Nov. 15, 2011 at 6:21 AM ET
Mark Rasch is dying to get in on the super-fast 4G cellphone networks he keeps hearing so much about. Advertisements with streaming movies, live sports, even lightning bolts that help create stirring multimedia experiences on the go have been tempting him for more than a year.
An AT&T customer, he was thrilled last week when the firm released its first two "real" 4G LTE phones -- the HTC Vivid and Samsung Galaxy S II Skyrocket. A Washington, D.C.,-area resident, he's lucky to live in one of the handful of cities where the providers' highest-speed service is currently available, so he was ready to jump in with both feet.
Then, he read the contract.
It says this: "Data sessions may be conducted only for the following purposes: (i) Internet browsing; (ii) email; and (iii) intranet access." Nothing about lightning bolts, and according to Rasch, nothing that he can't already do with his old phone. He found the limitations troubling.
The new AT&T 4G LTE service, promising download speeds of 5-to-12 Mbps, could be incredibly attractive to consumers because that much bandwidth is almost enough to permit streaming of HD movies or sports to big living room flat-screen televisions, while leaving enough headroom for other family members to still surf the Web. It theoretically could replace the need for a hard-wired Net connection, and make that home broadband connection completely portable – but not if providers saddle the service with restrictions.
This holiday shopping season will be the first that all four major cellphone providers will be hawking their faster 4G networks. But Rasch is concerned about the long list of activities that appear to be prohibited by AT&T's terms of service. While such restrictions are not new for 4G, they are far more relevant -- why pay for a high-bandwidth phone if not for high-bandwidth activities?
"AT&T promotes and advertises all the ‘cool’ things their devices can do,” said Rasch, a digital law consultant and the former head of the Department of Justice's computer crimes unit. “You can download apps, listen to radio stations, stream TV, watch movies, play games with third parties, share data, log into your home PC, do real-time GPS, get traffic and weather reports, and thousands of other things. But only, according to the contract, on WiFi. To me, advertising and promoting services that you know you don’t offer in the way that people are likely to use them is ... false advertising."
AT&T, in an e-mail statement, didn’t directly address Rasch’s complaints, but it did say that its new phones offer rich experiences to users, including apps with video, and that it continually works to balance bandwidth demands to keep its network running smoothly.
"Our (terms of service) help us ensure the efficient use of limited wireless spectrum and strong network performance for all customers," the firm said. "A variety of video apps, including Sling, Netflix, YouTube and others, are optimized for use on wireless networks, and are available for AT&T customers today. Among other things, this optimization ensures a quality experience for the customer without excessive data usage. We are committed to working with apps developers to help them to optimize apps for use over our wireless network."
The firm did not answer requests for clarification about individual elements contained in its terms of contract, responding simply: "We’re comfortable with our terms of service and the many ways customers use AT&T’s mobile broadband network.”
So does AT&T’s terms of service contract for new high-speed wireless gadgets throw a wet blanket on consumers, or not? The difference may be mere semantics at the moment – AT&T appears to allow many of the activities that Rasch believes are restricted by the terms of service. And at the moment, AT&T’s 4G LTE service only works in Boston, Washington, D.C., Baltimore, and Athens, Ga. It will turn on LTE in six more cities next week, and hopes to reach a total of 15 cities by the end of the year.
But Michael Weinberg, staff attorney at consumer advocacy firm Public Knowledge, says the semantics matter.
"(The contract) does read incredibly restrictive, essentially, only Web browsing and email. Is downloading apps using one of those two things? Playing Scrabble?” Weinberg said. “The classic definition of Internet browsing is things done in a browser. This is another example of a terms of service written in a way that has traps … that can be pulled up to stop people doing things (the company) doesn’t like."
The new 4G -- for "Fourth Generation" -- cellphone standard is off to a rocky start. Promising speeds that rival fast, hard-wired home Internet connections, 4G phones create possibilities such as streaming full-screen HD movies in the back seat of a moving family minivan. But carriers have co-opted the term 4G, turning it into catch-all phrase that includes refer to lower-speed networks such as AT&T's HSPA+. Marketplace confusion reigns – the new 4G LTE phones released by AT&T this month are the providers first “real” 4G entrants. And, early 4G users on all networks report it doesn’t really provide video streaming nirvana.
Meanwhile, bandwidth caps render true 4G devices essentially useless, some critics say. A report by Public Knowledge published in Augustsaid that users streaming at top 4G speeds would use up a typical 2 gigabyte monthly bandwidth allotment after watching just 3 hours of a Netflix movie or uploading two 10-minute HD movies. Since then, basic capped plans have risen slightly, and data plans let users pay for more bandwidth, but the costs quickly become prohibitive.
"They promise unlimited possibilities. However, they will deliver little except anxiety and disappointment to millions of consumers who will pay extra for speeds they cannot use for fear of running over their data cap," the group said in its report, which concluded that 4G services are "a waste of money. … For the perhaps first time, the introduction of a generationally faster technology will not have a widespread impact on online behavior."
Cellphone service providers must perform a delicate dance with each new network rollout. On one hand, they have to brag about great new features and capabilities, but at the same time they must avoid creating a gold rush that clogs their networks and avoid inviting network abuse. High overage fees are the most practical way to stop bandwidth hogs from degrading fragile high-speed networks, but restrictive usage contracts are a handy legal arrow to have in the quiver.
AT&T's been down this road before. In 2009, the firm temporarily blocked usage of the popular Slingbox streaming TV service. It was restored nearly a year later, when the two firms reached an agreement that helped AT&T manage network usage.
AT&Ts current 4G and 3G contracts contain language that appears to restrict usage of the Slingbox by its subscribers. The terms clearly prohibit "redirecting television signals for viewing on Personal Computers,” for example.
But Jay Tannenbaum, Slingbox spokesman, said that the Slingbox app works just fine on AT&T's network, and he doesn’t anticipate problems with the new 4G LTE service.
"We have no problems with any carrier," he said. "We try to be good network citizens and work with the bandwidth we have. ... We have had no problems with our data being limited on any network."
Net neutrality advocates worry that a provider like AT&T could choose to discriminate against a specific application like Slingbox and favor its own flavor of the same tool. But the terms of service issues raised by Rasch don’t suggest any underhanded attempt to gain a market advantage; they sound more like an effort at self-preservation. Many activities expressly forbidden in the AT&T contract are illegal anyway, and much of the language is standard across many carriers.
But the restrictive nature of AT&T's contract does stand out. For example, AT&T language says, "data sessions may be conducted only for the following purposes," and then lists browsing, email, and intranet access.
Verizon's terms of service puts it this way: "You can use our Data Services for accessing the Internet and for such things as: (i) Internet browsing; (ii) email; (iii) intranet access ... (iv) uploading, downloading and streaming of audio, video and games; and (v) Voice over Internet Protocol (VoIP)."
T-Mobile's contract falls somewhere in between. It reads: "Your Data Plan is intended for Web browsing, messaging, and similar activities on your Device and not on any other equipment. Unless explicitly permitted by your Data Plan, other uses, including for example, using your Device as a modem or tethering your Device to a personal computer or other hardware, are not permitted.
Sprint’s contract merely prohibits illegal activity, or “excessive utilization of network resources.”
AT&T’s restrictive list of unwelcome behaviors offers considerable detail.
“Examples of prohibited uses include, without limitation, the following: (i) server devices or host computer applications, including, but not limited to, Web camera posts or broadcasts, automatic data feeds, automated machine-to-machine connections or peer-to-peer (P2P) file sharing; (ii) as a substitute or backup for private lines, wirelines or full-time or dedicated data connections,” it reads.
AT&T's lawyers are grabbing as much legal ground as they can to support any possible usage challenge, Rasch said, "to make it easy for them to enforce their rights at some later date."
The problem is, even if the contract isn’t functionally restrictive, it raises doubts about the future Rasch argued.
"Show me where in contract it says I can use Slingbox, unless you consider Slingbox to be Internet browsing, which is absurd,” Rasch said. “And is FTP use Internet browsing? The problem is they can decide at any time that doing these things is a violation of their terms of service and terminate you, and you would have no legal recourse."
The real problem with such assertive language, even if it's loosely interpreted, is the chilling effect it could have on mobile broadband technology, said Michael Weinberg, staff attorney at Public Knowledge.
“If i am the kind of consumer who tries to stay on the right side of the law, I could read this and worry – should I use my Slingbox? Will I wake up one day and find it's been cut off?” he said. He conceded that there are good reasons to terminate network abusers, and that there’s nothing wrong with AT&T’s decision to spell out restrictions in detail.
“But they talk about things like web broadcasting, saying you can’t do that. But web broadcasting is really an undefined term. You can download an app right now that lets you use your phone to broadcast what’s going on to the world using your phone. Why should that be restricted? We don’t even know what that will turn into,” he said. “This is a classic problem a terms of service policy where they reserve the right to cut people off. They don’t necessarily enforce it, but it’s there if they need it.”
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