Enlarge / An AT&T sign outside a company office in New York City.Getty Images | Roberto Machado Noa

AT&T CEO John Stankey said the company may offer cellphone plans subsidized by advertising, giving customers monthly discounts of $5 or $10 in exchange for ads on their phones. "I believe there's a segment of our customer base where given a choice, they would take some load of advertising for a $5 or $10 reduction in their mobile bill," Stankey said in an interview with Reuters yesterday. Stankey apparently didn't offer details on what form the ads would take.

According to Reuters, Stankey said that AT&T's ad-supported phone plans could be introduced in "a year or two." AT&T is already doing back-end work in its targeted-advertising system that could increase the value of such plans to AT&T's ad-sales business:

AT&T engineers are creating "unified customer identifiers," Stankey said. Such technology would allow marketers to identify users across multiple devices and serve them relevant advertising.

The ability to fine-tune ad targeting would allow AT&T to sell ads at higher rates, he said.

Stankey also said that a planned ad-supported version of HBO Max would play an important role in ad-supported phone plans, but he didn't offer further details, according to Reuters.

"Various companies including Amazon, Virgin Mobile USA, and Sprint's Boost Mobile have tested advertising-supported phone services since the early 2000s but they have not caught on. AT&T is hoping that better advertising targeting could revive the idea," Reuters wrote.

AT&T used to charge $29 to $60 extra for privacy

AT&T's CEO may be right that some customers would accept ads in exchange for discounts, though many of those would be people with low incomes who can barely afford phone service in the first place. AT&T does offer subsidized plans to people with low incomes through the US government's Lifeline program, but AT&T's website says its Lifeline wireless plans are only available in 13 of the 50 US states, and only in "certain areas" of those states.

AT&T has a controversial history of putting targeted ads on Internet service in exchange for discounts. In 2015, AT&T offered a $70-per-month gigabit home-Internet plan, but that price was only available to customers who agreed to let AT&T analyze their Web browsing histories in order to deliver targeted ads. Customers who didn't opt in to the traffic-scanning program that AT&T called "Internet Preferences" had to pay $99 a month instead. With some bundled plans that included broadband along with TV or phone service, the extra cost for the more private plan was over $60 a month.

AT&T ended the Internet Preferences program entirely in September 2016, but that wasn't the end of AT&T's plans to deliver ads based on its users' browsing histories. In June 2018, for example, AT&T announced it was buying an advertising company that delivers personalized ads based on Internet users' Web browsing habits and then combined the new subsidiary with AT&T's existing advertising and data-analytics businesses.

Trump killed broadband-privacy rule

AT&T's much bigger purchase of Time Warner Inc. provided even more capabilities for joining AT&T's telecom services with entertainment and advertising. When pitching the acquisition to government officials in 2017, AT&T said that "more relevant advertising in ad-supported video services" would be one of the merger's primary benefits. In testimony to Congress in December 2016, then-CEO Randall Stephenson said: "We expect to deliver mobile-optimized content and services, and ad-supported services that shift more costs from consumers to advertisers."

The Obama-era Federal Communications Commission tried to impose limits on telecoms' use of personal data for advertising, with a rule requiring ISPs to get opt-in consent from consumers before using or sharing Web browsing data and other private information. But early in 2017, the Republican-controlled Congress and the Trump administration killed the rule before it could take effect.

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