AT&T has got your number.

AT&T wants to know what you are doing on the Internet.

If you agree to share your browsing history and view targeted contextual advertising from AT&T and its partners, the company will give you a monthly discount off the price of its new GigaPower gigabit fiber network.

Now launching in Austin, AT&T GigaPower charges $99 a month for 300Mbps standard service (speeds will be raised to 1,000Mbps in 2014 at no extra cost — equipment, installation and activation fees are extra). But customers can knock $30 off the monthly price and skip the new customer fees by enrolling in AT&T’s new “Premier” package, which runs $70 a month.

GigaOm discovered some interesting language in AT&T’s fine print about its Premier service: “[The discount] is available with your agreement to participate in AT&T Internet Preferences. AT&T may use your Web browsing information, like the search terms you enter and the Web pages you visit, to provide you relevant offers and ads tailored to your interests.”

Exactly how AT&T intends to implement its contextual advertising program remains largely a mystery. Google includes contextual ads in its Gmail service, its search engine results, and in online advertising from participants in Google’s AdWords program. AT&T lacks an advertising platform as large as Google or Microsoft’s Bing, so questions are being raised about how exactly AT&T will be able to find enough places to present online ads.

GigaOm suspects AT&T might use deep packet inspection to monitor customers’ web traffic to collect browsing information for contextual ads. Others suspect AT&T will replace certain existing third-party ads found on independent websites with its own advertising. Either is likely to bring the company scrutiny, both from Internet Privacy advocates and website owners that find their advertising replaced by ads from AT&T and its partners.

AT&T’s response to GigaOm left a number of questions unanswered:

We use various methods to collect web browsing information, and we are currently reviewing the methods we may use for the Internet Preferences program. Whichever method is used, we will not collect information from secure (https) or otherwise encrypted sites, such as online banking or when a credit card is used to buy something online on a secure site. And we won’t sell your personal information to anyone, for any reason.

[…] We won’t sell your personal information. Rather, AT&T may use your personal information to direct another advertiser’s ad to you, but that advertiser would never have access to your Personal Information. For example, after you browse hotels in Miami, you may be offered discounts for rental cars, but that rental company doesn’t know who you are.

AT&T is experimenting with consumer acceptance of discounting service in return for giving up some privacy. It says it is giving customers the choice to opt out by signing up for the more expensive “standard” service.

U-verse television service is also available to customers of both packages for an extra $50 a month. Telephone service adds another $30 a month.

AT&T has started rolling out its GigaPower service in the French Place, Mueller, Zilker, and Onion Creek neighborhoods and will select future places to expand based on interest registered by local residents on AT&T’s GigaPower website.

“We’ve already received great input from thousands of Austinites eager for the fastest speeds,” said Dahna Hull, general manager of Austin’s AT&T Services, Inc. “These votes are helping us identify where the need for speed and advanced TV services is the greatest and will help guide our future GigaPower expansion plans.”

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Options for super high-speed Internet are heating up in Austin as AT&T introduces AT&T U-verse with GigaPower this week. KXAN reports the service will initially launch with 300Mbps service in a handful of neighborhoods, but upgrade to 1,000Mbps speeds in more locations next year. (2:30)

AT&T has informed Google it will not allow the search engine company to use its utility poles to build a fiber optic network that will compete with AT&T’s own GigaPower fiber service, which launched in Austin this week.

Current rules require utilities to provide non-discriminatory access to poles for all electric and telecommunications companies. AT&T has declared Google is neither, but is willing to work with the company once it is “qualified,” said Tracy King, AT&T’s vice president for public affairs.

“By challenging the city to force an employer to share its equipment contrary to federal law and without transparency, Google appears to be demanding concessions never provided any other entity before,” said King.

The dispute now threatens to involve Austin’s city council, which fears AT&T’s position could result in thousands of new utility poles being installed next to AT&T-owned poles. City officials warn they are willing to settle the matter by changing the rules for all utility companies, using their authority as the owner of the land on which the utility poles are placed.

“We don’t want people to put up their own poles,” Rondella Hawkins, Austin’s telecommunications and regulatory affairs officer, told the Austin-American Statesman. “We want to avoid anybody putting up redundant utility poles. Could you imagine a city where all the (telecommunications) providers individually have their own utility poles? It would be a mess.”

Google said it wants to bring its fiber network to Austin in the least disruptive way possible, and AT&T’s actions may complicate the project.

Martinez

The proposed rules change threatened by the city council brought immediate opposition from both AT&T and the unions that represent AT&T workers.

“The city of Austin should not jump into what amounts to a business dispute and create winners and losers before everyone can present data on all the stakes that are involved,” wrote Becky Moeller, president of the Texas AFL-CIO.

This afternoon, with the rules change pending on the calendar, Google and AT&T apparently decided to work out the dispute before the city imposed a solution.

“After hard work, lots of meetings and tons of input – AT&T and Google agree to negotiate their issues with the city,” Austin council member Mike Martinez wrote on his Facebook page. “A postponement of [the ordinance change] is highly likely. Thank you to them and all who helped make this happen.”

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KVUE in Austin reports the pole attachment dispute between AT&T and Google threatens to involve the city council. (3:09)

AT&T this month signed up their 10 millionth customer to U-verse High Speed Internet service, surpassing Verizon FiOS as the nation’s biggest telephone company supplier of broadband, television, and telephone service. Coinciding with that success, AT&T is raising prices for U-verse, despite AT&T’s record earnings from the fiber to the neighborhood service, now accounting for $1 billion a month in revenue.

AT&T is protecting its broadband flank by convincing current DSL customers to switch to higher-speed U-verse broadband as the network upgrade reaches into more homes across AT&T’s service areas. In the last quarter U-verse picked up 655,000 new broadband customers nationwide, many upgraded from traditional DSL. Where AT&T has not invested in U-verse upgrades and cable competition exists, results are not as good. AT&T lost 26,000 DSL customers last quarter, most moving to cable broadband.

“This latest milestone shows how U-verse is helping transform AT&T into a premier IP broadband company,” said Lori Lee, senior executive vice president, AT&T Home Solutions. As of the third quarter of this year, total U-verse high-speed Internet subscribers represented about 60 percent of all wireline broadband subscribers, compared with 43 percent in the year-earlier quarter.

Verizon FiOS, in comparison, has signed up just 5.9 million customers FiOS Internet subscribers on its stalled fiber optic network. Most Verizon broadband customers with no FiOS in their future either stick with DSL service or, increasingly, switch to a cable competitor for faster speeds.

Some of AT&T’s strongest U-verse growth came from its TV package. At least 265,000 cable and satellite cord-cutters looking for a better deal switched to U-verse TV in the last three months, a gain from 198,000 at the same time last year. That’s the second-best quarterly gain ever. A total of 5.3 million AT&T customers subscribe to U-verse TV.

Much of the growth has come from AT&T’s investment in expanding U-verse to new areas. Project Velocity IP is a three-year, $14 billion plan to upgrade AT&T’s wireless and wired broadband networks. AT&T has added almost 2.5 million more homes to its broadband footprint so far this year and hopes to expand broadband availability to reach about 57 million customers by the end of 2015.

Although $14 billion is a significant investment, AT&T has spent considerably more on its shareholders. John Stephens, AT&T’s chief financial officer told Wall Street analysts AT&T has bought back 684 million shares of stock that will save the company more than $1.2 billion in future dividend payouts.  Combined with its dividend payout, AT&T has handed shareholders $18 billion so far this year and more than $40 billion since the beginning of 2012. AT&T expects to spend $20 billion on wireless and wireline network improvements in 2014.

AT&T’s speed upgrades have also not run as smoothly as AT&T claims. Efforts to increase speeds to 45Mbps in 79 markets has had mixed results with a significant number of customers complaining they cannot get qualified for the faster speeds because of infrastructure problems with AT&T’s network. The company still says it is on track to offer 75 and 100Mbps speed tiers in the future and is building a fiber to the home network in Austin to compete with Google.

Many customers who have been with AT&T for more than a year are learning better service does not come for free. AT&T has filed rate increases for its television service beginning Jan. 26, 2014 for customers not on a pricing promotion. The monthly price for the following U-verse TV service plans will increase $3, along with fee hikes for local stations and equipment, bringing AT&T at least $15 million in extra revenue each month:

• U-family to $62;
• U200 to $77;
• U200 Latino to $87;
• U300 to $92;
• U300 Latino to $102;
• U450 to $124;
• and U450 Latino to $134.
• Grandfathered plans also will increase $3: U100 to $64 or $69, depending on when first ordered; and U400 to $119.

• The monthly price of each non-DVR TV receiver will increase from $7 to $;
• Beginning on February 1, 2014, the Broadcast TV Surcharge will increase $1 to $2.99 per month to recover a portion of the amount local broadcasters charge AT&T to carry their channels.

Those customers who have a U-verse TV pricing promotion will continue to receive the promotional benefit until the applicable promotion ends or expires.  Customers are being notified of these changes via bill messaging occurring in November and December and a reminder in January and February 2014.  In addition, customers will be notified of these changes online at www.att.net/uversepricechange and att.com/uversesupport.

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AT&T is trying to get ahead of Google by advertising AT&T U-verse with GigaPower, a 1,000Mbps fiber to the home service promised in Austin sometime in the future. (0:30)

Next generation cable or a spray-on solution to a really bad quarter?

Time Warner Cable has a plan for multi-gigabit broadband speeds over a state of the art network that, for the first time, might include fiber to the home service.

TWC Max is Time Warner Cable’s code name for selected markets where customers will be given first class treatment and provided what incoming CEO Rob Marcus calls “best-in-class reliability and service.”

Marcus made it clear in a conference call to investors this morning that TWC Max will only be available in specially chosen markets, most likely those facing intense competition from Google Fiber (Austin, Kansas City), Verizon FiOS (New York, parts of Dallas, etc.) or upgraded AT&T U-verse.

TWC Max might also be offered in cities where community-owned fiber-to-the-home providers best TWC’s broadband speeds and prices. North Carolina, in particular, would be a logical choice as Time Warner Cable recently acquired DukeNet, a major commercial fiber broadband provider headquarted in Charlotte, also a major hub for Time Warner Cable’s data services. Wilson, Salisbury, Mooresville, Davidson and Cornelius are all served by publicly-owned broadband providers.

Beginning next year and over the next several years, those chosen will get major broadband speed upgrades — up to several gigabits, totally new customer equipment, and an all-digital experience.

“We will replace modems with state-of-the-art DOCSIS 3 modems and advanced wireless gateways, so we can meaningfully increase broadband speeds,” said Marcus. “And by the way, we’re not talking about tweaks here but rather quantum changes to our speed tiers. We’ll also replace standard definition and older HD set-top boxes and roll out new DVRs, better user interfaces and more advanced versions of our TWC TV apps to fundamentally improve the video experience.”

If the competition is DSL, you may have a really long wait to be considered a TWC Max city.

Marcus added that in some mixed business/residential areas, fiber to the home service is increasingly possible because of declining costs and pre-existing fiber infrastructure already serving commercial customers and cell towers.

But Marcus was quick to stress that his philosophy about upgrades is to provide them in focused markets, not share them with every city where Time Warner Cable provides service.

“The goal here is, really, to fundamentally change the customer experience in a given market, said Marcus. “So rather than spread our efforts like peanut butter throughout the footprint, I’m very anxious to deliver a complete experience.”

“That means not only going all-digital but also ensuring that we have state-of-the-art modems in every customer’s home, ensuring that they have the best video and that the overall experience is really optimal,” Marcus added.

“So we’re going to concentrate market by market rather than take individual components and run them through the entire footprint.”

So what are the chances your city will be designated a TWC Max target area?

After reviewing the transcript for this morning’s conference call,  Stop the Cap! has created this handy-dandy, simple to use guide:

• If your community has or was chosen for Google Fiber: A VIRTUAL CERTAINTY!
• If your community is served by Verizon FiOS or AT&T’s Next Generation U-verse: EXCELLENT
• If your community has a fiber to the home provider competing with Time Warner Cable: VERY GOOD
• If your community is served by copper-based DSL from the phone company with no prospect of getting U-verse or FiOS: WHEN PIGS FLY!

An enterprising reader of the Broadband Reports‘ AT&T Forum stumbled on proposed pricing for AT&T’s faster speed services for U-verse and, presumably, their planned fiber-to-the-home rollout in Austin, Tex.:

The prices are no bargain in comparison to the $70 a month Google charges Kansas City residents for 1,000/1,000Mbps service, but on the lower end, AT&T’s 45Mbps U-verse option is comparable to Time Warner Cable’s 50/5Mbps tier, which now sells for $65-75 a month on a one-year promotion:

Time Warner Cable’s latest broadband offers