Kyle St. Romain | APPS | 06.05.2012 @ 1:00 pm
(Every Tuesday, Kyle St. Romain will talk about the business and legal side of the app world. While his opinions don’t always reflect those of Rocksauce Studios, you should hear him out…the guy knows his stuff!)
Apparently I’m not the only one who likes to use the phrase “Troll Toll.” Apart from the obvious (*cough* ‘It’s Always Sunny in Philadelphia’), I’ve found another writer who recently used the phrase to discuss AT&T, net neutrality, and why those two terms shouldn’t go together. What’s unfortunate about the prevalence of this phrase is how pervasive these greedy little trolls are collecting tolls.
In his article, AT&T Claims Content Companies WANT a Troll Toll; They Also Want a Giant Boot in Face, Shingles, Poison Ivy, Karl Bode introduces us to a fresh new idea out of some poorly lit corner office at AT&T: app developers footing the bill for their customers’ network data overages incurred while using their app. As distilled from comments made by, Randal Stephenson, CEO of AT&T, at the Sanford Bernstein Strategic Decisions conference, AT&T has discovered the following three truths: (1) customers’ understanding of tiered data pricing is causing them to avoid data heavy apps, because they don’t want to pay the steep data overage charges; (2) aware of data tiers, customers chose to avoid content heavy apps, like Netflix, while on AT&T’s network in order to avoid extra fees; and (3) app developers also recognize this and are demanding a mechanism whereby they can pay the overage fees its customers incur from AT&T while using their app. You can listen to the full webcast here.
Essentially, AT&T’s plan has certain apps and services excluded from customers’ data limit. Instead of the customer paying for that data, the companies pay a fee to AT&T. Great! Lower data fees, right? Wrong. While this plan may sound okay to some, it can have seriously damaging consequences. Apart from the lunacy of a company wanting to pay more, especially for something they don’t have to, such an arrangement compromises the free market forces present in the mobile app industries.
As noted by Mr. Bode, this pay-to-play data model can artificially determine what apps become successful. Rather than the customer determining which applications they like to use and developers updating those apps based on customer needs (the old way of doing business), AT&Ts vision of this system is patently corrupt.
Under AT&T’s vision, app developers who have the money are given increased access to the markets. The rest of us have to hope our customers don’t mind footing the bill (which they’ve always done), to use our data-hungry, killer app. The difference for the little guys is that now their customers’ perceptions have changed: customers now expect their app company to pay for their wireless usage. However, there is no free lunch and the cost is still there, albeit hidden. Even worse, there may be a surcharge reflected in the monthly subscription fee or the price of the app in consideration of the pre-data.
So what do you as app developers think about this? Certainly companies can’t be calling in asking for a way to pay for data. Even so, it doesn’t affect a relatively small app like my own. Okay, but what happens when your app gets big? When you’re competing with the mega apps like Angry Birds and Netflix, then what? Do you pony over the troll toll, or fight it? Or is there a better way to reach data harmony?
As an aside, at least one developer has made a humorous Toll Troll App.