This week a Slingbox application was released via the iPhone application store that only worked over Wi-Fi -- AT&T demanding that 3G connectivity be crippled over bandwidth concerns. Of course as we noted on Wednesday, bandwidth isn't all this is about -- given AT&T is cooking up it's own place-shifting application for U-Verse and iPhone customers, which the company confirmed was in production last year.

AT&T wouldn't comment on this potential conflict when we asked them about it, only repeating a statement from earlier this week.

"Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network," says AT&T. "Applications like this, which redirects a TV signal to a personal computer, are specifically prohibited under our terms of service."

The move makes users cry out for a future when carriers just focus on providing the best possible connectivity at the lowest possible price. Instead, what users get is carriers who insist on crippling applications, networks and gear in order to protect their own content ambitions. In the end consumers lose, because traditional telcos operating from positions of comfortable monopoly power aren't exactly gods of innovation -- though they'll certainly insist otherwise.

By late in the week AT&T was facing network neutrality attacks from all fronts, though users appear to have already found a way around crippled 3G functionality in both the Slingbox and Skype applications. Of course it requires a jailbreak, something less technologically sophisticated users aren't going to be willing to do. Gosh, if only AT&T was cooking up their own place shifting iPhone technology that required users to sign up for their U-Verse service...