This Data Is Brought to You by the Letters A, T, and T

Posted by Lorie Robinson, Product Manager

January 21, 2014; 4:01 PM

binary_MP900390095_316x225_RGB_72dpiThe annual Consumer Electronics Show (CES) was held recently, and one company’s announcement caught the eye of the technology blogosphere. In a bold move, AT&T introduced its long-rumored Sponsored Data billing program. Mobile app developers and content providers can now pay AT&T to sponsor bits of data consumed by their customers, rather than counting it against the customer’s data plan.

Here are some examples being bandied about:

  • A health insurer could sponsor an educational video that explains how to fill out an insurance form. Filling out the form may count against your data plan, but watching the video would be on the house.
  • A movie studio could sponsor the trailer of an upcoming blockbuster.
  • A small startup could sponsor all bandwidth on its new app during an introductory period.

Another possibility: an employer that supports bring-your-own device (BYOD) could foot the bill for the data its employees, on their personal devices, spend on work-related apps — like e-mail, or Dropbox, or Evernote, or Docs2Go, or Abillity, or . . . you name it. If you use it for work, perhaps your company will pay AT&T for the related data charges, freeing up your personal data plan for more Candy Crush Saga and House of Cards.

This may sound great to you as a consumer, but consider it from the perspective of the app developers and content providers. If I’m a startup, I may not be able to afford paying my customers’ data charges for my fledgling app. However, if my bigger, stronger competitor has money to burn, it could sponsor its customers’ data use, enticing folks away from trying out my app. And, if my content catches the eye of a Google, Facebook, or Amazon . . . well, shut the door and turn out the lights.

Some are suggesting that this will start to create a caste system of sorts, in which consumers flock to sponsored mobile content and ignore that which is not, ultimately squeezing out the little guy. Others have gone so far to accuse AT&T of double-dipping by charging consumers for data plans while, at the same time, collecting from app developers who choose to sponsor data.

Although AT&T claims there’ll be no favoritism and startups can use the program to their advantage, FCC Chairman Tom Wheeler has put AT&T on notice that his agency is watching and won’t hesitate to intervene if it feels the sponsored data plan favors some content providers over others and stymies competition.

So, is sponsored data a great idea whose time has come, or the beginning of the end for online neutrality? Let us know in the comments.

Topics: BYOD, technology, net neutrality, product development, Federal Communications Commission (FCC)