14 September 2016

We're the Phone Company. We Don't Care; We Don't Have To.

After being called out by the press, AT&T, which cut a deal for low internet costs for the poor as a part of its merger with DirectTV, and then specifically avoided upgrading the speed of their networks to avoid offering them discounted service has relented in the face of lots of bad press:
AT&T will stop exploiting a loophole that it used to deny a discounted home Internet service to poor people in areas where it hasn't upgraded its network.

AT&T's purchase of DirecTV came with a Federal Communications Commission requirement to offer Internet service for either $5 or $10 a month to households in the federal Supplemental Nutrition Assistance Program (SNAP). But AT&T was able to avoid making this discount price available to low-income people in areas where its network doesn't support download speeds of at least 3Mbps.

A broadband advocacy group called the National Digital Inclusion Alliance (NDIA) asked AT&T to reconsider recently, and AT&T denied the request. But AT&T changed its mind after the NDIA wrote a blog post that was widely shared by news media and fueled criticism of the carrier.
Incumbent carriers can be trusted to the the right thing when they have exhausted every other possibility, I guess.

This is a classic example of a market failure which is not supposed to occur according the the free market mousketeers, but it makes perfect sense:  If you can make more money off of poor service, then you will make more money off of poor service.


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