Sounds like they gather your full browsing history, and then assist 3rd-party ad networks in targeting their ads at you. Or, worse yet, just hand over your browsing history for ad networks to process. Their marketing materials don't seem to make this clear.
> Who thinks that their browsing habits are hidden from the ISP (without using a VPN)?
Who thinks their browsing habits are hidden from anybody? The internet is a packet-switched routed network that sends almost everything in clear text. Anybody who receives or forwards a packet can mine it for data.
I'm guessing this is just giving them a legal justification to do whatever they want with your data and making that the new standard agreement at the same time, by providing a false benefit to the consumer. They also get to make extra money off the people who prefer privacy in this setup.
AT&T never says they will not inspect the packets nor keep the Government from inspecting the packets. They just give a lower priced option where they target you with ads/or sell your browsing history, etc. NSA is splitting off the packets 100% at the major uplinks regardless of what AT&T or any other provider does.
What do people think the ISP does with the packets? Who thinks that their browsing habits are hidden from the ISP (without using a VPN)?
So is this just an expensive opt out of targetted ads, or is it actually providing extra privacy features?