AT&T quietly changed their home internet plans this week, dramatically boosting speeds for some of their lower-priced offerings in areas served by fiber, while boosting gigabit pricing by $10 a month in some instances.

Last week, AT&T was selling 5, 50, 100, and 1000 Mbps plans in AT&T Fiber areas. This week, customers can choose 5, 100, 300, or 1000 Mbps. Existing customers will likely have to switch plans to get the speed upgrades.

Prices shown reflect a bundled discount in the Chicago area. Prices vary in different service areas and are higher for broadband-only service. Basic 5 Mbps pricing can range from $30-60 a month depending on area and available discounts.

If you are a new AT&T customer, the company is offering a $50 Reward Card rebate (expires 7/31/2018) and a free Smart Wi-Fi Extender (new or existing customers switching to gigabit service only) (expires 6/28/2018). Here are some other important terms and conditions to be aware of:

• There is a 1 TB data cap on all plans except Gigabit Internet 1,000, which is unlimited. But you can avoid the cap for $30 extra a month (not worth it) or by maintaining a bundle of TV and internet service on a combined bill.
• All internet offers require a 12 month agreement ($180 pro-rated early termination fee applies).
• Prices reflect bundled service combining internet with at least one other AT&T product (TV/AT&T Phone/Wireless).

Last week, AT&T announced its intention to abandon an appeal of a decision of the 9th Circuit Court of Appeals granting the Federal Trade Commission the right to continue its lawsuit against AT&T for speed throttling its “unlimited data” wireless customers.

The notification came in a surprising four sentence notice filed with the court May 30:

At the May 10, 2018 case management conference in this matter, AT&T informed the Court that it expected at that time to request a 60-day extension from the Supreme Court of the deadline to file a petition for certiorari. See Audio Recording of May 10, 2018 Hr’g at 7:22. Since that hearing, AT&T has decided not to request such an extension and not to file a petition for certiorari to review the decision of the en banc Ninth Circuit, see 883 F.3d 848 (9th Cir. 2018). The deadline to file a petition for certiorari lapsed on May 29, 2018.

AT&T spokesman Mike Balmoris later told reporters: “We have decided not to seek review by the Supreme Court, to focus instead on negotiating a fair resolution of the case with the Federal Trade Commission.”

AT&T’s sudden change of heart surprised many observers, including some closely following the case at the 9th Circuit, which has held regular court supervised meetings to prepare for the widely expected Supreme Court challenge. AT&T notified the court in early May it would file its appeal as soon as May 29, and the court was preparing new discovery guidelines and deadlines between the two parties as the case proceeded.

AT&T had achieved a major victory in 2017 when a three-judge panel at the Ninth Circuit agreed with AT&T’s argument that the FTC had no jurisdiction over the company because part of its business includes traditional telephone service, something defined in law as being regulated exclusively by the FCC. At the same time, the FCC did not seem to have jurisdiction either, because wireless data throttling took place over a network not subject to common carrier service regulations.

Ninth Circuit Court of Appeals — San Francisco.

The Ninth Circuit then agreed to hear the case once again, this time “en banc” — meaning the full court would re-hear the case instead of a limited panel of three judges. In February, the court unanimously found the FTC did have regulatory jurisdiction over AT&T after all:

We conclude that the exemption in Section 5 of the FTC Act – “except . . . common carriers subject to the Acts to regulate commerce” – bars the FTC from regulating “common carriers” only to the extent that they engage in common-carriage activity. By extension, this interpretation means that the FTC may regulate common carriers’ non-common-carriage activities.

[…] This statutory interpretation also accords with common sense. The FTC is the leading federal consumer protection agency and, for many decades, has been the chief federal agency on privacy policy and enforcement. Permitting the FTC to oversee unfair and deceptive non-common-carriage practices of telecommunications companies has practical ramifications. New technologies have spawned new regulatory challenges. A phone company is no longer just a phone company. The transformation of information services and the ubiquity of digital technology mean that telecommunications operators have expanded into website operation, video distribution, news and entertainment production, interactive entertainment services and devices, home security and more. Reaffirming FTC jurisdiction over activities that fall outside of common-carrier services avoids regulatory gaps and provides consistency and predictability in regulatory enforcement.

In short, AT&T’s “get out of regulatory oversight free”-card was revoked, much to its consternation. The company promised a fast appeal to the Supreme Court. The case concerned a number of observers, not the least of which was the Federal Communications Commission, which has been so concerned about AT&T’s novel argument to escape regulation, it filed a brief supporting the FTC with the court:

If the en banc Court were to adopt AT&T’s position that the FTC Act’s common-carrier exception is “status-based” rather than “activity-based,” contrary to the reasoned analysis of the district court below, the fact that AT&T provides traditional common-carrier voice telephone service could potentially immunize the company from any FTC oversight of its noncommon-carrier offerings, even when the FCC lacks authority over those offerings—creating a potentially substantial regulatory gap where neither the FTC nor the FCC has regulatory authority.

That approach is contrary to a common-sense reading of the relevant statutes and could weaken or eliminate important consumer protections. While AT&T may prefer to offer services in a regulatory no man’s land, the law does not dance to AT&T’s whims.

While AT&T publicly expressed confidence about its appeal right up to the day it abandoned it, minutes from the Ninth Circuit trial scheduling and progress conferences reveal AT&T and the FTC were already privately talking with each other to avoid further litigation:

“Parties reported that they are conducting settlement negotiations.”

All observers agree a successful appeal by AT&T to the Supreme Court could have put telecommunications laws and regulations into chaos. Had AT&T successfully restored the three-judge panel’s decision, any telecommunications company could walk away with impunity from FCC and FTC oversight by simply starting a small telephone company serving just a handful of customers. Just one product or service subject to common carrier rules could effectively immunize a phone or cable company from regulations indefinitely, or until Congress changed the law to close that loophole.

Some observers predict AT&T’s decision not to appeal is a prelude to an imminent, favorable permanent settlement of the four-year old case. The evidence strongly suggests AT&T will likely escape any significant monetary punishment, and affected consumers may not get significant (if any) compensation for AT&T’s prior acts:

• The FCC shows no sign of following through on a 2015 press release threatening AT&T with $100 million in fines for its failure to properly disclose its speed throttling policy arbitrarily imposed on unlimited data customers who exceeded a company-defined amount of data usage. At the time the press release was issued, there were three Democrats and two Republicans serving on the Commission. Both of those Republicans opposed the fine and are now part of the Republican majority at the FCC under the Trump Administration. The FCC admitted in court papers that no further action has been taken to fine AT&T. The case was largely left in the hands of the FTC.
• During the Obama Administration, the FTC claimed it was interested in pursuing refunds for affected customers and punishing AT&T for its throttling practices. Last week, Andrew Smith, the FTC’s new director of the Consumer Protection Bureau told an audience today’s priority it to monitor providers over traffic throttling and making sure those practices are transparently disclosed to customers. “We’re planning to examine current practices in the industry,” Smith said. “We’re looking for areas in which ISPs may be engaged in unfair or deceptive practices, and we will bring enforcement action as appropriate.”

Smith

For AT&T, the decision to drop its appeal may have come down to whether it preferred to temporarily escape regulatory oversight until an enraged Congress passed new laws to put AT&T and other telecom companies back under oversight, or living with the kind of “light-to-little touch” regulatory approach favored by the Trump Administration and its regulatory agencies. Whatever deal emerges between AT&T and the Trump Administration’s FTC will likely be “win-win” for the company and the regulator, with consumers offered only token relief.

The goals likely to be achieved in any settlement:

• AT&T would clearly like to avoid a $100 million fine and other enforcement actions, so agreeing to ease throttling (something it has done already) and better disclose the practice would hardly create a problem for the company, especially if fines are dropped as a result.
• The FCC’s new “net neutrality” policy depends almost entirely on effectively abdicating oversight responsibility to the FTC, something embarrassing and hard to justify if AT&T managed to permanently bar the agency from regulating the company.
• The FTC can claim victory by telling consumers they are watching ISPs for undisclosed and unwarranted throttling, without opening up new legal challenges by outright banning of the practice, heavily fining violators, or collecting damages on behalf of customers victimized by prior bad acts.

AT&T does not see fixed wireless millimeter wave broadband in your future if you live in or around a major city.

John Stephens, AT&T’s chief financial officer, today reiterated to shareholders that building a small cell network for urban and suburban fixed wireless service does not make much sense from a business perspective.

“It’s the cost efficiency,” Stephens told an audience at Cowen and Company’s 46th Annual Technology, Media & Telecom Broker Conference. “Once you [get] the fixed wireless connection from the alley to your house, that’s great you can do that, but you have to get it from the alley into the core network.”

Stephens

Stephens noted that once AT&T realized it would require a collection of small cells to hand wireless traffic off, “building that out can be very expensive when you’re likely doing it in an urban market in a residential area that already has a lot of fiber [or] a lot of competition [from] incumbent telephone and cable companies.”

AT&T sees a likely different future for fixed wireless based on in its ongoing trials underway in Austin, Tex. — selling the service to commercial and manufacturing customers with robotic equipment and other machinery that need instant and fast wireless communications to communicate with each other and back to a central point.

Stephens believes a better idea for its 30 million U-verse fiber-near-the-home customers is to extend fiber directly to those customers’ homes. Stephens said AT&T would be financially better off scrapping the remaining copper wire running the last 500 feet from a customer’s home or business to the nearest fiber-equipped pedestal and give customers dedicated fiber to the home service instead.

“It may be very inexpensive for us compared to the [5G] alternative and gives the customer a tremendous level of service,” Stephens added.

Where millimeter wave could make sense is in exurban and rural areas where clusters of homes could potentially be reached by fixed wireless, assuming there was fiber infrastructure close enough to connect those small cells to AT&T’s network. But AT&T seems to be more interested in applying the technology in commercial and Internet of Things (IoT) applications where wireless access can be essential, and would be much easier to deploy.

Verizon, in contrast, is expanding millimeter wave fixed wireless broadband trials, with the hope of selling a wireless home internet replacement.

DirecTV’s satellite lineup, delivered over the internet.

DirecTV satellite customers with broadband connections might be able to scrap their satellite dishes and set-top equipment when AT&T launches its broadband-delivered version of DirecTV by the end of 2018.

AT&T Communications CEO John Donovan made the announcement at the MoffettNathanson Media & Communications Summit on Tuesday, telling the audience the lineup would be nearly identical to the satellite TV packages customers get today from DirecTV’s satellite dish service.

Customers who opt to dump their dish may also save money by moving their subscription to a broadband platform. Currently, AT&T sells DirecTV for $120-200 a month, depending on equipment and channel lineup. The broadband equivalent, which will not require any expensive set-top box equipment and will rely on a cloud-based DVR, will sell for $80-90 a month.

DirecTV satellite packages (new customer promotional rates — regular prices are higher)

“We won’t roll a truck,” to install a satellite dish, Donovan said. “The [equipment costs] will be cheaper. It will be a thinner, lighter version and we will have lower operating costs. We anticipate passing [on] a lot of those cost savings [to customers].”

Donovan believes a transition away from satellite will be a win-win for the company and consumers because both will face lower costs. It also gives DirecTV the chance to expand, marketing its full video lineup to customers who can’t get a satellite signal, don’t want a dish, or live in a building that restricts satellite equipment.

“It will extend our footprint,” Donovan said at the MoffettNathanson event. “It will not only have a lower price point, but it will have margins that are similar and, therefore, better returns because there will be less upfront costs.”

With today’s announcement, AT&T will have at least five different video products on offer for consumers: DirecTV satellite service, DirecTV over broadband, DirecTV Now — a slimmed down package targeting cord-cutters, U-verse TV — AT&T’s traditional cable TV package, and AT&T Watch — a forthcoming ultra-slim offering that will cost $15 a month for non-AT&T wireless customers. Existing AT&T wireless customers will get Watch free of charge, if they have an unlimited data plan.

Sen. Lee

Several key Republicans are backing a corporate-friendly measure that would hurry the Federal Trade Commission, the Department of Justice, and the Federal Communications Commission through merger reviews, likely leading to less scrutiny of multi-billion dollar merger and acquisition deals that could ultimately cost consumers billions.

Retiring Sen. Orrin Hatch (R-Utah), Mike Lee (R-Utah), Thom Tillis (R-N.C.) and Chuck Grassley (R-Iowa) are the key backers of the “Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act,” a bill that would amend the Clayton Act and Federal Trade Commission Act to align the standards and processes for the Federal Trade Commission’s (FTC) and Department of Justice’s (DOJ) review of proposed mergers and acquisitions.  The SMARTER Act claims it will eliminate bottlenecks that sometimes hold up merger reviews at the DOJ and FTC, and require agencies like the FCC to speed up merger reviews.

Sen. Hatch

Republicans claim corporations are being unfairly treated by excessive regulator scrutiny and delays of merger and acquisition transactions. Because different agencies have their own procedures about reviewing such deals, and federal agencies like the FCC are likely to put deals on hold when companies stonewall the Commission over document requests, Republicans are complaining about bureaucratic holdups. Supporters also claim that current delays associated with merger reviews “fuel politicization” of deals by politicians, consumer groups and media personalities, giving them time to organize public opposition and mount coordinated challenges.

Without a fully enforced shot clock, the FCC “creates uncertainty for transacting parties and effectively enables the FCC to evade judicial review,” bill supporters add.

The FCC already has a limit on open-ended merger reviews — its 180-day “shot clock” that requires mergers be approved or denied within six months. The FCC’s shot clock carried some built-in protection for its integrity, however, by including the power to pause the clock if companies attempted to “run out the clock” by slow-walking requested documents or stonewalling the Commission on other requests. The SMARTER Act would make it easier for companies facing a difficult review to wear down regulators by stripping away the agency’s power to put its shot clock on hold. Instead officials at the FCC would be required to make frequent trips to court to win permission from a judge to stop the clock while waiting for receipt of documents or reviewing merger objections. If the merger is ultimately turned down, the Republican bill also offers corporations the opportunity to streamline any court challenge by eliminating the step of first holding a FCC administrative law judge hearing.

Republicans have overwhelmingly favored The SMARTER Act, with Democrats almost universally opposed. In the previous Congress, House Republicans voted nearly unanimously for the bill. But the bill died after facing opposition in the then Democratic-held Senate. This term, Republicans control all branches of the federal government, giving the bill a better chance of becoming law.

Sen. Tillis

The SMARTER Act is heavily favored by the country’s top telecommunications companies, many that would directly benefit from its passage. No company would stand to benefit more than AT&T, which has seen several high-profile merger and acquisition cases fall apart before regulators. The bill strips away several layers of antitrust protection for consumers that were used to stop several multi-billion dollar telecom company mergers, and scared off others from trying.

The DOJ was instrumental in stopping AT&T’s acquisition of T-Mobile, and combined skepticism by the FCC and the DOJ forced Comcast to withdraw its proposed acquisition of Time Warner Cable. If the SMARTER Act becomes law, internal agency reviews of challenges to a merger will be eliminated. Merger opponents will have to file challenges to mergers in federal court instead. Such a law would have offered AT&T a dramatically better chance that its merger with Time Warner, Inc., would have been approved months ago without a court proceeding.

Two of the Republican FCC commissioners issued statements applauding the proposed legislation.

“Among other improvements, the bill includes two key reforms to the FCC’s merger review process that I have longed championed: setting a non-aspirational, 180-day shot clock for agency review of license transfers and addressing the abusive practice of designating an application for hearing to the Administrative Law Judge (ALJ), which effectively serves to kill a transaction,” wrote Commissioner Michael O’Rielly. “Applicants deserve a timely, complete, fact-based, and straightforward answer from the Commission – not one built on interminable delays or shady denials.”

“I applaud Senator Lee for working to ensure that good government is the law of the land,” said FCC Commissioner Brendan Carr. “With the SMARTER Act, Senator Lee would put the Federal Communications Commission on a shot clock and thus codify the agency’s commitment to open, transparent, and timely decision making.”

Although supporters of the measure claim it will eliminate disparate treatment of mergers and speed their review, critics contend the bill is a “solution in search of a problem.”

The American Antitrust Institute slammed the bill as lacking any foundation to prove its case. AAI conducted an exhaustive review of merger deals that came before the DOJ or FTC and found very few companies ever ran into opposition of their merger deals in the first place. From 2001-2014, businesses enjoyed a 97.5% chance their deals would be approved without challenge and a 96.7% chance their mergers or acquisitions would be approved without a second request.

Sen. Grassley

“The enforcement data suggest many things, but one of them is definitely not what the SMARTER Act purports to cure: an ‘unfairness’ caused by differences in standards and procedures at the FTC and DOJ,” wrote Diana Moss, president of AAI. “On the contrary, the SMARTER Act would create uncertainty and new litigation to solve a problem that, empirically, does not exist.”

Critics of the measure suspect the Republicans have a larger agenda in mind – curtailing government and regulatory oversight of public interest antitrust enforcement. AAI summarized their concerns:

First, the FTC’s use of administrative powers should be carefully safeguarded, because it has contributed critically to the effective shaping of U.S. merger policy without detracting from the speed or effectiveness of merger review.

Second, any difference in the preliminary injunction standard is more theoretical than real, and if a uniform standard is to be adopted, it should be the FTC’s standard, which allows the agency to obtain a preliminary injunction “[u]pon a proper showing that, weighing the equities and considering the Commission’s likelihood of ultimate success, such action would be in the public interest.”

Third, any change in the law may have harmful unintended consequences, including unnecessarily burdening the federal judiciary with new litigation over the meaning and value of the body of legal precedent involving merger cases brought by the FTC in federal court under the existing standard.

SMARTER Act by Senator Mike Lee on Scribd