AT&T to Cap Data Use, Stick ‘Hogs’ With Extra Fees

AT&T is going to start placing caps on data usage for its DSL and U-Verse customers beginning May 2. Users who exceed a 150 GB data cap will be charged US$10 for every additional 50 GB of data consumed.

Most DSL customers use about 18 GB a month, AT&T said, which means only 2 percent of its Internet customers are likely to be impacted by the data cap. U-Verse Internet customers have a 250 GB cap.

AT&T will notify customers when they have exceeded certain thresholds every month: namely, at the 60 percent and 90 percent data allowances, and after they have exceeded their full monthly allowance.

It will also offer tools to monitor customer activities and examples of the types of activities that use up the most data.

AT&T publicly confirmed reports of its plans that appeared in media outlets, but it did not respond to the E-Commerce Times’ request for comment by press time.

Comcast’s Caps

This is not the first time a broadband provider has instituted data caps.

Comcast did so a few years ago, but in a ham-handed fashion and without providing information about how much bandwidth each customer was using.

It also cut off, or throttled, customers’ access to certain P2P services, prompting intervention from the FCC and fueling a Net neutrality tussle that is still playing out in Congress and in the courts.

Today’s Data Hog, Tomorrow’s Everyday Consumer?

AT&T appears to be trying for a more conciliatory approach by portraying the caps as necessary for only a very small percentage of the user base that it characterizes as “data hogs.”

Trouble is, the activities that are now earning the “data hog” label — file-sharing, video conferencing, high-definition movie downloads, constant online video viewing — are likely to become commonplace activities soon.

There’s a good chance AT&T’s moves will be accepted by its customer base, especially as they are couched in terms of necessity and accompanied by tools to help customers keep from going over their caps. More than likely, other providers will follow suit. In the long run, however, the caps may just be a stop-gap mechanism for providers.

“What telecom providers see as high usage today will be average use tomorrow,” said Rick Rotondo, VP of marketing for xG Technology.

The expansion of online content and video services, to name just two drivers, will be the reason, he said. As that happens, it will get harder and harder for telco providers to impose caps.

Besides having to incent high users to exercise restraint, providers will have to build out additional capacity in their networks, Rotondo predicted.

“We are all morphing into hogs, from the operators’ perspective,” Patrick Lopez, CMO of Vantrix, told the E-Commerce Times. “The very fact that the majority of users are stepping up their consumption means that eventually there will not be enough capacity in the network for everyone.”

Also, more consumers are abandoning cable and satellite television services altogether, streaming content over the Internet instead. That introduces another wrinkle for providers that bundle their Internet, TV and telephone services.

“While they are happy to see Internet usage increase, the shift in usage does cause resource management and investment problems for these companies,” said Lopez.

For that reason, the providers will likely find it is not sustainable simply to charge for additional capacity, he continued. Rather, they may choose to invest in intelligent billing and similar solutions that will allow the carriers to better target specific uses with appropriate fees.

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Marketers: Beware Florida’s Mini-TCPA

If you do electronic marketing of any kind, you’ve been a captive audience to the ever-changing requirements of the federal Telephone Consumer Protection Act, known familiarly as the “TCPA.” But now, the state of Florida has amended its Telemarketing Act, creating what is being called the “Mini-TCPA.” Florida’s new law changes electronic and telemarketing in significant ways — even if you’re not in Florida.

Years of litigation over the federal TCPA has taught most companies to understand the different forms of consent, how to distinguish sales calls from informational calls, what kinds of call could legally gather information from consumers without straying into highly restricted “sales calls,” and what in the world constitutes an automated telephone dialing system (ATDS).

Now, just as we thought the law was settled — or at least settling — the new Florida state law overturns the apple cart. Many of our prior understandings are out the window. Telemarketing practices will have to change substantially, and the costs of violating the Florida law will be substantial.

Law Applies Even if You Don’t Do Business in Florida

The new statute covers any call made to any device with a Florida area code no matter where the receiving phone is located, and calls made to a person who happens to be in Florida at the time they receive a covered call.

In either case, the calling company will be considered to be “doing business in Florida” and therefore subject to the Mini-TCPA. That’s true even if the calling company has no way to know that these seemingly non-Floridian numbers in fact have some relationship to Florida.

In either scenario, there is a “rebuttable presumption” that the calls are covered by the Florida statute. “Rebuttable presumption” means as a practical matter that government regulators or class action plaintiffs can make you spend lots of money in attorney’s fees trying to prove that the calls weren’t covered.

For economic reasons, many businesses will end up making the business decision to settle these cases rather than litigating the law’s application to them.

Role of the ‘Private Right of Action’

The big danger presented by this statute is the claims that may be made by private parties, not government enforcement actions. That’s because the new Mini-TCPA contains a “private right of action.” Any consumer can sue you claiming you violated the statute. Those suits can be class actions, real or threatened.

Although the statute appears to limit recoverable damages to a maximum of only $500 per violation, that figure is a red herring for a couple of reasons. Plaintiffs tend to claim that each individual call to their phone is a separate violation. One consumer’s calls can quickly become multiple violations and therefore multiples of $500.

In addition, under some circumstances, the law trebles damages. The Mini-TCPA provides for triple the damages and attorney’s fees if the violation was intentional. Since marketing and informational calls are both generally the result of a pre-planned marketing campaign, every call is going to be asserted to be intentional.

Moreover, general Florida consumer law allows recovery of attorney’s fees and, potentially, statutory additional punitive damages.

The ATDS Rabbit Trail

All the noise generated by litigation around the federal TCPA about automated telephone dialing systems may have given businesses the impression that if you avoid using particular kinds of ATDS, you can be sure of avoiding liability. But here again, Florida’s new law changes the game.

Instead of diving into the controversy over what constitutes a covered ATDS machine, Florida simplifies the issue — and expands the danger zone. The new statute focuses its attention simply on “automated systems.” The definition of “automated system” under the Mini-TCPA is much broader than the federal TCPA’s.

As defined by the Mini-TCPA, it encompasses any system that does any one of three things: it either selects the persons to be called, or it dials calls, or it plays recorded messages. It’s hard to imagine a telephonic machine (including the one in your pocket) that isn’t potentially covered by this definition.

Mini-TCPA Goes Beyond Classic Telemarketing

Many businesses’ response to warnings about the applicability of the TCPA to their operations was “we don’t do telemarketing.” That’s because a distinction between telemarketing calls and informational calls has been enshrined in telemarketing regulation since the enactment of the TCPA law. Telemarketing calls were the bad ones; informational calls were the good ones. Later generations of FCC regulations, rules, and orders focus on this difference.

Again, Florida’s Mini-TCPA breaks new ground. While the new Florida statute regulates “telephonic sales calls” made for the traditional TCPA and telemarketing purposes, it appears that the new statute goes further. It now seems to include calls marketing products and services that were in the grey area of TCPA coverage. For example, extensions of credit.

“Non-commercial” calls are going to be exempt from coverage by the Mini-TCPA, but only if the caller has some level of licensure or certification e.g., IRS Section 501(c) and Florida state registration.

However, some authorities say that the statute also covers calls made for ultimate purpose of obtaining information for later use in sales. If this is the case, any calls used to harvest consumers’ personal information for later use in sales will require the called party’s prior express written consent under this statue.

Much of this sits squarely in a grey area. Litigation and additional legislation will certainly affect what the law will actually say. The true application to your individual marketing strategy is going to be hard to predict. Seeking legal counsel is going to be crucial to making wise decisions in this area.

Establishig Consent

If the TCPA taught us any clear lesson, it was that to make (almost) any call “legal” all you needed to do was get the called party’s consent.

What constitutes the appropriate level of consent under TCPA depends on various factors: kinds of calls, call technologies, kind of phone called, who was making the call, etc. For that reason, determining what level of consent is required for any given call under TCPA can require a complicated and troublesome analysis.

The new Florida law simplifies all of this: it mandates that the only acceptable consent for all covered calls is prior express written consent. It then carefully defines what prior express written consent must look like, with several required qualifying elements:

The consent must be in writing, bear the signature of the called party, “clearly authorize” a call using an automated system, include the authorization to call a particular number specified by the calling party, and inform the called party of certain enumerated rights.

In addition, the call must provide to consumers identifying information about the calling party. The new statute also requires that the calling party must maintain records of calls made and the consent obtained.

Sleeper Provisions

The Mini-TCPA, like the federal TCPA, is long and convoluted. There’s too much in the law to cover all the provisions in this short article. So here are some other provisions that may be worth a look:

  • Limitations on call frequency and timing;
  • the way information mining calls will be treated;
  • the liability of a company for the violations of its third-party contractors;
  • the requirements for callers to transmit identifying information; and
  • potential criminal penalties for certain activity.

There is good news, nonetheless: the Mini-TCPA law provides a long list of types of calls which are exempt from coverage by the new statute. However, the exemptions are many and complicated. Many provisions provide an exemption from liability under the statute, then take the exemption away with exceptions to the exemptions.

Competent legal counsel is a must before deciding that a company’s telemarketing is exempt from the statute.

A Final Thought

It’s easy to think that the real threat of this statute is actual litigation. It’s not. It’s the Hobson’s choice presented when your company receives a claim from either government or a private party.

When you receive a claim under the statute, if you weigh the costs of fighting it or settling it, you will quickly come to an ugly realization. Every claim can cost you upwards of $1500, plus attorney’s fees for the claimant, on top of paying your own attorney, plus trebled damages, and other possible damages.

It will almost always turn out that the potential out-of-pocket cost to fight even a bogus claim is going to be much larger than the settlement demands from a plaintiff. Given the possible downsides of litigation, good counsel may well urge you to settle any claim as quickly and as cheaply as possible. If you consider the economics when determining how to respond to a claim, this makes sense.

All of that puts a higher premium on prevention. Talk to your lawyer about how this statute might apply to you, what your exposure is, and how you might bullet-proof your marketing strategy.

The only sure way to win at these claims it to prevent them from being filed.

This article is provided for informational purposes and does not constitute legal advice. The purpose is merely to make the reader aware of some issues that must be addressed by legal counsel. This article cannot substitute for the advice of competent legal counsel addressing the reader’s specific situation.

Brad Elbein is a partner in the Atlanta office of Culhane Meadows, PLLC and is co-chair of the Government, Regulatory and Compliance Practice Group. Brad guides clients through matters involving telemarketing, electronic marketing, advertising, consumer laws (FTC Act, FDCPA, FRCA, TILA, and more), and defense of consumer law claims by government and by consumers.

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Finding the Fun in Non-Fungible E-Commerce

non-fungible token (NFT) virtual museum

NFTs in a virtual museum metaverse display.

Non-fungible tokens, or NFTs, are still a relatively new movement in digital consumerism. However, their impact has already created a long-lasting effect that will transform the e-commerce market in the years to come.

NFTs are individually authenticated, verifiable, and non-interchangeable items. Complete with unique identification and metadata, they are genuine one-of-a-kind objects with only one official owner at any given time.

Well-known brands are willing to invest in NFTs, even at this early stage, because they help boost the user experience, increase brand awareness, and expand opportunities for brand engagement, according to Vinod Varma, founder and CEO of Creator.co.

The NFT market has experienced 10-times growth over past last two years and market watchers expect the momentum to continue.

New Revenue Stream

With the adoption of NFTs, both brands and influencers can now create unique content capable of being monetized and enable followers to own a unique collectible piece.

“NFTs can aid a brand’s equity, create publicity for a product launch or brand event, or be used as a form of customer appreciation, serving as a unique custom gift or coupon,” Varma told The E-Commerce Times.

As this trend persists, brands will begin to see that an entirely new form of revenue is opening up with NFTs, as goods can now be sold in a completely digital format instead of a physical product.

“Brands and influencers who partner together to create innovative content will be able to leverage numerous benefits and only strengthen the relationship with each other and their audiences,” he added.

Different From Crypto Money

NFTs and cryptocurrencies are both based on blockchain that uses similar innovations and standards. Both draw on a similar target market. But they are not the same.

Think of NFTs as a subsidiary of crypto, meaning they can be traded and sold but with a cryptographic form of money. In their most basic context, NFTs are a unit of data stored on the blockchain in the form of a digital ledger that can be sold and traded, explained Varma.

The main distinction between the two is indicated in the name. Cryptocurrency is a currency, and that means, just like other currencies, it is fungible and only has monetary value, he clarified.

Essentially this means that with crypto, it does not matter which tokens an owner has. It will ultimately have the same value as the next one, and so forth. An NFT’s value comes from its uniqueness and the fact that it cannot be equally replaced with something else.

Non-fungible tokens are not a type of currency that serves as an equal exchange among all holders. Instead, each NFT is unique to each individual who owns it.

What’s the Difference?

That difference may lack a distinction to some people. Consider this comparison, suggested Varma. Cryptocurrency, like bitcoin, is fungible. An individual can trade one bitcoin for another and will still have the same coin.

However, NFTs are a one-of-a-kind trade that is non-fungible. So if you traded one NFT for another, it would be completely different.

Still not finding that difference to have a distinction? Perhaps a rundown on how NFTs actually work in transactions will blow away the fogginess.

How NFTs Work

At a very high level, most NFTs exist on the Ethereum blockchain. Other blockchains can also implement Ethereum’s versions of NFTs, but for the most part, Ethereum is where most of them live, according to Varma.

Ethereum is a cryptocurrency but supports NFTs by storing extra data that allows them to work differently than an ETH coin, he noted. NFTs are individually authenticated, verifiable, and non-interchangeable digital items.

Complete with unique identification and metadata, they are genuine one-of-a-kind objects with only one official owner at any given time. They are bought, sold, and traded with this at play, Varma added.

Understanding the difference now? Let’s dig deeper.

Driving Factors

Brands and influencers are willing to invest in NFTs, even at this early stage, because they help boost the user experience, increase brand awareness, and expand opportunities for brand engagement. Why the adoption has picked up so much speed takes a few reasons to answer.

Brands can utilize NFTs in mobile advertising campaigns, which can be distributed strategically across different digital outlets, and monetized numerous times, noted Varma.

The ultimate usefulness is giving both brands and influencers the ability to create unique content that is capable of being monetized. This, in turn, enables followers to own a unique collectible piece.

“The NFT market is not just an option for those who are internet-savvy. NFTs hold the key to creating a widely accessible and transformative market for all individual creators. Even though the accessibility is high, the awareness and relevance of NFTs are still relatively low for the everyday consumer,” Varma offered.

One way to ensure widespread adoption is to have the NFT market be saturated with content that provides relative value to the market itself.

After the pandemic, and with the digital transformation, individuals are now ready to participate in the types of technology that allow for instant, easily accessible, peer-to-peer sharing, he said.

So that is the point of NFTs.

Point Taken, But Why Do We Need Them?

That answer, suggested Varma, depends ultimately on whether you are a creator or a consumer.

Follow along to understand better Varma’s reasoning on this point.

For creators, NFTs serve as an option to sell unique work to a market that has never existed before. It also allows for more awareness and visibility of the corresponding product than ever before.

“NFTs also have a feature that creators can enable which pays them a percentage every time the NFT is sold or traded, ensuring that if the creator’s design becomes popular, they will reap some of the benefits,” explained Varma.

Consumers want NFTs for several reasons. First and most apparent, buying art allows you to financially support artists and own designs you like while retaining fundamental and unique usage rights.

Plus, you get the fantastic bragging rights of owning your unique NFT. However, suppose consumers wish to take the investment route.

“In that case, NFTs can also work like any other art asset. The consumer purchases the piece with the hopes that the value will continue to increase, and one day it can be traded or sold for a profit,” he said.

Wait, There’s More

NFTs are starting to usher in a new form of social commerce that empowers creators, consumers, and brands, added Varma. They allow small businesses to harness public blockchains for producing digital goods.

This ability can be delivered instantly to a crypto wallet. An NFT is a one-of-a-kind digital object that serves as an authentic way for customers to make a profit from the retail platform.

Here is how NFTs empower brand and influencer relationships, according to Varma, it comes down to possibilities.

“The possibility of what an NFT can be is always growing and has already enabled many creators to flesh out their own innovative ideas. This creates an opportunity for brands and influencers to work together like never before,” he said.

From videos to virtual houses, music, artwork, online races, and digital collectibles, NFTs continue to grow in originality and type. Additionally, the number of marketplaces that sell NFTs is only increasing, meaning all of this is just the beginning, he predicted.

“The most significant takeaway for brands and influencers is that NFTs are not simply a recent trend or the latest fad. They are impressive digital entities that exist solely in the digital ecosystem but supply value in the real world.”

As our culture becomes more and more focused on digital, NFTs will increase as organizations and people use them as investment opportunities for the new virtual climate. While most people may still favor physical assets the most, NFTs are the way of the future, he added.

Whether a virtual collectible, music selection, or digital piece of art, NFTs allow both brands and influencers to join together in a unique way to leverage both digital content and intellectual properties.

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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