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Here’s a big shock: AT&T will start selling customers’ usage data

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AT&T(s t) recently updated its privacy policy to reflect a new plan to sell information about how its customers use its wireline and mobile networks to marketers, advertisers and other interested parties. That data will always be anonymously aggregated and AT&T will let any customer opt out.

Ma Bell announced the policy change in a blog post (first spotted by FierceWireless), in which it took pains to point out how this is common practice in the industry and used by internet giants like Google(s goog) and Facebook(s fb) and mobile competitors like Verizon Wireless(s vz)(s vod). AT&T is right. User data is what makes the web go round. It’s the basis for any targeted ad, and it’s an added revenue source for companies that offer both free and paid services to consumers.

digital data flow through optical wireThe big question is why AT&T didn’t do this sooner. Carriers are sitting on veritable treasure troves of information useful to any marketing agency worth its salt – in particular when it comes to mobile.

Mobile networks aren’t just internet black holes. Carriers have all kinds of traffic-sniffing and traffic-optimization engines buried deep within their network cores. Those engines enforce a carrier’s mobile data policies, streamline app performance and help it troubleshoot network problems. And to do any of things, carriers need to know what its customers are doing on the network – what apps they’re using, what sites they visit and what videos they’re streaming.

There’s nothing particularly nefarious about any of this, but as you might suspect, that information on its own would be very useful to many people. Mobile carriers, however, can provide an additional valuable layer of context: they know exactly where you’re doing all of this surfing, texting and streaming. As I’ve written before, the NSA could squeeze a lot more information than mere phone records out of mobile carriers if they chose.

So why is AT&T all of sudden jumping on big data now? It might be because it’s only now able to do so. Telecom systems traditionally haven’t played nice with the computing world. A lot of carrier data has been trapped inside proprietary network gear and highly specialized customer management and billing systems. I’ve often heard that carriers haven’t been able to use their own data to market to their own customers, much less offer it up to partners in any kind of usable format.

But the big data movement has caught up to operators. Equipment vendors are now selling analytics engines as part of their network portfolios. It’s probably no coincidence that AT&T has been working with API-specialist Apigee, which could help the carrier make its user data less opaque to outsiders.

Considering the heightened concerns about privacy in the wake of the NSA surveillance scandal, there are a lot of consumers who aren’t going to like this and probably won’t trust AT&T’s claims that their data is completely anonymous. I’d suggest those customers take AT&T up on its offer to opt out. But ultimately this is the way the world works. Carriers hold valuable data about consumers’ mobile habits, and they’re going to sell it.

There’s even the chance that something good might come out of it. For instance, researchers and aid workers are using carrier data in developing countries to track the spread of infectious diseases. I’m not saying AT&T is going eradicate malaria, but its user data certainly can be used for far more than marketing.

13 Responses to “Here’s a big shock: AT&T will start selling customers’ usage data”

  1. As the case of Snowden (the PRISM whistleblower) has recently highlighted, the privacy and collection of data is a major issue for businesses and consumers alike. Recently we saw a UK bank announced they are selling data to other companies and increasingly we’re seeing issues with corporations selling consumer data to each other and governments. Yes, it’s all within the confines of privacy laws but at times the rules are being bent to suit purpose. The main issue is that individuals don’t have control over what data is passed on by companies or governments that store their personal details. And what use are rules if governments can bypass them?

    At Tufin we’ve seen multiple large-scale security incidents which highlighted the stealing of user data – we’ve seen some of them on the news. Here’s one for example:

    With more and more data being exchanged, the high level of protection enjoyed by businesses and the government should be passed on to consumers. Why should credit card companies be able to fine enterprises who don’t comply with PCI DSS rules on protecting data and consumers be left without a voice?

    A fundamental level of enforced law which forces companies to adhere to universal rules and increased education would help consumers to understand their rights and collectively reduce the stealing of personal data. It may also encourage consumers to think before using supposedly ‘free’ services such as apps, browsers and search engines.

  2. Sean Bradshaw

    In addition to Osvadlo’s description of how Google does not release your user data, they only use it internally, what’s different is that we *PAY* AT&T for their service. Now I’m okay if they want to give away their service and then resell our data, but doing both is double dipping and it’s wrong.

    • Kevin Fitchard

      Hey Everyone,

      Thanks for commenting. I agree with a lot of the comments that it’s a bit disingenuous for Google to say it dioesn’t sell or share user data. Maybe it doesn’t still it all in a big zip file and sending it to Leo Burnett, but it’s whole business model is built on the idea of selling advertising against such data.

      But I think Sean raises a good point. That’s the basis of Google’s business. Everyone understands this and we get a lot of great free services in exchange. AT&T’s business is selling access and services to mobile and residential subscribers, and it does very well for itself. This isn’t some struggling Web entity desperately searching for revenue streams.

      I don’t see anything fundamentally different between what AT&T and Google are doing (AT&T is going to sell ads against this data as well). But unless this somehow lowers prices for consumers, which I’m pretty sure it won’t, you can argue that AT&T is just getting plain greedy.

      • The main difference between ATT and GOOG:

        – Pay $100+ / month to use phone and data services from ATT
        – Pay $0 / month to GOOG for “personalized” services

        If ATT wants to shill me, they should come clean and use my whore based revenue to offset the monthly phone bill.


      • Fundamental difference:

        – $100+ / mo for phone and data services from ATT
        – $0 / mo for “personalized” search, email, etc from GOOG

        If ATT wants to shill for more revenue, let it offset the money being paid to them for a shill-based service. GOOG doesn’t charge because of this FUNDAMENTAL difference.

        Since when do we stand up for whoring ourselves unwillingly? Grow a pair.

        • Amiram

          I just opted out of AT&T’s program. Guess what? I still have service. Now lets try to opt out of Google’s users analytics programs….

      • Amiram

        AT&T doesn’t operate in a vacuum. If this new program generates substantial revenue it could lead to a reduction in subscriber plan costs. If AT&T wont than one of its competitors selling the same kind of data will and they won’t have a choice but to respond. Don’t expect it to go to free though. AT&T has about $60 ARPU while Google “only” $24 (probably the most out of OTT players, FB is at $4). Carriers must spend a lot more on physical infrastructure and licensing to provide services while Google and other use for free. (We pay AT&T to transport Google service to us and not vice versa). Although some have and are still trying (FreedomPop?) no carrier has succeeded in offering Ad sponsored services yet.

  3. Osvaldo Doederlein

    Just to set the record straight, Google dos not sell (or share or any other euphemism) customer information to anybody, under no circumstances, not even in aggregate form. You will notice that AT&T’s post does not claim that. Please fix article.