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AT&T Puts a Price on Privacy

By Erika Morphy
Feb 23, 2015 5:00 AM PT

Users who want to sign on to GigaPower by AT&T, the carrier's 1-gigabit-per-second Internet service that just become available in Kansas City, Missouri, have an interesting choice. They can pay US$70 with the understanding that their online movements will be tracked for commercial purposes -- or they can pay an additional $29 a month to avoid the monitoring.

AT&T Puts a Price on Privacy

The service so far is available only to a select few customers. It went live in Austin, Texas, about a year ago.

Since then, "the vast majority have elected to opt in to the ad-supported model," AT&T spokesperson Gretchen Schultz told the E-Commerce Times.

A New Option

The service offers a choice to consumers who are concerned about privacy, said Jeff Kagan, an independent telecom analyst.

There are some consumers who in fact are willing to pay and will go to AT&T for that reason, he told the E-Commerce Times.

It is the same dynamic that has played out between Apple and Samsung, Kagan added. Apple is the smartphone known to be completely closed, with its data fiercely protected by Apple, while Samsung has an open environment, and people understand privacy is less than optimal from the consumer's perspective.

"AT&T is setting up the same choice between it and everyone else," Kagan said.

AT&T: Tracking Isn't Evil

AT&T is not favoring its higher-priced service, however. With the discount plan, consumers won't see more ads, the company pointed out. It's just that the ads they do see will be better suited to their interests.

The typical information it would collect might include the Web pages visited, the time spent on a certain page, the links or ads followed, and the search terms entered, the company said.

Here is what it doesn't collect: information from secure sites (https or otherwise encrypted) -- such as credit card information entered in order to buy something online or data from online banking transactions.

Beware of Breaches

AT&T's promises notwithstanding, customers must understand they are at risk, no matter which service they choose, cautioned Ross Buntrock, a partner in the privacy and consumer regulatory practice at Arnall Golden Gregory.

If AT&T were to suffer a data breach, customer identities and other personally identifiable information in all likelihood would be exposed, he told the E-Commerce Times, regardless of the company's pledges to protect the information using encryption or other means.

An Industry Shift

It is likely that other providers may follow AT&T's lead, if only to remain competitive. It is just as likely that most consumers will opt for ad-tracking service plans in order to lower their costs. The tracking that service providers already have been doing thus will become institutionalized.

"It must be said that at least AT&T is giving consumers some level of choice whether to share granular information or not," Buntrock said. "Companies like Facebook and others do not offer consumers the ability to pay for privacy."

Erika Morphy has been writing about technology, finance and business issues for more than 20 years. She lives in Silver Spring, Maryland.

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