AT&T, have you no shame?

Bob Quinn, one of the top AT&T lobbyists ("Senior Vice President-Federal Regulatory") in a company famous for lobbyists, must have drawn the short straw at the office staff meeting this week, because he got a truly unenviable job. Quinn's task was to explain to the world how AT&T's plan to keep blocking FaceTime video chats on some data plans but to unblock it on others was a good thing for customers, how AT&T was in "a learning mode," and—most importantly—why the decision was absolutely, completely legal despite what the unwashed peasants in "public advocacy" work would have you believe.

So Quinn walked down the hall to the closet next to the photocopier and pulled out something reserved for just such an occasion: the company's sole suit of adamantine armor, fortified against flame attacks by a special concoction distilled from the rage of 10,000 Internet commenters. (We are, admittedly, hypothesizing a bit at this point.) Bold Sir Quinn donned the suit and sallied forth to his desk, where he sharpened his quill pen and churned out a corporate blog post on "enabling" FaceTime for AT&T users.

In it, Quinn pointed out that AT&T's serfs customers could continue to use FaceTime over WiFi. With iOS 6, they can soon use FaceTime over the cell network, too, but only with certain data plans. On other plans, FaceTime wouldn't work. The restrictions apply only to FaceTime, however; Quinn even suggests that aggrieved users go out and download any other video chat app from the App Store—and they can run it on any data plan without problems.

The distinctions being drawn seem bizarre and arbitrary to many customers who argue that data is data—I paid for it and should control what I use it on, not AT&T. It's even stranger because AT&T isn't targeting "video chat" apps with its restriction; it is only targeting FaceTime.

What is going on here?

She canna handle the data, Captain!

Essentially, AT&T is counting on customer ignorance/laziness to save it from a data glut. The company knows that most cell phone users will favor the pre-installed apps, possibly adding a few more like Angry Birds, but largely not going out of their way to test and use other video chat apps (which generally require the people at the other end of the line to have the same app installed).

So the company can be generous when it comes to "downloaded" apps, but it fears that tearing down the wall around something like FaceTime would simply create too much data to handle. As Quinn finally admits near the end of the post, the decision is all about AT&T's "overriding concern for the impact this expansion may have on our network and the overall customer experience." Translation: we're afraid it would melt our network.

So much for the argument; the real question is, "Can this be legal?" The main thrust of Quinn's post was that it is legal because AT&T told people what it planned to do in advance. The Federal Communications Commission (FCC), in what was widely considered a weaker than weak-tea "open Internet" order in late 2010, did mandate transparency around network management—which is why AT&T had to announce the policy in the first place.

"Our policies regarding FaceTime will be fully transparent to all consumers, and no one has argued to the contrary," wrote Quinn. "There is no transparency issue here."

"Ah," protest the serfs, gathering around the baronial estate with pitchforks in hand, "but even under the open Internet order AT&T can't just block apps, right? This is an outrage!"

But the anger just serves to remind us how weak the rules are; blocking apps is indeed just fine... with one notable exception.

The rules

One of the ironies of FCC rulemaking is that, under Republican leadership generally hostile to the idea of legally enforced net neutrality, the FCC actually passed a 2005 "policy statement" (PDF) outlining four freedoms all Internet users could expect. Number three read:

To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.

The principles were all subject to "reasonable network management," but it soon became clear that throttling or blocking particular apps didn't qualify as "reasonable." The FCC soon went after Comcast for BitTorrent interference and forced the company to change its ways (Comcast adopted a much improved system that focused on the heaviest local users at periods of actual, local congestion, rather than picking apps or protocols to burn at the stake.) Under this regime, which applied to wireless and wired networks, AT&T's current FaceTime monkey business would have violated the rules.

But Comcast sued the FCC over the issue and won, arguing that the policy statement had never been a set of "rules" and that the FCC wouldn't have the authority to make such rules anyway. So, under a Democratic FCC led by someone who promised to implement net neutrality rules, the agency adopted a strangely bifurcated order (PDF) that applied some of the same principles to wired networks—but gave wireless a huge pass (start reading at paragraph 93 for the wireless rules).

Although the FCC's final order said things like, "there is one Internet, which should remain open for consumers and innovators alike, although it may be accessed through different technologies and services," it actually let wireless operators do just about anything they liked, including blocking most apps.

The FCC did carve out one restriction on blocking apps, however: companies can't do so to squelch competition. Here's the official rule:

A person engaged in the provision of mobile broadband Internet access service, insofar as such person is so engaged, shall not block consumers from accessing lawful websites, subject to reasonable network management; nor shall such person block applications that compete with the provider’s voice or video telephony services, subject to reasonable network management.

The FCC concerns behind the rule aren't theoretical; wireless operators like KPN, the incumbent telco in the Netherlands, have already blocked apps like WhatsApp (an instant messaging app) and Skype on the straightforward reasoning that these apps are bad for business by replacing texting and voice calls that might otherwise rack up separate fees. (The blocking was so egregious that the Netherlands passed the world's second net neutrality law in response.)

AT&T insists that FaceTime doesn't compete with its own services. As Quinn put it, "AT&T does not have a similar preloaded video chat app that competes with FaceTime or any other preloaded video chat application."

And at this point, suddenly, we have entered Lawyer Land, where the construction of sentences matters far more than everyone but your grade school grammar teacher (remember "diagramming"?) ever thought it would. The order prohibits AT&T from blocking apps that compete with its own "voice or video telephony services." AT&T wants to interpret this as saying it would only apply to an AT&T video app, but that's not what the rule actually says. One could certainly make the case that FaceTime in fact competes with even AT&T's basic voice chat service (Quinn wants to talk about "apps," which AT&T doesn't have, but the order is talking about "services").

Public Knowledge makes this exact argument: "Many people use apps like FaceTime, Skype, and ooVoo instead of making voice calls. In many respects these apps are more convenient than traditional calling. And by using these apps, consumers can save money on international calling charges, conference call services, and in other ways. There's no doubt that these apps are a competitive threat to AT&T's voice service."

Free Press is just as upset, writing, "Though it’s trying its best to hide it, the truth is that AT&T’s motivation here is to prop up its slowly declining voice and text revenue streams, which are expensive services that the open internet is making obsolete. If AT&T can weaken the FCC’s Net Neutrality protections at the same time, well that’s a bonus. The decision to block FaceTime likely will not be the last anti-consumer thing AT&T attempts as it tries to reassert its control over the communications ecosystem that the open Internet pried away long ago."

But what if AT&T isn't technically "blocking" anything at all?

"Blocking" vs. "exerting influence"

The language surrounding this entire issue is quite strange, with AT&T going on about how the FCC rules don't apply to "preloaded apps" (the order says nothing about preloaded apps). Apple and AT&T have in the past danced around the issue of exactly how the FaceTime restriction will be implemented—is AT&T going to block network traffic, or did it lean on Apple to make sure that traffic never even entered the network in the first place?

In the past, Apple coded its FaceTime app so as to work only over WiFi; that will now change with iOS 6. Sprint has already made clear that FaceTime will then be available to all users of its cell network, but AT&T wants to open the barn door only a crack. Perhaps it has leaned on Apple to build the barn-door-controller code into FaceTime itself, sparing AT&T the problem of trying to filter its network.

We're guessing that Apple has, in fact, gone along with this scheme, which is probably why AT&T keeps stressing that preloaded apps aren't required to do anything in particular. So long as AT&T or other carriers can convince Apple to alter its FaceTime code, the telco never actually has to get into the messy issue of identifying and blocking traffic in the first place. This helps explain what otherwise seems like an odd pair of sentences:

Although the rules don’t require it, some preloaded apps are available without charge on phones sold by AT&T, including FaceTime, but subject to some reasonable restrictions. To date, all of the preloaded video chat applications on the phones we sell, including FaceTime, have been limited to Wi-Fi.

The rules may forbid AT&T from blocking an app—but they don't require any specific app to use cell connections. So long as Apple made the change, AT&T seems to believe it's in the clear.

Either way, groups like Public Knowledge still see red.

"We don't know why Apple chose not to enable cellular FaceTime earlier," wrote John Bergmayer, a senior staff attorney. "But now that every other US iPhone carrier besides AT&T will be offering cellular FaceTime on a nondiscriminatory basis, it is reasonable to assume that AT&T's demands were holding it back for everyone. No carrier should be able to dictate to Apple or any other handset manufacturer what features they may include on their phones."

The spirit of the law

Whatever is going on here—clearly, "transparency" only goes so far in this business—it's possible AT&T and its lawyers have in fact orchestrated the entire approach to stay on the right side of FCC rules. While this is an interesting legal debate to have, it largely ignores the spirit of the "Open Internet" rules.

For instance, visit the main FCC "Open Internet" page and you are greeted with this bit of text:

The “Open Internet” is the Internet as we know it. It’s open because it uses free, publicly available standards that anyone can access and build to, and it treats all traffic that flows across the network in roughly the same way. The principle of the Open Internet is sometimes referred to as “net neutrality.” Under this principle, consumers can make their own choices about what applications and services to use and are free to decide what lawful content they want to access, create, or share with others. This openness promotes competition and enables investment and innovation.

The Open Internet also makes it possible for anyone, anywhere to easily launch innovative applications and services, revolutionizing the way people communicate, participate, create, and do business—think of e-mail, blogs, voice and video conferencing, streaming video, and online shopping. Once you’re online, you don’t have to ask permission or pay tolls to broadband providers to reach others on the network. If you develop an innovative new website, you don’t have to get permission to share it with the world.

Preach it, Commissioners!

Except that, when we come down from Idealism Peak and re-enter the Real World Valley, companies do need "permission" to launch "innovative applications and services." It's hard to believe, for instance, that it was Apple's desire to make FaceTime work less well for its customers on one specific network. Apple has made clear that supporting FaceTime over 3G is up to the carrier—an admission that permission-based innovation is alive and well in the mobile world in a way it has never been in the wired world.

The crowd goes wild

Whatever legal, political, and technical merits lie behind the FaceTime decision, the outpouring of customer rage has been something to behold. Consider just a few of the (many) comments left on AT&T's blog post:

This is the most unprofessional public statement I have ever read. In effect, you are telling the world, don’t use FaceTime, use someone else’s video chat software. AT&T, there is no difference between what you are and what Ma-Bell was. And for the millions of people who joined your network to obtain the best smart phone ever made, you prevent us from using the software designed by the people who made the phone. It’s pitiful, simply pitiful.

And:

This defensive post completely misses the point. At its core, what is making customers angry about this is not net neutrality. Do you really think the average customer cares about net neutrality? So you came up with a clever way to technically—and just barely—stay in compliance with an industry regulation. Congratulations! All customers see is a clumsy organization trying to funnel us from older, cheaper, better rate plans into more expensive, restrictive rate plans.

And:

Very funny! You don’t have a single supporting comment on here. You’ll be apologizing soon enough for even posting such a dumb response.

And:

If you restrict FaceTime over cellular in ANY WAY I will cancel my family plan and take my business to Verizon!!... I pay you for internet access and it should not be up to you how I use it. Frankly, I am sick and tired of you placing restrictions and limitations on services that I pay you for!

And:

PERHAPS it is or isn’t a violation of net neutrality. But it’s certainly not endearing you to your customers, some of whom no longer have contracts, and many of whom now have options (Verizon, Sprint) with the iPhone.

And:

Voice is data, text is data, FaceTime is data. Everything that is transmitted over a cellular connection is data. The only reason some data is more expensive than other data is because AT&T (and all of the other carriers for that matter) are greedy and will use any excuse to pad the bill. This FaceTime policy is the clearest example (as if texting wasn’t) of their avarice yet.

And:

All I’ve got to say is this is total BS. Data is data. When I pay for 3G of data, who cares how I use it? Facetime, Skype, Tango, Netflix, Youtube??? If I go over, that’s my problem, but to tell me that I have to switch to a more expensive plan just to use it [is] WRONG !!!

And:

AT&T is certainly not winning customers over with this half-baked PR-laden corpospeak. They can hardly handle current traffic, so I understand their fear that FaceTime usage will add another blow to a rudimentary network. However, if they can’t handle 2012 technology, I would suggest they hand back the spectrum to the People of the United States of America, so that we can find a competent carrier to whom to lease.

And:

Wow. I was considering sticking with AT&T because I was planning on moving [to the] new “Shared Plans” anyway. This one post in its entirely sealed the deal for me. There is absolutely no way I would stay with a company that instead of listening to its customers, posts to their blog saying that our concerns are “knee jerk” reactions.

And:

AT&T, this is despicable. I can’t believe your PR department allowed that sorry excuse for a response to go out. The problem here isn’t Net Neutrality. The problem is you are an out of touch, greedy, selfish company. I don’t begrudge any company from making a profit, but this is ridiculous. If AT&T wants to keep its customer base you need to find ways to delight your customers.

They continue in that vein for some time. A couple hundred comments are unlikely to alter the thinking (or "thinking," depending on your point of view) up in the AT&T Death Star. Blog comments are of course not representative of customers as a whole, and it may well be true that the vast majority of AT&T users simply shrug, accepting the AT&T line: "Hey, we can do more now than we could do before. Progress!"

The real problem

This would be a shame. The real issue here isn't FaceTime, but the future of innovation—and who controls it—in mobile computing. Mobile computing is running so rapidly down the road to ubiquity that even my newly retired parents now own two iPads so they can play Scrabble against each other from across the living room. In this new world of devices and connectivity, what role do we want the carriers to play in controlling what works where?

AT&T's vision is on display in the first sentence of Quinn's post: "Last week, we confirmed plans to make FaceTime available over our mobile broadband network for our AT&T Mobile Share data plan customers." In Carrier World, the carriers get to "make apps available" to users on the carriers' own timeframes—as they have generally done in the wireless world.

Despite the fact that AT&T's DSL service at my home tops out at 6Mbps and will soon be beaten by mobile devices accessing mobile LTE networks, it is impossible to imagine the company telling me that I should be grateful for being allowed to run some program over my Internet connection. Quinn's blog post is titled "Enabling FaceTime," but thankfully AT&T doesn't get to "enable" anything on wired networks: developers code without permission and I run their apps without permission.

So what's the solution? Competition plays a key role. While we would prefer a slightly stronger standard for wireless net neutrality, customers generally do have more choice when it comes to wireless carriers than they do in the wired world. Switching isn't easy, especially in the US world of contract and early termination fees, so the mere existence of competition doesn't always work magic, but those who want to use FaceTime do at least have the choice of moving to a company like Sprint.