Geoff Colvin, in a longform profile of AT&T and its CEO Randall Stephenson for Fortune:
The grand vision begins with combining all the major elements of the media and telecom businesses, which no company has ever done before. Time Warner’s film and TV studios make some of the most successful and honored entertainment anywhere. Its cable networks — including TBS, TNT, CNN, Cartoon Network, and Turner Classic Movies — are distribution powerhouses. DirecTV carries those networks and others into homes through its satellite system. Add in AT&T’s wireless and landline customers, and Stephenson boasts that AT&T has “170 million distribution points we can push this through.”
With such a combination of media assets, the theory goes, AT&T can achieve unprecedented advantages. It can differentiate its fast-commoditizing wireless network by offering customers deals on its proprietary content. It can expose its content to vast audiences through all its networks. Because it collects staggering volumes of customer data through its wired, wireless, and satellite networks, it can enable advertisers to target their messages with new precision and, in some cases, even track customers who have seen specific ads and thus gauge how the ads performed — services for which advertisers will gladly pay a big premium.
The immediate next step in the transformation, likely the biggest and most visible step, will be to introduce a video-on-demand Internet streaming service — a Netflix competitor — in this year’s fourth quarter. AT&T says the new service eventually will include original content, HBO, movies from multiple studios, and library content from HBO and Warner Bros.
Who, apart from AT&T shareholders and executives, finds this advantageous? The company’s deep vertical integration and sheer scale are a monument to ineffectual and consumer-unfriendly American antitrust laws. And that’s without getting to the wildly invasive advertising plan:
Adding strength to the whole proposition is AT&T’s unique aggregate customer data trove and its value in addressable advertising over DirecTV and AT&T’s direct-to-consumer streaming services; ads can also be directed less precisely through the former Turner networks. “Say you and your neighbor are both DirecTV customers and you’re watching the same live program at the same time,” says Brian Lesser, who oversees the vast data-crunching operation that supports this kind of advertising at AT&T. “We can now dynamically change the advertising. Maybe your neighbor’s in the market for a vacation, so they get a vacation ad. You’re in the market for a car, you get a car ad. If you’re watching on your phone, and you’re not at home, we can customize that and maybe you get an ad specific to a car retailer in that location.”
This is very creepy. It’s at least as invasive as what big tech companies like Google and Facebook do, but telecom conglomerates like AT&T aren’t getting the same negative press. They’re only allowed to do this because the Republican-led FCC, in 2017, struck down reasonable privacy restrictions that were to be enforced on telecom firms — companies like AT&T and Verizon are uniquely positioned to have what is likely the most comprehensive picture of users’ digital lives.
Nilay Patel, the Verge:
If this was a story about Mark Zuckerberg and Facebook, this scheme would cause a week-long outrage cycle. It is outrageous, especially when you consider that AT&T also routinely hands over customer information to the government, is under investigation for illegally selling customer location data to shady third parties, and is generally about as protective of your data as a hotel front desk guarding a bowl of mints.
AT&T can claim up and down that it’s asked for permission to use customer information to do this, but there is simply no possible way the average customer has ever even read their AT&T contracts, let alone puzzled out that they’re signing up to be permanently tracked and influenced by targeted media in this way. People are already convinced that Facebook is secretly listening to them through their phones; if you explicitly offered them the choice of AT&T tracking everything they watch and everywhere they go, it’s a safe bet that they would say no.
I would bet that as well; but, I also have a nagging worry that many consumers are becoming nihilistic about their privacy. People care, but I don’t think they feel like they have any control. Weak regulators are enabling this disconcerting direction.