators.

We’ve encountered this already with walled gardens in the wireless industry. And while headway has been made, even basics like jailbreaking your device are only a moment away from being rendered potentially-illegal once again.

What aggravates us the most, are apologist pundits that yawn at these concerns. These types of problems do stifle innovation. They do shut out startups. They do prevent consumers from having the freedom to chose what services they prefer.

It’s pretty clear that AT&T is using the MicroCell free-bandwidth offering as a trial balloon, one we’re sure they’d be happy to cite in the future as flying through without criticism.

Well, we’re here to criticize it. We think that if AT&T wants to offer free femtocell traffic to its wireless customers, that people who have no alternative ISP available should get free femtocell traffic on any other carrier. It would be pretty painless for AT&T to implement, as such traffic is clearly identifiable by its ports and packet headers. If AT&T has the technology to detect when people are tethering, they certainly can waive bandwidth charges for Sprint, Verizon, and T-Mobile femtocells.

We’re guessing though they don’t have any plans to do anything but hit the aspirin bottle after reading this one though…