While AT&T is now a part of two lawsuits to try and overturn the FCC’s new net neutrality rules, there’s probably no company singularly more responsible for the rules being necessary in the first place. It was AT&T that really got the neutrality debate rolling in the States just about a decade ago, when then CEO Ed Whitacre proudly proclaimed he was going to start charging companies like Google a “troll toll” just for touching his network.
AT&T’s been on the bleeding edge of exploring creative new ways to violate net neutrality for an extra buck ever since, whether that’s blocking video services to drive users to pricier plans, using throttling to drive users to costlier plans, using interconnection to sock content companies with extra costs, or using zero rating to generate new revenue at the cost of a steeply tilted playing field.
Telco CEO Randal Stephenson has been making the media rounds lately proudly proclaiming that AT&T will surely be victorious in court, and the the FCC’s net neutrality rules will be vacated. But AT&T lawyers are also also working hard to prevent regulators from including conditions on its $49 billion acquisition of DirecTV related to neutrality as well. Despite countless instances where AT&T has used usage caps to unfair advantage, AT&T’s telling regulators there’s no need for neutrality conditions on the merger (with a specific eye on usage caps and zero rating some services) because history shows AT&T is a saint on that front:
“The record does not support Opponents’ request that AT&T be barred from exempting any online video service from any usage-based tracking, metering, or billing in its broadband services,” AT&T wrote. “Opponents offer no reason for the Commission to reverse these very recent conclusions and issue a blanket, abstract prohibition that would apply only to AT&T. Doing so would deprive AT&T customers of service offerings tailored to fit their usage and their budget. It would also distort competition by hindering AT&T’s efforts to close the gap and compete with cable’s higher-speed broadband products.”
In other words, the company is claiming that merger conditions preventing it from using usage caps uncompetitively — something it usually only does in uncompetitive markets — will hurt competition. AT&T logic! It’s also trying to argue that ten years of AT&T’s clear intent to do harm on this front is a mass hallucination. AT&T already imposes usage caps on its broadband customers (150 GB for DSL users, 250 GB for U-Verse fiber to the node customers) thanks to this lack of competition. Yet hysterically AT&T insists there’s no way it could possibly impose aggressive caps because customers would leave AT&T:
“AT&T wrote that its broadband data limits are high enough to “accommodate the great majority of customers.” Broadband providers with caps “that significantly impinge on the ability of customers to enjoy OVD [online video distribution] products will not be able to attract new customers or even to retain existing ones,” AT&T wrote.”
Here’s the truly entertaining bit though: as we’ve noted before, AT&T has no interest in retaining most of these capped DSL users anyway. It’s willfully trying to drive them away with rate hikes so it can disconnect them and focus on even more expensive and heavily capped wireless LTE service. It’s also worth noting that AT&T’s not currently enforcing those 250 GB caps on U-Verse users, because the markets it has upgraded with better service usually see improved competition. In short, AT&T caps markets that lack competition, and doesn’t in markets where there’s at least a little. Yet AT&T’s telling the FCC that restricting their ability to impose what are entirely arbitrary caps that have nothing to do with network congestion — would hurt its ability to compete.
Of course as we’ve long noted, net neutrality is a symptom of a lack of competition, and net neutrality rules are only necessary because companies like AT&T are endlessly exploring new ways to abuse this lack of competition. However, while the FCC’s neutrality rules do allow users to complain about usage caps and zero rating, they’re not explicitly included in the rules, and so far the FCC’s given every indication that they see caps as just “creative pricing.” While there have been hints the FCC might start policing caps (and unreliable usage meters) should they start getting notably more ugly, it’s pretty far from certain as the agency appears to want to steer clear of broadband price controls.
Still, AT&T’s working tirelessly on multiple fronts to ensure nobody infringes on its god-given right to use usage caps to abuse uncompetitive markets suffocated by regulatory capture. That was an honor bestowed upon the company after a generation of blood, sweat, tears and millions in campaign contributions, and it will be damned if it’s going to have said rights trampled by those new startup and consumer-friendly goody two shoes over at the FCC.