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High-Speed Greed 239

Posted by michael from the drag-them-kicking-and-screaming dept.
cprael writes "AT&T has decided that anyone using their broadband network is their customer, and any online merchant that sells them something owes AT&T a cut of the pie. They are apparently planning to charge for both delivery of the customer, and for the value of any goods/services bought by those customers. Article on Yahoo News." See also a CNN story on the same subject. Hey, it's just like the phone company takes a cut every time you phone in an order from a catalog... oh wait, they don't.
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High-Speed Greed More

High-Speed Greed

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  • AT&T will be able to kill net buying for all their customers. I'm sure they will keep a big customer base when the consumers realize online retailers refuse to sell to them.

    Happy Joy
  • From what I got out of the two articles AT&T is gonna charge merchants a per-transaction commision-style fee for referrals. Web-based advertising referalls that is. it would be impossible for it to happen any other way. So while the vast majority here rant and rave about some form of internet tax being imposed by AT&T, it's really nothing more than a change in how they charge their advertising. Tracking it becomes a non-issue because of the contract you'd have to sign to get the advertising space they're selling. My first impression was that they were going to try something like if Chevy were to charge Wal-Mart for me driving to the store in my car, but what's really happening is if Chevy charged Wal-Mart a commision on what I buy there after driving to the store in my car that has an ad for it on the dashboard. The differance is a little subtle, and the articles didn't do much to define exactly what was happeneing.
  • I don't think this would work. I'd switch carrier for my e-store. If the Net as a whole goes this way I'll join whatever group branches off a 'free' net (generic term, not the software) and just ignore greedy corporate munks like AT&T. As a user of @Home cable modems I'd be really pissed to find out they were doing this to e-stores I used. It'd drive prices up for me.
  • If they are paying attention to packets, they are not common carriers, and are thus liable for any illegal content (child porn, drug deals etc) that they deliver too.
  • "How exactly would you determine that a purchase was made..." They don't want paid just for the purchases, but if one browses the site too. Armstrong was supposed to be the ATT savior. This is the DUMBEST most IDIOTIC thing I've ever heard. So in the future, if I read an ad in the LA Times then call Nordstroms for an order, will the Times get a piece and the telco over which I placed the order. The local RBOC AND the long distance carrier if it's not a local call? T is at a 52 week low. This should cut it down further as any self respecting web site should start to abandon them in droves even at the hint this is going to take place. And if ATT can't get enouch money in a quarter cause they can't handle the 100billion he spent on cable to provide phone and broadband, what happens... they tell all ATT employees to visit all their hosted web sites to pump up the income or something? Don't like a site so anyone can just drive them out of business by 'browsing'. Sounds like they'll actually promote DOS attacks, as I'm guessing they'll want money for any site hit, period. I sold my T stock some time ago, after my problem with them showed me they have no idea how solve a problem. I sure understand how it's dropped to the mid 20's. It's truly a shame. ATT was one of THE branded names... but it sure don't shine these days!
  • They're doing it - because they can.

    Can BT or AT&T monitor your phone call and find out that you're ordering something? No.

    Can BT or AT&T scan your packets, see which host you're talking to, and maybe even detect if you've "1-Click"'d at Amazon? Yes.

    It's disgusting. If only there was a competitor....
  • If by some reason I can't think of they manage to force merchants to pay then the sites will probably pass it on as an "AT&T surcharge" - this will piss off AT&Ts customers.

    I can see it now: just below "CA residents add 8% sales tax" on the order form is the "AT&T customers add 2% corporate greed"... :-)

    I am just waiting for some highway authority to say: "Hey! Your customers drove on our roads to get to your mall! You owe us a percentage of sales!"

  • We move our phonecalls to the web because it's cheaper... The phone companies then pass the costs/lost revenues/taxes over to the servers... Who then recoup their costs by charging us to use their services.

    Well, I'm glad we got that one sorted out.

  • I concur - the idea is ludicrous. If AT&T kept track of every merchant's site their customers wnet to and purchased from (which'd be a royal PITA) and then billed the merchants, then they'd be laughed off the face of the market. If instead they somehow got the merchants to agree to sign a contract, then it'd make sense, but as far as I can tell there are only two ways to do this - offer to promote the merchant's site or threaten to block traffice to it.

    The first is a dying revenue model of advertising - big deal. The second scream "unfair business practices! Sherman Antitrust Act! DOJ! HEEELP!"

    So yeah, AT&T isn't stupid - they're going to put their necks in the noose like that.

  • They were also quoted a couple of months ago in the Washington Post, saying that their numbers indicate that the only branch in e-commerce which "has no difficulties making a profit" is the porn industry. They declined to say what percentage of their traffic can be attributed to porn on their networks. (This is no flame, I am just too lazy to search for the article, it was written at least four to five months ago)

    They are shrewd and very sure of their own analysis to consider such move without fear to loose a customer base. I don't think they worry about other e-commerce branches, which are not profitable enough to begin with.

  • >I am just waiting for some highway authority to say: "Hey! Your customers drove on our roads to get to your mall! You owe us a percentage of sales!"

    All ready exists.

    Fuel Tax
    Toll roads

  • Charges based on the client's ISP would not be unenforceable. All AT&T would have to do is tell Amazon.com, "If you don't agree to give us a cut of all sales that come from AT&T customers, we'll block all traffic to your site."

    AT&T wouldn't have to block traffic. Time is money; and faster web site response equals greater sales. AT&T not only owns the wires, but their end of the network routing tables. Amazon doesn't want to play? Fine. All traffic between @home suscribers and www.amazon.com gets routed through a ISDN switch in Pakistan instead of a NAP right into the AT&T optical backbone colocated with Amazon's servers.

    "Gee, the B&N site seems so much faster this month, maybe I'll shop there instead."

    Suddenly the Amazon accounting department figures out how to identify @home purchasers.
  • First, ATT has no monopoly on business web hosting, and if they try to implement this policy web hosting customers will stay away in droves. The articles were more than vague about how ATT was going to enforce their billing in an SSL-enabled world, they neglected the subject entirely.

    What could they do? Filter out connections to business IP addresses who refuse to pay netgild? Not with this or next year's technology. Filter whole netblocks unless all merchant sites submit? Probably lawsuit material.

    And they would have arrayed against them not just their customers but all the businesses that would be impacted, and their lobbyists. Count this under "wishful thinking" on ATT's part.
  • imagine this would require retailers to check which pipe an order came through, and AT&T to audit that information.

    But of course... Amazon would get sick of having to see if it came in through an AT&T line or not, and they would thus buy all AT&T lines to simplify things... Wait - this implies that they have lines from people other than AT&T. In that case, they could just drop AT&T!

    I don't think it's possible for AT&T to follow through with this plan without driving their business into the ground.

    ...............
    SUWAIN: Slashdot User Without An Interesting Name

  • >>Hey, it's just like the phone company takes a cut every time you phone in an order from a catalog... oh wait, they don't.
    >Sure they do -- someone's paying for that 800 number.

    This assuming there IS an 1-800 number.
    When I do catalog orders I end up paying postage..
  • Seriously there hasn't been an idea this dumb since Ray shouted "Get Her" in Ghostbusters Let's consider the following:
    1. How do they ever enfoce this idea? -- Are they going to block every https site out there? Monitor every website for a shopping cart? Sending threatening letters to merchants in the Caymans who won't fork over the dough?
    2. Is anyone going to subscribe to an on-line service that can't access Amazon? LandsEnd? I mean sh^t a 56k modem is slow, but if I can't reach my favorite merchant who cares, I'll dial in.
    3. The whole value of the Internet is that its a network of networks, where everyone can reach everyone else. Take that away and the thing is worthless.
    4. Whats next charge for each e-mail? Go back to pricing by the kilocharacter?
    5. Even if the merchants decided to pay, why wouldn't they just pass the price onto the customer with a breif statement on their site saying you could save 10% just by switching to AOL/prodigy/whatever.
    In summary if this is T's big plan to revive their revenues we should all just start shorting thier stock now because they'll be broke real soon. Even if they never implement this idea, the fact that they even mentioned it, was absolutly stupid. Releasing this idea as a trial ballon only creates negative equity for the AT&T brand, and since it can never be implented; you just make yourself look mean and stupid.
  • > in a manner similar to the way that shopping malls charge rents to tenant stores The web hosting companies that provide the web services to these merchants are like the rent that malls charge. This is more like a surcharge. The store gets charged for every individual customer that walks through the doors of the mall just because that customer will 'see' the store. And an extra surcharge if the customer buys anything.
  • >It's disgusting. If only there was a competitor....
    My appartment manager signned a deal with a company that provides broudband (Cable modem) to bring in lines of there own.
    (I don't know how that works)
    So we have two cable jacks.. one for AT&T and one for Siren (or whatever)...
    I use nither but plan to give Siren a try...
  • Everyone talks about the weather. No one ever actually does anything about it.

    'nuff said

    Thank goodness we have the internet to blow hot air so we are not adding to the environmental problems out there.

  • Quoth the raven, err, parent:
    That would be double taxation and obviously wrong.
    • Bob works for GM, and saves money over the years. He invests some of his net pay (after tax pay) in mutual funds.
    • Then his friend Bill tells him that he's putting together a great startup, and asks for some Venture Capital. Bill tell's Bob that he would be pre-IPO, which clinches it for Bob.
    • So Bob takes some money out of his mutal fund, paying capital gains taxes on the amount over his investment. (BTW, this taxes the money created by inflation [which isn't truly a gain for Bob, just keeping up with the Federal Reserve], as well as the real profit.)
    • Bill and company do very well, and the IPO is wildly successful. But Bob doesn't have faith in Bill or his company, so Bob sells his stock a week after the IPO. And Bob pays capital gains taxes again.
    • Bob takes this money and buys a car to replace his 15 year old clunker, paying taxes on the car.
    • Bob decides to give up his apartment in the city and move to a small town, so he takes the rest of the profit from the IPO (and some other savings he was wise enough to keep away from Bill) and buys a house. Bob pays all sorts of taxes on this house, and he has to pay property tax each year. (Pet peeve: why is a property tax based upon the appraised value of the land and buildings? My grandparents paid off their house decades ago, why should they pay a few thousand dollars each year when they are just living at home? Property taxes have forced people to move because they couldn't pay the 'taxes' on land owned for decades, especially if the owners have fixed incomes.)
    I agree that double taxation is wrong, but it seems to be the law of the land. I don't see any easy solutions. Sigh.

    Louis Wu

    "Where do you want to go ...

  • well... (Score:5)

    by Eupolis ( 17084 ) on Monday October 09, 2000 @06:55PM (#719336)
    Hey, it's just like the phone company takes a cut every time you phone in an order from a catalog... oh wait, they don't.

    Sure they do -- someone's paying for that 800 number. The business you call pays for it. A lot. And the interexchange (i.e. backbone) carrier that takes the call gets a chunk of that money from the carrier who provides that 800 number to the business -- though that's a cut of the phone call, not a direct cut from the order.

    However, I do not think we want to see the sort of rate system established in internet transactions that exists for telephone calls, nor do we want a set of elaborate contractual schemes where backbone providers require local providers to require contracts from merchants to cooperate with this sort of thing. I am curious to know how AT&T plans to enforce this sort of fee. It seems the plan must refer only to internet merchants who are themselves AT&T customers (as with the merchants and providers on the PocketNet service). They can't just walk up to a merchant who has no direct contractual relationship with them and start demanding money. But it seems to me that that is an awfully good way to send those merchants over to WorldCom, Sprint, or other broadband providers. Is AT&T planning to put pressure on every local network provider connected to its backbone so that the endusers pay settlement-rate-like fees for every transaction that passes over its backbone? Do they want their broadband services to tank like their long distance services are?

    I don't like the idea of the charge. To accomplish what they want to, they'd probably have to get other backbone providers to do the same thing (which would be anticompetitive, and would start raising antitrust issues). If they want to get at every transaction, they'd have to get deals from those who connect to their backbone to get deals in turn from their subscribers. The whole thing smells a little odd.

    Hm.

  • Like many other @Home customers, I was fat dumb and happy until about 3 weeks ago, when I received my cable modem it was rated at 1 mbit up, 3 down all was good until they decided to 'servers' by limiting upstream to 128 kbs, on top of that if you have a backgroup upload running, and it gets limited, your downstream is limited as well the official response is that it improves the service for 99% of the users.... take my advice, do not use them any longer then you have to, they invented this game, if you pay them, they will win.
  • Yeah, but most end users don't really know much about stuff like this. If AT&T has the lowest prices anyways (since it does have a monopoly) and it can control its prices to a point of being cheap enough, it will be more suitable for any end user to go through them because it doesn't affect them directly. AT&T will not lose many customers because many people don't have enough knowledge to be hopping from ISP to ISP. Many people are content with the serivce they start off with and don't have the want to change because their service is excellent. I don't know if AT&T has good service, but I would assume this has no effect to the user base (except for the people who read this on CNN and /.)
  • "If you don't agree to give us a cut of all sales that come from AT&T customers, we'll block all traffic to your site" If it's done for economic reasons such as this, IMHO, it'd be time to look into 'restraint of interstate trade', of which there is much legislation on the books.
  • HA. Great idea.

    I can see it now. People set up massive mp3/mpg files on their server and choke the hell out of it, but to cover their bandwidth costs they set up a small shopping area which sells something stupid like thimbles that look like Bea Arthur. (which of course no one would buy)

    "Sorry ATT, I only sold one Bea Arthur thimble this month, your cut $.05. BTW, I think I need to upgrade to a OC3. I'm sure I'll sell more Bea Arthur thimbles next month with the wider pipe."

    Heh heh.. Where do I sign up?

    MP

  • Wow, i think this is Reuters messing up. (Score:3)

    by dieman ( 4814 ) on Monday October 09, 2000 @06:56PM (#719341) Homepage
    I think that reuters screwed the story up. I bet this is AT&T saying that they will offer placement and full hosting (ala akamai style) for internet etailers.

    Anyone have an actual press release, and not this drivel from reuters?
  • "Actually the phone company does get a cut in phone orders. Either you or the company you are calling are paying toll charges. 800 numbers aren't free, the recipient just pays the bill." There's no logical comparison to getting a 'cut' in phone orders to taking a percentage of sales. The 800 numbers simply permit the recipient to pay for a long distance call vs. the caller. The long distance is being paid for their services in providing long distance. They do NOT get anything based upon anything being ordered or not ordered, or the value of any order placed. They are looking more at things like mall leases / brick and morter comparisons that may charge tenants a percentage of gross sales as part of their lease. What they seem to forget is that this is virtual brick and mortar and one can move pretty quickly vs. a store in a mall. What I'm trying to figure out is who actually thought up this idea and who let it actually get to the point of going public...and if they still work for ATT. (well, and how 'virtual' stores have already called the 'movers')
  • This might be just another ploy some genius thought up to see if they can get away with it. Why not come up with lame schemes to see if there's money to be made? There's one born every minute after all.

    This whole trend is getting ridiculously tiresome. I think it's time to start paying my membership fees to the barter society [schumachersociety.org]
  • now that gorcery stores, bookstores, electronics outlets, entertainment facilitites, magazines, fashion retailers, restaurants, gas stations, and home contractors have all gone out of business because of massive online purchasing -- i'm forced, absolutely forced to buy every product or service through my @home connection.
    this will destroy morality, democracy, and The Children!!

    c'mon, people, what's the deal here? ATT can't possibly bill a webmerchant simply because an @homer ended up on their page -- even ignoring the technical/paperwork nightmare involved in tracking and generating Accounts Receivable statments for every single user's every single click, there is no way to enforce such a policy:

    @Home: Merchant, you owe us $27,300 for the people that accessed your page during the last week using our service.
    Merchants: Um, but we didn't invite your users here. Someone posted our URL on Slashdot and all the geeks just flooded in.
    @Home: Still, they got there using our wires, so you better pay up!
    Merchants: Whatever. Honk off, Bozo.
    Federal Judge to @Home: Yeah, Honk off, Bozo!


    the problem with teens is they're looking for certainties
  • Well, of course it was taken out of context. How would this work, exactly? You, Mr-Hip-Online-Merchant get your Internet service provided by MCI. One day you get a bill from AT&T, a company you have no contractual relationship with, in the mail demanding a cut of all the sales AT&T says came over its network? That wouldn't be worth the paper it's printed on. A more likely plan is this: AT&T is mulling replacing flat rates for service to the merchant with a percentage-of-sales rate, in a manner similar to the way that shopping malls charge rents to tenant stores. Maybe they charge a little bit extra if the sale comes in from a AT&T broadband customer, maybe they don't. What isn't going to happen is the scenario described in both those articles, where Joe-Random-Company gets a bill just because an AT&T customer bought something from them. Not unless AP departments achieve a whole new level of stupidity. Gotta luv web-reporting.

  • Other thoughts (Score:3)

    by ackthpt ( 218170 ) on Monday October 09, 2000 @07:00PM (#719350) Homepage Journal
    Whether or not this will work is doubtful, but it's nice to see that the Robber Baron techniques don't change over the centuries.


    There was something early farmers used to organize against the oligarchy of rails, called a grange, basically giving a group bargaining power, like unions. While Freenet is a hedge against greedy ISP's, it may fall prey to something of the nature AT&T is up to.


    --
    Chief Frog Inspector
  • They are NOT planning on charging every web merchant for every web transaction that takes place - obviously that's technically (and legally) impossible.

    It sure sounds like it. The CNN article says:
    AT&T Corp. is considering a plan to charge Internet retailers a commission each time a customer buys something through the telecom's broadband network, an industry analyst said Monday. AT&T would also collect a fee from retailers each time a customer accesses their site through its network.

    I don't know how illegal it is; it's their network, they could argue they're just forming a "partnership". As to how practical it is, simple; if the merchant refuses to agree, just block them.

    Then again, I still haven't been able to get onto Yahoo to check the other article, so maybe the CNN one is off.
    --

  • This is NOT what you think (Score:4)

    by crt ( 44106 ) on Monday October 09, 2000 @08:12PM (#719356)
    They are NOT planning on charging every web merchant for every web transaction that takes place - obviously that's technically (and legally) impossible.

    What they're talking about is charging the merchants that pay for advertising on the AT&T Broadband customer home page - they plan to expand their charging scheme to make it based on purchases instead of just a CPM banner style.

    This is very much the same as the relationship AOL has with retailers - AOL gets a cut of each sale in addition to a referral fee. AOL makes PHAT cash from this arrangement and AT&T just wants a similar system.

    Most geeks will change their homepage off the AT&T broadband page in about 30 seconds after installation, so you won't see their ads and won't shop at "their" merchants, and this won't be an issue.

  • Re:@home (Let'em try) (Score:3)

    by christrs ( 187044 ) on Tuesday October 10, 2000 @03:09AM (#719359)
    Except for those of us where the phone company is so lame (read Ameritech) that they wont get DSL until late 2001 (if then). When @Home is the only game in town, you got to play.

    I hope the merchants just tell @Home to shove their bill up their arse. And let @home try to block them. Could you see the howls if people cant get to Amazon.com or Ebay.com because they these companies won't submit to this type of extortion. I would think that this a good way to get a lot of negative PR (and lose customers!)

  • Well, I've been wanting to go adsl with bellsouth instead of ATT@home. Looks like this will be my soon deciding factor. If this is true does it affect major backbones? This is a very scary topic.

  • This has to be one of the worst ideas I've heard in a long time (and I've heard some bad ones).

    As somebody who knows quite a lot about internet commerce (I founded CyberSource and beyond.com) I can say with a high degree of certainty that the merchants will laugh in the face of AT&T trying to collect money from them.

    It won't fly because:
    1) There is no contractual relationship between a merchant hosted by say Exodus and AT&T - absent the contract how will AT&T assert their claim?

    2) Assuming for a moment that they are stupid enough to block sites that won't pay they would have an instant PR disaster.

    3) If by some reason I can't think of they manage to force merchants to pay then the sites will probably pass it on as an "AT&T surcharge" - this will piss off AT&Ts customers.

    I suspect what we're really talking about here is not taking money from every merchantt - it's promoting some merchants in return for a transaction fee (instead of a page views based model). This is not new and was part of the original @home model.

    Move along folks there is nothing to see here.

    John
  • The answer to this problem is simple. Use a different ISP! This is a problem in which their policy will surely cause them to lose customers.

  • Start thinking railroads (Score:3)

    by Zalgon 26 McGee ( 101431 ) on Monday October 09, 2000 @06:42PM (#719366)
    Railroads are perhaps the best metaphor for what AT&T is trying here. In brief: They own the rails, and want a share of the profits that other RR companies generate using their rails.

    Whether or not this will work is doubtful, but it's nice to see that the Robber Baron techniques don't change over the centuries.

  • I'm an online merchant. ATT thinks I'M goint to pay THEM when someone buys something from my site. They can kiss my ass. I'm not paying them shit. I don't care if they're coming from ATT's network or not. For one, how are they going to prove it, magically decrypt the SSL transaction and read everything that goes on? You don't think the national ISP's keep logs of the sites that are visited, and from what dynamic-IP, and from what user-ID? Hmm.. Mr. Stevens... It seems there were three thousand four hundred thirty two visits to your business' website. At industry averagesof one-half percent, you have done 18 sales. However, our logs show three hundred SSL connections. How do you explain that, Mr. Stevens? I don't possibly see how this could ever work. They bill me because someone else PAID THEM to access their network and use it to buy stuff from me? Whatever. I don't know what they've been smoking, but they've obviously smoked it all. They were smoking the best hash in Amsterdam. That way, they can fail the drug test and legitimize the results. Right now, the net is a loss-leader. Deregulation happened, and the telcos are scrambling to get newer money makers at expense of service and reliability. I mean, a decade and change ago, payphones were all over the place and a local call was a dime. Now, it's 35 cents. IF you find one. (I mean, outside Manhattan.) It costs a nickel off the hardline to call my dialup node, but to call further than eight cable-miles is a dime a minute. My home's wiring is so old, we can't get a second line without extensive work. (We actually have an old Blackphone rotary in our laundry room!) And service will take no less than a MONTH to do anything! All thanks to Amerit-!@#&%!)@#&)(!*##*#! NO CARRIER
  • I know for a fact that I do not get directly charged any amount for any taxes or tolls that the trucks might incurr in getting a package from the wholesaler to my local store.

    I pay for that in the markup at the store. Why should I have to pay AT&T anything beyond the price I would pay for an AT&T account, or beyond the markup the company feels they need to include to compensate for their AT&T connection? If they feel they need their fingers deeper in the online commerce pies, they should raise their ISP costs for the user, either home or business, and see what happens then.

    I bet they won't like it
  • I'm an AT&T @Home customer, only because DSL isn't available in our area yet, and I love the high speed access when it works. I'm disgusted with this news, mostly because they provide such HORRIBLE customer service to me and don't deliver on their promises.

    I'm connected through a dialup account with my old ISP at the moment because the cable modem service in our area is down. It's been down since September 28. Their customer service line tells me they're "Working on it." but can't provide any sort of time frame.

    For the first three months we had the @Home service every 2 hours we'd recieve a DOS ping attack, lasting over 30 minutes each time. Our logs showed our computers being pinged up to 3000 times/second. You know where it was coming from? AT&T's "security" server.

    We logged over 500 calls to AT&T. I've got a spreadsheet with the names of every person I talked to. We went to the highest levels they would give us access to. We sent e-mails, we attached logs, we did everything they asked us to. They refused to fix the problem for 3 fucking months.

    And now they expect to harass online retailers that I want to shop with, just because I use AT&T as an ISP. I don't think so. If they do that I'll bother ever DSL company on the east coast to bring service to my town so I can use surf in peace.

    I hate AT&T. The second there's an option for another high speed service provider here, I'm jumping on board. I'd pay three or four times a month what I'm paying AT&T just for some sort of service. I've never had a worse experience with any company.
    --

  • Pattent this (Score:3)

    by linuxbert ( 78156 ) on Monday October 09, 2000 @07:01PM (#719374) Homepage Journal
    Lets pattent this busness model before at&t does, and sue em if they try to use it..

    who says the grannting of patents for dumb ideas cant be used to our advantage

  • *Sigh* The New World Economy (Score:5)

    by jayhawk88 ( 160512 ) <jayhawk88@gmail.com> on Monday October 09, 2000 @07:03PM (#719377)
    It seems that all these Big Companies (ATT, Microsoft, Amazon, etc) have a new business philosophy:

    1. Make dozens of wild and impractical user policies, patents, copyrights, and pricing schemes.
    2. Sit back, and see which ones hit the fan the hardest.
    3. Profusely apologize for the ones the general public complains about the most, restate your commitment to fair pricing/competition/whatever, and basically grovel and kiss ass until all is forgiven.
    4. Make money hand-over-fist on the one's that get through.

    Every time I see a Slashdot story about some company trying to get over with something ridiculous, I can't help but wonder how many others ridiculous things are out there slipping in under the radar.

  • Re:Start thinking railroads (Score:4)

    by Kwikymart ( 90332 ) on Monday October 09, 2000 @07:04PM (#719378)
    You sure seem to be the optimist. Well, I doubt this plan will work. Here are some problems I see with it:

    1)Online transactions are done in SSL. There is no way they will even know that you made a purchase let alone try to bill you for it.

    2)Something of this magnitude would probably cost more than what they would earn. Keeping up with bandwidth requirements is bad enough.

    3)If they want to implement this, they will have have an agreement with online retailers. This is NOT going to happen.

    4)If this does happen (it will not), retailers that dont join up with AT&T will get blocked out from their service. AT&T will get sued and even a possible anti-trust thing will get going.

    Does anyone know of any possible way that this plan could work?
  • I think that reuters screwed the story up. I bet this is AT&T saying that they will offer placement and full hosting

    I think you must be right. It's virtually impossible to tax transactions that don't originate somehow on AT&T's own servers. How exactly is AT&T going to figure out that those encrypted packets coming from my machine and going to some IP in Washington make up my $100 order from, say, amazon.com? And if amazon and AT&T don't have any agreement or contract, how exactly is AT&T going to bill them....? You can't send a bill to an IP address, can you? (What port would that be?)

    This story just doesn't make sense...

  • We don't have long distance at all because of those fees...however, some sort of "you have no long distance so we'll charge you a fee" fee still pops up, but it's less than any long distance company's fee - I guess it's like the "I have no car insurance" insurance.
    For when we do need to make long distance calls, we do it for free using dialpad.com [dialpad.com]. So you fill out a questionaire, big whoop. THEY KNOW WHO YOU ARE ANYWAY. ;-)

    The Divine Creatrix in a Mortal Shell that stays Crunchy in Milk

  • Putting Ebiz Out of Biz (Score:3)

    by edibleplastic ( 98111 ) on Tuesday October 10, 2000 @03:51AM (#719383)
    I think the most important thing about this article is not the actual charging and whether or not they can do it. They can probably find a way to do it, blah blah blah.

    The most significant part of the article was this:

    The fees, however, may alienate some Web merchants who already struggle to break a profit on their online sales, analysts said.

    Given the expense of attracting customers, many major Web retailers lose money every time they sell anything, a study by consultant McKinsey & Co. and brokerage Salomon Smith Barney said.

    This will be the real kicker to the deal. 99% of internet-based companies do NOT make a profit. Amazon, probably the foremost of all e-tailers is constantly in the red. You cannot charge these companies because they do not have enough capital on their own. And this will have a very simple solution. When Amazon who is not making a profit gets the letter from AT&T saying that they need to pay on every transaction, they will move to UUNet because they simply will not be able to afford to stay with AT&T. This plan is doomed for that reason.

  • You bet! I'll be more than happy to use my cable modem to build up a shopping list, then use a free dialup to make the actual purchase. And I'll be sure to send a taunting email to AT&T every time I do it.

    Oops, but when downloaded your modem software and clicked OK, you agreed that all shopping carts made while on the AT&T network will be purchased exclusively through the AT&T network. Now you're going to jail for contributory circumvention of shrink wrap licenses!
  • Very good points. And all the merchants have to do is switch to other services. This, if true, will probably lead to a loss of usage for AT&T because so many merchants will find any other service that doesn't have this asinine plan in effect.

    A couple other things to consider as to why this would be a bad idea (from the AT&T POV).

    1) What to do about spoofed orders? It is exceptionally easy for anyone who knows how to spoof an order on a merchant's site.

    2) Credit card fraud. The customer really didn't order it. The merchant is being defrauded because most credit card companies refund fraudulent orders.

    3) Lawsuits. The sales information is supposed to be protected, AFAIK, as AT&T is not the merchant and has no right to look at how much you spent at a particular merchant's site. How long before they get sued by an upset customer for being aware of how much they spent at some sex-toy site (as an example). It's one thing to have the merchant know how much you spent... it's kinda necessary. But it's another for a third-party organization who is not involved in the original transaction to be aware of it. (Note: IANAL, so take all of this with a grain of salt. For all I know, anyone can look at your credit card statement sans the card number...)

    All in all, this is sounding like a really bad idea. Maybe we can get Clinton and Lazio to debate against it... :P

    Kierthos
  • Sure they do -- someone's paying for that 800 number. The business you call pays for it. A lot. And the interexchange (i.e. backbone) carrier that takes the call gets a chunk of that money from the carrier who provides that 800 number to the business -- though that's a cut of the phone call, not a direct cut from the order.

    But, bear in mind that the Internet business is also already paying hosting-related fees (off-site DNS hosting, bandwidth usage/pipe, web hosting if they aren't doing themselves, if they are doing it themselves, there is the equipment and maintenance, etc.), although for most businesses this isn't as big of an expense as it sounds.

  • Do your good deed for the day, kill some greedy corporate executives! Kill them before they create another opportunity to rape your wallet and your self respect.

    While you're at it take a trip to your local college or university and snuff any business students you find wearing a tie, or especially a damned suit. Anyone between 18 and 25 who would want to wear either is neo-yuppie scum and probably a future greedy executive. Either way they should be removed from the gene pool before they can piss in it. Kill them twice if you find them reading the Wall Street Journal or talking on a cell phone. If you see them in an SUV, kill them three times and burn their damned pseudo-jeep! SUV's are nothing more than 21's century land yachts! I'd call them mountain yachts except they're all based on car frames and would never make it up a respectable hill, let alone a mountain.

    Its stories like this that make me want to set aside my ethics and become a cracker. Make the execs at AT&T and TW/AOL wish they'd never even heard of the internet. I'd love to get medieval on some corporate ass! But I won't because I'm a hacker, not a cracker. I do have money to spend however and it won't be going into their pockets. I'm not a pirate just like I'm not a cracker, but I'll pirate songs and movies from TW!

    Seriously though, the best way to put a stop to something like this is to cancel your AT&T worldnet or AOL accounts if you're using their service. When you do, be sure to tell them why. Also don't buy any music or movies released by one of TW's subcorporations. This is called holding the corporation accountable to its customers as well as its stockholders.

    When a corporate entity behaves unethically or ruthlessly, the best way to put them back in their place is to refuse to do business with them. The only problem is, most people don't care unless they are the one who is being directly hurt by the company. The plight of others gets little more than a passing glance from most people. Our apathy is endemic. We are the only ones who can make corporations behave themselves. Laws can't do it. Loss of revenue certainly can and will, but it means that each person must listen to and act upon their conscience, which is something that few people do in this day when making the convenient choice is preferred over making the right one.

    Lee Reynolds
  • The problem is that their network is supposed to be their number one asset, but it is actually their number one liability. Either the rules need to be changed so that someone can make a profit off of this kind of operation, or the government needs to turn it into a public utility.

    Setting asside the disturbance of my network sensibilities... I strongly disagree.

    Qwest and Sprint have spent tons of money setting up networking pipes, and both make plenty-o-money off it. The problem with AT&T is that their business model, for the last half century, was entirely based on overcharging consumers for long distance service. Now that they've gradually lost their edge on reliability, service and customer loyalty, they have to compete on price alone... just like every other "M" "C" and "I"

  • Comment removed (Score:3)

    by account_deleted ( 4530225 ) on Monday October 09, 2000 @07:06PM (#719402)
    Comment removed based on user account deletion
  • mod the parent up. Something is fishy about this idea. It seems that anyone who has taken Internet 101 would see this as an impossible thing to do without the consent of the merchant. If a merchant refuses (and many if not most will), @home can't shut these merchants off without pissing off way too many customers. C'mon, even AOL allows users to use the web.

  • AT&T out to punk themselves (Score:4)

    by MattW ( 97290 ) <matt@ender.com> on Monday October 09, 2000 @07:08PM (#719404) Homepage
    Here's what your invoice on a web buy would look like:


    Subtotal: $100
    Tax: $8.25
    AT&T Surcharge: $2 (Click here to learn why AT&T charges YOU extra and what you can do about it)

    Total: $110.25


    In other words, merchants will pass it on, not subtly but blatantly, and their customers will rebel instantly. Welcome to the information age.
  • Your site no longer pays for bandwidth, just a fraction of sales, you could save significantly. uh...did you read the articles? They are talking about charging for delivering customers. This will cost you just for having a customer browse your site. CNN
    ...AT&T would also collect a fee from retailers each time a customer accesses their site through its network.
    Yahoo
    Under the possible plan, AT&T, the No. 1 U.S. telephone and cable-television company, would charge for each customer that accesses an Internet retail site using AT&T's high-speed communications network. It would receive an additional commission when customers buy something...
    This will be the birth of corporate taxation of all of us. Hopefully some lawyer will be able to prove that this is taxation without representation or some other loophole but I just can't see this as being a good thing in any way. The home based online businesses will be the first to die off if this happens followed shortly thereafter by all of the struggling .com's and then probably the big ones. Why would you even want a retail website if you have to pay fees for people to browse. It is hard enough to market a site effectively and successfully without this type of hit to your marketing capitol.

  • I've already paid for the privilege! (Score:3)

    by dbarclay10 ( 70443 ) on Monday October 09, 2000 @07:09PM (#719407)
    I don't understand. If I pay AT&T for my internet connection, am I not paying for the hardware, whatever software and service they provide, and the ability to use the service as I see fit? Sure, there are some limitations. I can't send out hundreds of gigs worth of bandwidth, that's abusing the system. But I pay for my 'net connection so I can go shopping. Now I've got to pay again? I don't understand, I really don't.

    If AT&T can't afford to offer low flat-rates for high-speed internet connections, then they have to raise the price. If nobody buys their service because of the higher price, then a company which is more streamlined(read: a company that doesn't have a finger in every pie) will win out. That's the free market. At least, that's how it's supposed to work.

    Dave
    'Round the firewall,
    Out the modem,
    Through the router,
    Down the wire,
  • What dim bulb moderated my post as off topic?

    It takes a prize moron to think that post was off topic, but if you don't cheer with the rest of the rabble in this forum it's to be expected.
  • Sounds like AT&T is forgetting who needs who.
    Without those sites all over the place, joe average has no reason to use AT&T.

  • The sooner the ground-connection carriers like AT&T and Time/Warner/AOL/CNN/Netscape go insane with hubris based on their terrestrial dominance, the sooner wireless will take over -- and the sooner wireless takes over, the sooner the infosphere goes into orbit. [geocities.com]

  • Is this even LEGAL? (Score:3)

    by tenor ( 29482 ) on Monday October 09, 2000 @07:10PM (#719427)
    Using the phone as an analogy, is it legal for AT&T to charge merchants for customers delivered to them simply by using their phone lines? I simply can't imagine how this could fly. If it does work, many online retailers will close due to non-existent profits. As the article points out, online retailers are losing money on sales in hopes of creating a customer base. Amazon has been following this policy for years, and has yet to turn a profit. If Amazon has to pay AT&T a cut, and the States start passing Internet Tax laws, say good-bye to the e-commerce industry.

    It simply kills me that AT&T has to resort to this type of behavior to turn a profit. You can almost see the board room at AT&T corporate:

    CEO: We're losing our shirts in the long distance market! What can we do to create a new revenue engine?

    SUIT: Well, making a real product could take time and money, and that would hurt our share price. Why don't we just charge people money for the hell of it? Let the lawyers work out the details.

    CEO: What would you suggest? We can't just start charging people's credit cards. I don't think that's legal.

    SUIT #2: Well, let's cash in on this e-thing. We'll charge merchants, since they have more money than customers. Besides, most companies just roll over when you sick a few lawyers on them. Take Rambus and 1-click shopping for example.

    CEO: Beautiful. Why don't we just charge retailers for providing customer "leads". After all, we own most of the networks. That could be worth billions! We create a massing team of lawyers to handle the strongarming and politician-buying, the lawyers take half, and we still get billions. And we don't even have to produce anything! We just sit on our butts and let the pot 'o gold roll in! Excellent. Gentlemen, I think we all deserve a big bonus for such innovation.

    SUITS: .

    Corporate America makes me puke.

  • Re:well... (Score:4)

    by moonsammy ( 65351 ) on Monday October 09, 2000 @07:14PM (#719432)
    A bad comparison. To say that
    800 number charge:phone ordering::infrastructure usage charge:online ordering
    isn't right. The money paid by the online merchant for their internet connection (if they are of any significant size this is NOT cheap) is more the equivalent to an 800 number charge.
    Now, imagine company X had an 800 number through AT&T (I have no idea how 800 numbers work, but just suppose). You as a consumer call them from your home, which is serviced locally by US West. Imagine US West trying to charge you and the company you order from because you used their phone lines to call the AT&T 800 number. This would obviously be a load of crap.

    -Bah. sigs. who needs em?
  • Gi Joe doll for the son at Brick and Mortar Toys R us$15.00

    Same doll online : $8.00
    Shipping : $10.50
    State tax for your and foreign state: $2.00
    6 emails back and forth to online company: 30
    AT&T's greedy addon

    Priceless

    (This is if everyone has their way, money grubbing politicians and the like.)

  • Maybe not so evil (Score:3)

    by ackthpt ( 218170 ) on Monday October 09, 2000 @07:17PM (#719439) Homepage Journal
    That's a whole new level of psychogreed.


    Hmm. Having read the CNN piece, I have to play a little devil's advocate here. AT&T has pretty well been killed in their once profitable Long Distance service, with rates as low as 5 cents per minute. Considering the infrastructure this ancient behemoth has in place, it's not suprising they are grasping at straws to turn a buck somehow.

    The concept initially sounds stupid and difficult to manage, consider:

    Counting hits over your broadband network to a merchant site

    Determining a purchase was made

    Handling refunds for returns

    Running a meter on a proposition like this means the merchant has to buy into it, by cooperating with AT&T to notify them of any of the above taking place. Perhaps not such a big deal for an online merchant who does a highvolume of high margin goods, but how many of these are there? The bookkeeping would get pretty hairy were they logging every $5.00 sale at Amazon, not that Amazon can spare a cent, it might be what drives them under.

    This is a risky gambit, obviously in desperation, for AT&T. Seems like they should have held onto Lucent.


    --
    Chief Frog Inspector

  • Will it matter if you change your ISP if the merchants are connected only through AT&T?

    Maybe, it depends on the agreement between AT&T and the merchants. The "AT&T high speed network" is mentioned -- as if it's merchants who are connected to AT&T's circuits who will pay. As if the offer is "AT&T offers these customers at a faster speed than the rest of the Internet can reach you, and you'll pay AT&T for the customers who might like you because you're faster". Of course AT&T will also be trying to charge the merchants more for the high speed service...

  • OK, so how are they going to charge this out exactly? From the CNN article [cnn.com]: "AT&T Corp. is considering a plan to charge Internet retailers a commission each time a customer buys something through the telecom's broadband network..." So is this only for those Web sites that use AT&T's internet services or for customers who visit the sites via AT&T's services? If it is the former, how can they determine the total sales for the site (unless it is a publically traded company, they can be tight-lipped about their income sources, no?). If it's the latter, who will monitor what customer's are coming from where and what they will do?

    Furthermore, the CNN article goes on to read: "AT&T would also collect a fee from retailers each time a customer accesses their site through its network." What!?!? Think about this for a moment, I see a new opportunity for poor college kids. Rather than do something like AllAdvantage or any of those other pay to surf, do a pay to not surf. Say to these companies who would get hit by a charge from AT&T on a per visit basis, "I won't visit your site for 10 cents a day, otherwise I will visit your site several times, racking up charges for you."

    In any case, I can't see this working, everyone will switch ISPs, AT&T stockholders will complain, etc.

    <brief_rant>
    See, folks, capitalism works just fine, we don't need to gov't stepping in and makig mandate after mandate... If businesses are doing something funny, let the consumers make them change their plans by voting with their dollars.
    </brief_rant>

  • Yeah, but then you, and a couple hundred million other web users and merchants, hit AT&T with a class action suit. You sue the crap out of them for restraint of trade and everything else. If AT&T were to try something like that, they'd be history. The gov't would have no choice but to carve them up, yet again. I can't imagine anyone dreaming that they could get away with a plan such as you describe. (Oh, yeah, I forgot about Micros~1.)

    No, I read the article and I came away thinking, they must be talking about charging those fees for merchants connected via the AT&T backbone and not for customers using the AT&T backbone. The article is ambiguous on that point.

    If AT&T comes around asking me for a cut of stuff bought on my web site by @Home subscribers, I'll tell 'em to stuff it, block @Home subscribers, then sue the $ out of them. By the time it's all done, I'll own their a$$ets!

    No, I don't see how they can legally charge anyone who isn't already their customer and who also agreed to the charges up front.
  • Fuel Tax
    Toll roads

    They don't count: They are independent of what your purpose with driving is, just for how long and where. Fuel tax can be compared to the "normal" (and AFAIK uncontested) ISP connection charges. Toll roads are perhaps more akin to a particular site's membership cost or whatever.

  • I would highly recommend trying another route, namely the government.

    Here in Washington State we have the Washington Utilities and Transportation Commission [wa.gov], which has proved very helpful in my dealings with USWest. My roommates and I were some of the first to sign up for DSL service in June of '98 and we didn't get service until around November, a typical USWest installation horror story. Through the whole ordeal, my roommate was a savvy enough consumer to keep meticulous records of all of our trials and tribulations with USWest and then get the state utilities commission on USWest's case. We ended up getting a few months free, no installation costs, no long term commitments, and a couple of other things out of the deal. Not full compensation, but it was nice. Nothing we did had a greater impact on our dealings with USWest than calling the State Utilities Commission.

    Since most of the telecommunications monopolies have yet to really break up, there are still strict rules imposed by the government regarding acceptable levels of service. I'm sure most states have a similar regulation body and with your well-documented evidence, it shouldn't be too hard to receive some level of redress through them. Plus, I think the utility marks you off in their customer database as someone not to piss off in the future. : )

    HTH,
    n8_f
  • Also from McGee in the CNN article:

    Under the possible plan, AT&T, the No. 1 U.S. telephone and cable-television company, would charge for each customer that accesses an Internet retail site using AT&T's high-speed communications network. It would receive an additional commission when customers buy something, said Gartner Group analyst Ken McGee.

    ATT refused comment, I won't.

    This sucks jagged rocks, as does the rest of their cable modem direction. Changing from static IP, BZZZZT! Banning virtual IP addresses in your own home, BZZZZT! EULA that continues to outlaw any kind of serving, but having unreliable (MS of course) never up mail and DNS, BZZZZT! Just about requiring Windows and thinking that they have the right to poke around your system, BBBBZZZZZZZZZZZZZTTTTTTT! Overall a system that provides zero privacy, discourages all but the worst kind of file sharing, and forbids real publishing.

    Cable companies need some real competition in the form of wires owned by other companies. Having everything owned by ATT unregulated does not seem like the logical result of telco deregulation.

  • AT&T's fairly insignificant as a backbone provider. I'd be worried if it was MCI/Worldcom pulling this shit.
  • Are'nt municiple cable and telco monopolies localy decided? How is it that everytown has decided to screw it's citezens with a single freaking cable provider? Is there something I'm missing here? Who owns that public access that brings me telphone, power, and cable? Where is the prommised competition?

    How has all of this come to pass under a Democrat with a line item veto? Oh yeah, he's the same dude who signed the DMCPA, and pushed it too!

    Sellouts top to bottom?

  • Plus ça change, plus c'est la mem chose... (Score:5)

    by Soko ( 17987 ) on Monday October 09, 2000 @07:35PM (#719466) Homepage
    IANAA, (I Am Not An American) but hail from thier neigbour to the North. Since much of what goes on below the 49th eventually happens up here, I'll comment anyway.

    Isn't it amazing. Here we are, 224 years after the American Revolution, and we're back to square one. If this follows through, the Citizens of the Good Ol' US of A will be paying sales tax to a coproration. Heh. Something like that hasn't happened since, ohhhhh... the British Crown decided to tax tea. [homestead.com] Read the link, kids - that was to save a faltering coporation, namely the East India Company, too.

    So, we have taxes on audio capable blanks [neil.eton.ca] to make sure the RIAA and it's kin get thier fair share, absurd patents [slashdot.org] and copyrights [wirednews.com] whose sole purpose is to guarantee profits for already successful companies, and now this. Makes you sick, especially when this [algore.com] and this [georgewbush.com] stare you in the face each night on the news

    Welcome to the Free World, fellow serfs, look what the American Free Market eventually brings you - The Copristocracy. It works just like an Aristocracy, but instead of being appointed by a King, the people in it founded a successful company, are paying off our "elected" officials to pass laws so they keep thier fabulous wealth, so they can pass it on to thier progeny - just like a Duke, Prince or Barron. So much for the Revolution, eh?

  • The problem with AT&T's logic is the assumption that online business models would support this. Take Amazon, for example. Margins are absolutely cut to the bone. Reduced pricing is one of the things that make online retailing attractive. If you add cost on top of the current prices for purchases, let alone *accesses* then that cost is passed through to the consumer. As a result, by some factor, online purchasing is not as attractive. Not a good strategy for something still in its infancy.

    The two questions that lurk in my mind are:

    1. AT&T is planning on charging for access and sales on the basis that they are crossing their network. Hasn't that access already been paid and accounted for by either: a.) consumer paid fees to ISP's or b.) merchant fees for their bandwidth? It seems like all of the cost AT&T could already incur is paid for.

    2. Doesn't this set the stage for a Miscrosoft of the internet? For example, there are 2 services, X & Y. AT&T invests in X, but not Y. AT&T then gives substantial discounts (perhaps even waiving) the merchant fees for network access to X, thereby making it more competitive. This part extends beyond books and DVD's, in as much as AT&T could charge to access things such as paid tech support or downloads of updated products. What about live internet radio and other broadcasts? They have revenue streams from ads. AT&T could decide to charge for access to those items.

    The whole concept isn't workable. It is like an excise tax that is paid to a corporation. It also flies in the face of free interchange of ideas and information.

    Although it is on the fringes of freedom, I hope the EFF takes a look at the possibilities here.

    Marc
  • What is missing is this: ability.

    Quite frankly, the way this article is written, it sounds like AT&T wants to charge all on-line merchants for each sale made to AT&T broadband customers. This cannot be the case.

    First point: I, as an on-line retailer do not use any of AT&T's services. As long as I do not push anything onto their network, I have no accountability to them. If their customer wants to pull something from my servers onto AT&T's network, the bill belongs to and stays with their customer.

    Second point: AT&T, while it can monitor traffic to individual sites, has no means of determining just how much I have sold to their customer. Packet-wise (especially SSL-based communication), all transactions look the same and AT&T has no and should have no means of peeking into those transactions.

    Third point: The internet exists where AT&T doesn't. If I want to run an e-commerce site from HavenCo's Sealand fortress, there exists no juristiction under which AT&T can pursue any claims of unfair bandwidth usage.

    With this in mind, let's re-examine the article. It sounds like AT&T is planning on setting up a basic, ad-supported service, whereby customers can use the broadband in exchange for viewing ads placed by sponsors. In this model, AT&T takes a percentage of the revenue generated by this placement. Thus we have three consenting parties in the transaction (you-consumer, me-merchant, AT&T).

  • Stuff (Score:3)

    by Ollinghhajuilo ( 135078 ) on Monday October 09, 2000 @07:42PM (#719473)
    McGee told CNNfn.com. "I think when you consider that we bought $6 trillion worth of stuff last year, I think it is an easy and clear path..."

    First of all, i wonder what their quarterly reports look like.

    14 Desk Thingies : $11,304,110
    04 Original Cans of Spam: $145
    87 Fooblargs : $2,492
    01 Stuff : $6,000,000,000,000

    Or maybe they are just spending a lot on Stuff [hightimes.com] on trips to Amsterdam.

    In any case, wait one second while I remove The Shaft That is AT&T out of my backside.

  • To be a middleman. (Score:5)

    by Convergence ( 64135 ) on Monday October 09, 2000 @07:43PM (#719475) Homepage Journal
    Bluntly, these guys are in a market who's revenue isn't growing. There's too much competetion and too many price wars for the revenue from network services to make double-digit percentage growth targets.

    The problem isn't that AT&T isn't growing, it's that it isn't growing fast enough. AT&T was used to it's de-facto monopoly for many years. Things were stable.. Then the long-distance wars started heating up. It started to lose profitability.

    Then came the internet. Not only has it greatly increased competetion, but it will fundamentally destroy AT&T's fundamental revenue maker even more, long distance voice calls, but its setting up an expectation of double-digit profit and revenue growth. AT&T can't do that. No way.

    So, AT&T is between a rock and a hard place. They're stuck selling a commodity whose price is decreasing exponentially, they have a circuit-switched network instead of a packet-switched.. And they need high growth targets.

    In order to remain viable and prominent, they have to find some other big money-maker.And siphoning a share of every commerce transaction is a good technique.

    This is the other big fight going on. Everyone is fighting to become the 'middleman' that people go through. The middleman role will give them a free cut of every transaction, and insane profit margins.

    The whole AOL versus MSN consent decree in 95 was the fight to be the consumer network provider, and thus THE middleman. Fortunately the public and open internet won the first battle. But the fight still goes on. AT&T, Microsoft, AOL, EBay, Priceline.

    In the internet, the way people will win big is to become the middleman, the de-facto monopoly that everyone goes through.. That way you get a cut of every transaction.

    This is AT&T trying to join that club.

  • Highway robbery (Score:3)

    by ttyRazor ( 20815 ) on Monday October 09, 2000 @06:44PM (#719480)
    This is disgusting. AT&T is not "delivering customers", I can go buy something on my own volition, thank you very much, and I can come from any ISP I please. AT&T did absolutely nothing special to get me there, and neither I nor the person I'm buying from should have to be penalized for that.
  • Not the same as some sites blocking Amex.

    A business accepting credit cards, any at all, is a process of inclusion: We will accept MC, Visa and Diners Club

    Rather than exclusion: We will accept all credit cards except Amex

    This would be quite difficult, and probably expensive, to block upline packets, one more thing for your firewall, if you have one (or another value added service from your co-location vendor) Not likely to be a popular option.

    And, hey, how about them day traders, eh? Take a cut of commisions and stock gains? That would really be desperate.

    The counter to all this is AT&T's competition not charging, or charging less, which is what sunk the Long Distance boat. Ain't a competition a grand thing?


    --
    Chief Frog Inspector
  • Well, I really can't argue with what you have said about corporate rip offs. It's true and I'm glad you say so. In theory all of this could be changed tomorow by a vote. Keep screaming, but don't be so smug.

    The only reason you are not part of the good old USA is because you chose to fight for your recent royal English conquerers instead of your freedom. To this day, your honor holds you a slave to the crown. It's on your currency and in your laws. Say what you may about the ability of the crown to enforce those laws, it all amounts to the hollow declarations of a slave rather than a law abiding citzen or subject. A failed revolution is better than none.

    You are just as much an American anyone else on this wide continent. Keep fighting for your interests and the truth.

    Good bye, fair Karma!!!!!!!

  • I don't think that's what it says... (Score:5)

    by voidptr ( 609 ) on Monday October 09, 2000 @06:46PM (#719487) Homepage Journal
    Reading the article, I got the impression they were talking about changing from flat-rate hosting to commissions on retailers that connect through AT&T, not charging retailers a commission on sales by an AT&T subscriber (which would be unenforceable).

    IOW, if Amazon.com has a link direct to AT&T's backbone, instead of paying a flat fee for the line, they'd pay based on traffic and sales through that line. They're not going to charge Amazon just because you bought a book and you're an @home subscriber.

    It still sounds like a dumb idea though. I imagine this would require retailers to check which pipe an order came through, and AT&T to audit that information.

  • An article [techtv.com] on TechTV.com [techtv.com] indicates that they are demanding that ISPs who provision their customers with Time-Warner broadband surrender 75% of tgheir subscriber fees, 25% of all other revenue, and editorial control of their home pages and exclusive rights to a prominant area 'above the fold' on those pages to Time-Warner!

    At least the Devil lets you have exclusive use of your soul until you die!

  • The cypherpunks sites always redirect to an ssl server. Gossip, bomb recipies, orders -- encrypt it all. Consider the cost ratio for processing power vs. bandwidth. Encrypting your traffic isn't going to make a dent in the costs of serving.

  • Check them fuzzy numbers, Dubya (Score:3)

    by ackthpt ( 218170 ) on Tuesday October 10, 2000 @06:18AM (#719499) Homepage Journal
    Uhm. According to these figures at the AT&T Investor relations site, AT&T had assets as of June of $204,356 million and liabilities of $125,215 million. This means(if I am reading this right), that they made a profit of around $75 billion dollars

    Scroll down that PDF a little and you get to Owners Equity, which is is not profit. Profit is not a difference between Assets & Liabilities (unless you are Intel selling stock like they did earlier this year and throwing the capital gains in with revenue to manipulate your stock price, but I digress), Profit = Revenue - Expenses.

    I direct your attention to AT&T's income statement [att.com], ended June 30, 2000. For the 3 months ended June, they had $16,221 billion in Revenue, $12.954 billion in expenses, for a gross income of $3.267 billion. After other expenses and taxes they net a measley $1.767 billion. Even the last 6 months is only $3.508 billion. Not exactly a promising investment, I'm better off putting my paycheck in a 5% savings account.

    Now go invest some of your money in taking an accounting class so you can understand the difference.


    --
    Chief Frog Inspector

  • NOT (Score:2)

    by Danse ( 1026 )

    800 numbers are cheap. My mom had one for her business. You basically pay for your customer's long-distance call at a pretty reasonable rate (basically about the same as you would pay for long distance service per minute). This is in no way comparable to what AT&T is planning. What would be more comparable is if the merchants would pay some fraction of your broadband bill when you place an order with them. But that's not what's going on here.

  • This makes very little sense-by doing this, AT&T is just alienating their customers. Who's going to say "Hey, I want to pay extra for stuff I order!" It makes me wonder if they're trying to lose money for a tax writeoff of some sort-reminds me of Catch-22, where Colonel Cathcart's job in America is to run businesses into the ground for writeoffs. AT&T is probably doing the same thing-they're making too much money and need to lose some :P

    Colin Winters
  • NEW YORK (AP): AT&T floated a trial balloon today when various "inside sources" announced to trade magazines that it is considering a charge for thinking about phoning someone.

    The scheme would involve retrofitting all 250 million Americans with thought-monitoring microchips that would detect whenever someone thought about using a telephone.

  • Actually 1-800 numbers are relatively cheap. The business you call pays not more that 10 cents/minute or less.

    Also when you call a 1-800 number the business pays for usage, not a commission on each sale. Businesses are already paying a lot for broadband intenet access for their servers. Now ATT wants to charge them a commission as well.

    If ATT is sick of its customers, this is perhaps the best way to make them flee.

  • The first born child, of course.

    The corollary is that sending email to your doctor will cost you an arm and a leg.
  • You've inadvertently stumbled upon one of the major philosophical differences between a circuit-switched network and a packet-switched one.

    In the case of a catalog order placed through an 800 number, Ma Bell is being paid to complete a physical circuit for a given amount of time, not to facilitate any particular transaction.

    This analogy can't be used to justify AT&T's idea of charging e-commerce vendors for hits to their web sites. Those vendors are already paying for their bandwidth! Think of an Internet connection as an 800 line that's off the hook 24/7. A fat 'Net pipe already costs many thousands of dollars a month to maintain... just as those toll-free lines do. It is not reasonable for a carrier to impose content-based surcharges on packet-switched networks. They add no intrinsic value whatsoever to e-commerce transactions, and they have no reason to know or care what's in our packets, as long as the pipe is paid for.

    A more appropriate analogy would be AT&T charging more for 800 calls that actually result in a sale, as distinguished from calls placed to inquire about a product or speak with tech support. I don't think that would fly in the Real World of direct-sales merchandising, and neither will this harebrained scheme.

  • My experience with AT&T... (Score:4)

    by flieghund ( 31725 ) on Monday October 09, 2000 @07:50PM (#719519) Homepage

    I signed up with MediaOne (Los Angeles) just about one month before the AT&T merger deal was announced. If I had known that was in the works, I would have passed.

    (Background: I used to be a (fairly) happy AT&T long-distance phone customer. Then one month I noticed this "minimum usage fee" on my phone bill: suddenly, my long-distance costs went from about $0.89 (I don't call that many people out of my area, and those who do all have 800 numbers) to over $10.00! (Higher tax rates, etc.) Needless to say, I was pissed, namely becuase, I was never informed of this new charge. I bitched to the poor customer support lady until she rescinded the charge for the first three months. But that got me looking for a new long-distance provider, anyone other than AT&T. (I switched to MCI -- same lame-ass minimum monthly fee, but at least I get frequent-flier miles...))

    Anyway, I am now an "AT&T Broadband" customer (in addition to AT&T Cable, and AT&T Telephone -- with MCI Long Distance, I just love the irony). For the first month -- the "money-back guarantee" period, and approximately the time span before the Mediaone-AT&T merger finalized -- my cable modem kicked ass. D/L speeds of 1.8 Mbps were the norm, and the slowest I ever measured it was just shy of 900 Kbps. (U/L speeds suck, of course, but I rarely need to upload anything other than website images and text documents... and telnet doesn't exactly require a lot of bandwidth...) Like I said, this lasted until about the end of the trial period. Then, over the span of about one week, the service totally went to shit. Dont' get me wrong, the speed was still there -- but the cable modem would randomly reset itself anywhere from every 30 seconds to every 30 minutes. Not a huge problem when you're browsing the web, but it was wreaking havoc on my ssh and ftp connections.

    It took over a week for the tech to make it out, but I finally got it fixed. Works like a charm now (even better than originally, AFAICT). The solution? Swap out the 31337 Toshiba cable modem with this old clunky mutha (no manufacturer easily visible) that has cooling fins across the top -- and puts out enough heat that the design is justified!

    So what's the moral of the story? Right now I am happy again, but I am also waiting for the next problem with my service. (Knocking on wood as I hope that I remain one of the only people in my area that has a cable modem...) But if AT&T does try some kind of shit like this -- and trust me, if they're considering it, they probably already have it approved by upper management -- I don't think I could in good conscience continue being their customer.

    Locked into a contract? (I am in a nice 12-monther.) IANAL, but I seem to recall that a contract can be severed if one of the parties tries to impose "unconscionable" clauses on the other. Going to charge me a private tax on items I buy? I find that unconscionable.

    Three final thoughts:

    1. Breaking out of the contract means I no longer get those services. Not a Good Thing (tm).
    2. AT&T would certainly bring a lot of Congressional attention upon itself (considering the government's relative unwillingness to tax internet sales itslef), and Congressional oversight is probably the last thing a monopol... er, diversified business like AT&T wants.
    3. Would this violate the common-carrier defense that allows ISPs to be blissfully unaware of what their customers transmit? I mean, if they're monitoring my connection enough to notice when I enter an online retail website, that means they're monitoring my connection enough to notice when I visit a site that is illegal in my jurisdiction. Since they are monitoring it, doesn't that mean that they lose the common carrier protection?
  • Unfortunately, since AT&T bought up two major cable networks, they have a monopoly on cable modem access in large parts of the country, so it's not necessarily so straightforward.
    --
    Michael Sims-michael at slashdot.org

  • All traffic between @home suscribers and www.amazon.com gets routed through a ISDN switch in Pakistan instead of a NAP right into the AT&T optical backbone colocated with Amazon's servers.

    Or they'll use that Cisco product featured on /. ages ago that actually advertised it's usefulness for giving preferential QoS treatment to favored sites from your subscribers.

  • This is a stupid idea, but here's how to get around it.

    Encryption and eavesdropping is the name of the game here. First, run SSL or similar between remote and the vendor. Secondly, if they claim commerce happened, accuse them of intercepting your traffic. In my mind, a transaction between me and a retailer is private, and my ISP or their upstream providers have no business on that.

  • AT&T needs to pay the online vendors! (Score:3)

    by UncleRoger ( 9456 ) on Monday October 09, 2000 @07:56PM (#719537) Homepage

    So, of course AT&T will be paying the online vendors for providing the reason why AT&T's customers have signed up for internet access, yes?

  • Reading the article, I got the impression they were talking about changing from flat-rate hosting to commissions on retailers that connect through AT&T, not charging retailers a commission on sales by an AT&T subscriber (which would be unenforceable).
    I agree with your interpretation.

    However, it got me thinking... Charges based on the client's ISP would not be unenforceable. All AT&T would have to do is tell Amazon.com, "If you don't agree to give us a cut of all sales that come from AT&T customers, we'll block all traffic to your site." Of course customers would complain, but what are they going to do? Switch to a different ISP? Most areas only have one or two "broadband" providers, and modems are rapidly becoming unacceptable. Websites would have no choice but to comply with AT&T or AOL's demands, be they for kickbacks, exclusivity, content control, or anything else.

    That's not today's news story. But it'll happen soon enough... You'll see.
  • Assuming ATT is figuring they will know with some degree of certainty when a transaction takes place, as most websites only encrypt the actual ordering phase but not the browsing phase and plan on confronting the e-tailer about that apparent transaction:

    - Would it likely be cheaper to incur the overhead of having all browsing at a particular site done via SSL so that ATT would have no clue whether that customer visit resulted in a sale or not?

    I think discussion on how they will know about a transaction would be interesting. Also, if they are making their own web hosting customers sign contracts are they going to impose that further downstream with the CheesyHostingCo that signs up hosting customers for $19.95/month?

    This is scary. I can only hope that there will be enough resistence from the larger e-tailers by taking actions such as - sending orders to another server on a different network. possibly overseas, to circumvent this absurd (planned) policy - and make it a dismal failure.

  • *Considering* (Score:5)

    by andyf ( 15400 ) on Monday October 09, 2000 @06:52PM (#719551) Homepage
    AT&T Corp. is considering a plan to charge Internet retailers a commission each time a customer buys something through the telecom's broadband network, an industry analyst said Monday.

    Hold on! They haven't decided yet. And if enough people bitch and moan, they won't do it. So don't start thinking that they are going to do it, but it's probably a good idea to let 'em know your thoughts on the idea!

    Write to AT&T [att.com] and tell em what you think!

  • well, look at all the spineless morons who caved into RAMBUS's bogus DRAM patent claim. If these major chip manufacturers do it, mom and pop's web-shop surely will.

    Lawyers can be so intimidating. But not when they're in the crosshairs. . .
  • Post it to Stupid Patent Tricks! [slashdot.org]

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