When it first headed over to Apple and awaited approval, the SlingPlayer Mobile for iPhone app was intended to work as it does on the other platforms it already runs on (Windows Mobile, Palm, BlackBerry and Symbian) — specifically, that it would place-shift your TV content from your Slingbox over the 3G cell network as well as over Wi-Fi. Unfortunately, the app finally debuts today for $29.99, but will only work over Wi-Fi because the 3G streaming capability has been removed.

After the collective internets expressed shock and anger over this turn of events, AT&T came forward to make a statement claiming responsibility for crippling the 3G functionality (full statement via Engadget is included in the continued contents of this post). The gist of the reasoning was basically this: the iPhone is popular + video streaming consumes a lot of bandwidth + our bandwidth is limited = we can't allow SlingPlayer's video streaming on the iPhone on our network.

Let's unpack this a bit further with some help from brilliant minds in tech: Engadget's Chris Ziegler nails a great summary: "you're saying your 3G network would fold like a cheap suit if these apps took off." Yep. Beyond the widespread anecdotal evidence of frequently dropped calls at almost any time, we know from iPhone-toting geek mecca events like SXSW that AT&T's network simply just can't handle the load when stressed. And that was primarily non-video streaming usage, to boot.

But wait — isn't 3G streaming enabled for the SlingPlayer apps on other platforms? Why yes, yes it is. So why then, is the iPhone so special, you might ask? AT&T has an answer for that too — they are claiming that smartphones like the iPhone are actually personal computers "in that they have the same hardware and software attributes as PCs." OK, that might hold some water, but then... what about all the other smartphones other than the iPhone that can run SlingPlayer over 3G? And what about the "dumbphones" that can do the same? And if the iPhone is that popular for AT&T, wouldn't they have some incentive to actually attempt to meet the demands that platform is placing on their network so as to, you know, retain customers and perhaps sell even more iPhones?

At this point something starts to feel familiar — where have we recently heard a network provider complaining about customers using too much of the network services they're paying generously for? Oh yes, that's right — when Time Warner Cable crowed about how the entire internet would go all asplody if they didn't start metering bandwidth. Kevin Tofel over at the excellent mobility blog jkOnTherun rightly calls the SlingPlayer debacle as a network neutrality issue: "they’d really rather have you pay them for television content." Why would AT&T want to let you stream TV you've already paid for over their network when they can fleece you $15-$30 a month for their Mobile TV service with less selection? And why aren't they worried about their network capacity if Mobile TV "takes off"? Probably because they know at $30 a month it isn't going to be wildly popular; they also tightly control Mobile TV's rollout to various markets and the small selection of devices the service actually works on — which doesn't currently include the iPhone. So maybe this is a power play to pull rank on Apple and put pressure on them to offer Mobile TV — a service that competes with iTunes store video downloads — on the iPhone? Or even more simply, a power play to pull rank on Apple, period?

In either case, it's a reminder of how much consumers are beholden to the whims of the carriers, who despite levying steep data prices on consumers seem to be incredibly skittish about those consumers actually using the data they're paying for for services they want to use. Especially if those services compete with services offered by the carriers. And especially if those services might prove wildly popular without the carrier being explicitly cut in on the deal.

It also makes the SlingPlayer for iPhone app incredibly bad value for $30. It's one of the most expensive apps in the entire store, is designed specifically to provide "your TV on the go," and only works over Wi-Fi?! The most typical spot for parking on free Wi-Fi is in one's home where presumably the TV itself already lives. AT&T is quick to chest thump about being the "industry leader in WiFi" but even as a frequent traveller I've never actually stayed in a hotel they served. Nor am I or most people jazzed about plunking down in a Starbucks or Barnes & Noble just to watch TV. The app is no longer "TV on the go," it's "TV if you happen to park yourself at one of these few compatible locations and sit there long enough to watch a show." Thanks but no thanks, guys. Let's hope those CDMA iPhone rumours have some legs although with an iPhone on Verizon's network, we're more likely to have the opposite problem as VZW is notorious for crippling Wi-Fi functionality altogether. Surely there's a happy medium somewhere...

Here's the full text of AT&T's statement:

"Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network. The application does not run on our 3G wireless network. Applications like this, which redirect a TV signal to a personal computer, are specifically prohibited under our terms of service. We consider smartphones like the iPhone to be personal computers in that they have the same hardware and software attributes as PCs.

That said, we don't restrict users from going to a Web site that lets them view videos. But what our terms and conditions prohibit is the transferring, or slinging, of a TV signal to their personal computer or smartphone.

The Slingbox application for the iPhone runs on WiFi. That's good news for AT&T's iPhone 3G customers, who get free WiFi access at our 20,000 owned and operated hot spots in the U.S., including Starbucks, McDonalds, Barnes & Noble, hotels, and airports. AT&T is the industry leader in WiFi."

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