Stay on Top of Emerging Technology Trends
Get updates impacting your industry from our GigaOm Research Community
This week AT&T got a lot of media attention for its expansion of its GigaPower service to Kansas City announced on Monday. The news wasn’t so much about the expansion, but about the ISP’s plans to to offer a $29 per month discount for customers who let Ma Bell scan their web searches in exchange for targeted advertising. The pricing isn’t new, but Ars Technica noted it as did the Wall Street Journal, and even our own Jeff Roberts wrote a post explaining that he thought it was a good idea that the company was putting an explicit price on privacy.
But $29 isn’t actually the price that AT&T charges per month for privacy. As I discussed back in May last year after I tried to sign up for AT&T’s GigaPower service to find out more about the pricing and the disclosures associated with the plan, the actual costs were closer to $44 or even $62 per month. This time around the price differentials are $44 for gigabit internet and $66 for HD TV and HBO Go plus gigabit internet.
Fact checking Ma Bell
To arrive at those prices I looked at the cost of the Internet Preference Plan (that’s the plan that monitors your web surfing) versus the Standard Plan for gigabit service and gigabit service plus TV. Gigabit service costs $99 per month under the Standard Plan plus a $7 monthly fee modem rental fee and a $99 one-time activation fee, that nets out to a monthly cost of $114. The Internet Preference Plan waives the one-time activation and monthly modem fee which means you pay only $70 a month, giving you a true cost of $44 a month if you choose the privacy-preserving option.
On the video side numbers are similar as seen below. The Standard Plan has a higher cost of $149 per month plus the $7 monthly fee and a one-time $49 activation fee. Only you also add in a $10 monthly service fee for HD TV and a $16 monthly fee for HBO Go which are included in the Internet Preference Plan. So the comparable plan nets out to $186, which costs $66 more than the $120 you’d pay for letting AT&T sneak a peek at your home broadband web surfing habits.
AT&T also makes it tough to find the alternative to its Internet Preferences plan. You have to read the fine print and click to search for options that don’t include the AT&T Internet Preferences plan (they don’t call it something straightforward like the “Ma Bell’s Watching You Plan”). See underlined item below for where to click.
AT&T doesn’t make this easy
So it’s tough to avoid the spying plan, but it’s even tougher to actually fact check AT&T to discover the associated fees that make the cost of privacy so much higher than the advertised $29 a month. As part of looking for the pricing this morning to see if anything had changed, I ran into another issue that’s almost as frustrating as AT&T’s misleading number and the media’s acceptance of it.
Uncovering AT&T’s actual pricing requires you to have a legitimate address in Ma Bell’s service area that currently doesn’t have AT&T service. For me, this meant finding a friend who had GigaPower service, getting their address and then using Google Maps to plug in addresses until I found one that worked with the ordering system so I could check pricing.
That’s a significant hurdle to compare prices for the media, for activists, for regulators and really for anyone interested in understanding what broadband costs in the U.S. AT&T isn’t alone in this practice. Almost every ISP has a similar hurdle in part because they charge different rates in different markets and also because they offer different services based on addresses. At a minimum ISPs should post pricing for their services in each market on their web sites up front before then requiring an availability check.
As it stands now, pricing for broadband is so complicated and dependent on contracts, various fees and options that you must go all the way through an order before you understand what your bill will actually be. This makes it hard to compare pricing between what is often the single other competitors in the market, but the contracts often lock the consumer into the ISP for a year or two, further reducing competition.
Someone call the FCC and FTC
So in this case, the media may be lauding AT&T for putting a $29 monthly price on the value of consumer privacy. But when I look at the practice, I see a company that has little competition, manipulating consumers into choosing to give up their privacy. Consumers do this, not because they get a $29 discount, but because after going through a fairly complicated sign up process and managing to click on the right button to even see the option to protect their privacy, they suddenly realize that keeping their privacy doesn’t cost $29 but rather $44 or even $66 per month.
That’s a very different story. And it’s one that AT&T makes it really difficult to report.