"My understanding is that they will be monitoring television viewing habits, and that it's a condition of service that customers can't opt out of," said Paul Stephens, policy analyst at Privacy Rights Clearinghouse.
"It's frightening," he said.
In the policy update, which applied to AT&T's more than 7 million Internet and video customers, the company said it could collect usage information from subscribers, including the Web pages they view, the programs they record, and the games they play.
Customers must agree to the terms, which take effect on Friday, before using AT&T's services. AT&T's previous policy guidelines did not explicitly say the company owned customer data.
In its broader privacy guidelines, which apply to all retail customers including phone clients, AT&T said it had an obligation to help law enforcement and would act "strictly within the law and under the most stringent conditions."
AT&T, Verizon Communications, BellSouth and Comcast have been named by media reports as havingwith the National Security Agency.
Some of the companies are also facingand are under scrutiny by privacy advocates.
But the American Civil Liberties Union said AT&T was trying to give itself license to do what it wants with client data.
Sherwin Siy, staff counsel at the Electronic Privacy Information Center, said AT&T had likely clarified its policy to protect itself against further accusations.
"It's not protection for consumers but more a waiver of their rights," he said.
AT&T was the first major phone company to explicitly state that it owned customer records since the privacy issue was first raised in a report by the USA Today in May.
Comcast said it reviews its policy on an annual basis.
"We do not sell customer information to third parties, and we do not provide customer information in response to legal and law enforcement requests without valid legal process, such as a subpoena or court order," said Comcast spokeswoman Vibha Agrawal.