dslreports logo

story category
AT&T Pretending Everyone But AT&T Should Fund AT&T Upgrades
by Karl Bode 01:23PM Wednesday Mar 26 2014
The other day AT&T's top policy man Jim Cicconi called Netflix "arrogant" and a freeloader, simply for expressing concern that large last-mile ISPs were looking to abuse peering relationships for profit and power. AT&T's comments weren't entirely unlike comments made by the company back in 2005, when then CEO Ed Whitacre poured gasoline on the network neutrality fight by insisting companies like Google wouldn't be able to "ride our pipes for free."

Click for full size
They don't, never have, and never will. What AT&T executives and investors have long dreamed of is finding some way to force content companies to pay for network upgrades AT&T has been too cheap to pay for itself. Why should Google, Netflix and Facebook pay a random "troll toll" when everyone involved already pays for bandwidth? Just because.

It doesn't matter how incoherent this argument is, it never seems to go away -- and in some cases has proven quite contagious for whiny overseas telcos as well. AT&T's simply trying to "double dip" (getting paid numerous times for the same bandwidth) under the guise of reasonable discourse, and most of the technology press is letting them get away with it.

AT&T has been trying to erect arbitrary and unnecessary troll tolls for a decade with limited success (damn you, people gifted with common sense). Now, the company has pretty clearly set its sights on using peering arrangements to extract these desired funds. Netflix was just the first content company to notice.

Cicconi's snotty response to Netflix's concerns was followed up by a filing with the FCC, in which AT&T claimed that the death of network neutrality rules (and an FCC apathetic to potential abuses by AT&T in peering relationships) would somehow magically lower prices for consumers. Are you noticing a certain caliber to the quality of the arguments AT&T's been making for ten years yet?

Cicconi's rant not being quite enough for AT&T, AT&T’s Ralph de la Vega took to a conference this week to also again proclaim that somebody other that AT&T should pay for upgrades AT&T's too cheap to pay for themselves. To hear de la Vega tell it, it's Netflix that should foot the bill for capacity improvements. You know, just because:
Speaking at the Rutberg Global Summit in Atlanta on Tuesday, de la Vega, Chief Executive of AT&T Mobility said, “We have to provide additional capacity and so the only question is who should pay for that addition. Should everyone pay for it or should Netflix?"
Technically, everyone already does pay for that needed capacity. They in most cases pay quite a lot for it. AT&T's customers, who already pay for bandwidth, are simply demanding a service from Netflix, who already pays for bandwidth and transit. Nobody is refusing to pay AT&T. So what is AT&T really saying here? They're saying what they've tried to feebly argue for a decade: that everybody other than AT&T should have to pay to upgrade the company's network.

Few in the press appear to be calling AT&T out on any of this nonsense, except perhaps for Brian Fung at the Washington Post, who points out that after making $49 billion last year (not to mention a generation of massive subsidies) AT&T has all the money it needs to fund any and all capacity upgrades:
To say that regulators must decide between increasing costs on companies like Netflix or raising prices on consumers is to present a false choice. Rising demand is a fact of the industry. Meeting that demand is what network operators are built to do.
This, however, is AT&T, which has always operated by a very unique set of ethical and logical parameters, all while millions of their users wait for speeds faster than 6 Mbps. Make no mistake: what AT&T wants is to use peering relationships to make even more money off of the same network they're already being paid handsomely for across multiple fronts. That anybody could -- even for even a second -- buy AT&T's argument that Netflix is to blame for un-upgraded AT&T networks speaks to both the quality of the tech press, and the quality of discourse in the modern telecom arena.

59 comments .. click to read

Recommended comments



2 recommendations

reply to morbo

Re: Reporters aren't doing their jobs

Keep in mind many of these reporters work for corporations also affiliated in some way with these companies.


Hazelwood, MO

5 recommendations

reply to Killa200

Re: Peering

Netflix simply delivers the bits that consumers of AT&T have requested. Until that time, not a single Netflix bit attempts to enter their network. It is all just like this website does as does the millions of other "services" out there. So it is AT&T ISP customers that are requesting the data and thus congesting AT&T's network, not Netflix.

If AT&T does not like the way their customers are using their network and thus causing them to have to invest to keep up then I guess they need to address that with their consumers. Bottom line is that the consumers of AT&T are paying them for internet access and how they use that is up to the consumer, not AT&T. If AT&T's network can't handle the load their own subscribers are putting on their network then they have 3 options: 1.) Invest in their network 2.) Reduce their number of subscriber, thus reducing the amount of data being requested 3.) Reduce the amount of data their subscribers can request by limiting their speed and/or utilizing caps.

How they do number 2 is up to them. They can raise rates to cause some to switch providers, but being there is limited choices this may not work well. They can do nothing and just let users get sick of poor service and go elsewhere. But again, with limited choices this may not help. #3 may cause some to switch as well but again with limited choices it may not have the desire effect. Wait, I think I see a pattern here... the ultimate problem appears to be a competition one, which regulations should address.

Auto negotiating
Minneapolis, MN

4 recommendations

reply to Killa200
The problem is that the nature of the internet is someone requesting a distant service from which they have already paid the distant service (Netflix) and also paid the local service (their ISP) and not getting the service that is predefined from both. In that aspect, it's like paying AT&T for gas money when it should already be included in the service price (double dipping).

Now I see where your reasoning lies that it has to do with the fact that one must pay up at this certain situation, but the other should also be responsible for maintaining their own network to keep up with the demand (which comes from the paying customer).

In the end, services like Netflix and webhosts like Google are digging up the ancient problem that the ISPs are just plain stubborn to keep their network in tiptop shape when they are blinded by the profits when the infrastructure that got them those profits is lacking (an immature business model). It all gets dumped on the services and webhosts (and customers).

That's just sad and unacceptable when they should've been doing their job in the first place.