• by Mark Walsh  @markfwal, May 13, 2009

AT&T didn't do much to inspire confidence in the quality of its 3G network by restricting the new SlingPlayer Mobile iPhone application to operating only on Wi-Fi.

The telecom giant defended the decision, which left many industry observers scratching their heads Wednesday, on the grounds that the video-streaming SlingPlayer app would prove too much of a bandwidth hog.

In a statement issued Tuesday, AT&T said: "Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network."

It further stated that apps "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."

The SlingPlayer app, from Sling Media, enables users to stream live and recorded television programming from their home entertainment systems to their mobile devices. On Wednesday, the company formally announced the Wi-Fi-only version of the software for the iPhone and iPod touch for a hefty $29.99 through Apple's App Store.

AT&T's statement was intended to address questions and criticism that had already arisen over its step to ban the SlingPlayer app from its network. But the gesture did little to quell the controversy over the move that played out across the tech blogosphere and media on Wednesday.

Many commentators noted that limiting the SlingPlayer to Wi-Fi connections undercut the very raison d'etre of the place-shifting technology that lets people watch their favorite shows on the go, from anywhere. "Restricting an app like this to Wi-Fi denies people most of the opportunities they'd have to actually take advantage of the content," said Jeremy Horwitz, editor in chief of iPhone/iPod-focused news site iLounge.

AT&T used the opportunity to tout its Wi-Fi network, giving iPhone 3G subscribers free access to "our 20,000 owned and operated hot spots in the U.S., including Starbucks, McDonald's, Barnes & Noble, hotels, and airports."

Horwitz also pointed out that the iPhone already includes an integrated YouTube browser that plays back streaming video over its 3G and older EDGE network. The App Store also currently offers video-centric apps from CBS Interactive's TV.com, Babelgum and others. A Hulu app is rumored to be in the works. "What's the difference?" asked Horwitz.

AT&T itself assured that it will not prevent iPhone users from going to a Web site to 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 company stated. Whether the iPhone really constitutes a "personal computer" as itself provoked debate and ridicule.

"Never mind the fact that you've inexplicably labeled the S60-powered Nokia 6650 (which can run SlingPlayer, by the by) a dumbphone simply because it lacks a QWERTY keyboard," fumed Chris Ziegler on AOL's Engadget blog.

He went further, suggesting that AT&T was mainly concerned about its ability to handle additional network demands from streaming via the SlingPlayer. "Look, AT&T, just tell it like it is: you're saying your 3G network would fold like a cheap suit if these apps took off," wrote Ziegler.

Broadband Reports.com, meanwhile, noted that AT&T is rumored to be readying place-shifting capability for video from its U-verse TV service via the iPhone. "We assume slinging will be ok over 3G when AT&T ultimately releases an application that place shifts AT&T U-Verse content to iPhones using the exact same network," quipped the site's editor, Karl Bode.

AT&T did not respond to a media inquiry Wednesday. For its part, Sling Media expressed satisfaction that its iPhone app had been approved and was now available in the App Store. "However, we believe that SlingPlayer Mobile used on a 3G network truly delivers on the 'anytime anyplace' offering, and so we hope to continue to work with Apple and its partners to provide this solution for customers," said David Eyler, product manager for the company.