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Tag: Sponsored Data

  • AT&T’s Sponsored Data Raises Big Concerns For Consumers and Content Providers

    AT&T’s Sponsored Data Raises Big Concerns For Consumers and Content Providers

    Though it was easy to miss among the flood of CES coverage this week, AT&T has announced a plan to capture new revenue from its data network. Called “Sponsored Data,” the plan would see AT&T charging mobile content providers for AT&T subscribers’ data usage. In other words, Netflix or Facebook could pay AT&T for its customers to access their mobile services without it counting against their monthly data caps.

    How would Sponsored Data influence your mobile habits? Tell us in the comments.

    On a surface level the plan seems like a win for customers, and that’s certainly how AT&T has tried to spin its announcement. Customers who pay high prices for small amounts of data would be offered a break on many of the mobile services that they use the most.

    However, actually looking at what the plan means for AT&T’s data network and the mobile industry as a whole uncovers a range of concerns for consumers, content providers, and the future of mobile access.

    In its original announcement of Sponsored Data, AT&T characterized its new plan as a way for content providers to better reach consumers on AT&T’s network.

    “The Sponsored Data model is just one way we’re helping companies tap into our network to offer differentiated experiences and transform the way they do business,” said Andy Geisse, CEO of AT&T Business Solutions.

    Though the plan certainly would help content creators reach AT&T customers, these same companies already have essentially equal access to those customers as it stands. Sponsored Data could also help customers stay under their bandwidth limits, but AT&T will not be refunding subscribers for unused data. This means that AT&T will essentially be charging twice for the same data – once for customers and again for content providers (that, it must be pointed out, already pay their own bandwidth costs.)

    So, Sponsored Data is essentially a plan for AT&T to charge more for the same data passing over its network. While this may be perfect for AT&T and larger content providers, the plan immediately raised red flags for net neutrality advocates who believe network operators should not function as gatekeepers between customers and content.

    Do you think AT&T’s Sponsored Data violates net neutrality principles? Post your stance in the comments.

    The plan was quickly criticized by Congresswoman Anna Eshoo, who represents most of Silicon Valley. Eshoo released a statement saying that Sponsored Data would put AT&T “in the business of picking winners and losers on the internet, threatening the open internet, competition, and consumer choice.”

    The fear is that customers who hit their data limits would not be able to access non-sponsored content without fear of being charged more by AT&T. In this way, AT&T could potentially manipulate the content flowing through its network, extracting higher revenue from both consumers and content providers.

    Sponsored Data may also set up a system in which companies have to pay AT&T to access its customers in a meaningful way. While big content providers such as Netflix, Google, and Facebook can undoubtedly afford to pay AT&T’s sponsor fees, smaller content companies and the startups that have made the internet as competitive as it is today could be shut out as customers choose not to risk their data on the unknown.

    AT&T would argue that it isn’t specifically picking winners and losers using its network. However, it will be providing its customers with a false choice: AT&T sponsored content for free or other content at the cost of their precious data. For most customers the choice between free and not free isn’t much of a choice. By giving its customers this illusory choice AT&T can claim that it won’t be directly choosing what its customers can access, though it will be very much influencing its network’s winners and losers.

    Though AT&T may have found a way to technically skirt net neutrality concerns while exerting influence over its network’s content, the Sponsored Data plan might just be enough to draw out government regulators.

    Federal Communications Commission (FCC) Chairman Tom Wheeler weighed in on the topic this week, telling the Wall Street Journal that the FCC will be taking a wait-and-see approach to AT&T’s new program. Wheeler made it clear that the FCC is well aware of the concerns surrounding Sponsored Data, and that the organization is “ready to intervene” if the program is deemed anticompetitive or interferes with customers’ internet access.

    Should the FCC curb AT&T’s Sponsored Data ambitions? Let us know in the comments.

    Underlying all of the net neutrality debate is a fact that has largely gone unmentioned. By offering to provide sponsored content to consumers without any potential limit on data use, AT&T is tacitly admitting that its data caps are not in place to better manage its network. AT&T and other mobile providers in the past have characterized data caps as necessary to create stable networks for all of their subscribers, but it now appears that the incredibly high per-GB prices on its data caps represent nothing more than a price gouge on consumers.

    This is precisely why the language in AT&T’s Sponsored Data announcement sounds so disingenuous. AT&T could provide customers with a truly unlimited data plan, allowing them to peruse all the apps and streaming content they please without fear of extra charges. This would also enable content providers to give customers as much content as they can in a truly competitive marketplace without having to pay for AT&T’s Sponsored Data. Instead, AT&T is creating a new tier of content provider access to its network that will be prioritized by customers due to AT&T’s expensive and unneeded bandwidth caps.

  • FCC Watching AT&T’s Sponsored Data Closely

    FCC Watching AT&T’s Sponsored Data Closely

    Early this week AT&T announced its new plan to allow “Sponsored Data” over its network. The plan would see content providers paying AT&T for the data usage costs incurred by AT&T mobile subscribers. The scheme would allow those content providers able to pay the ability to better promote their streaming videos, marketplaces, or other apps to data-conscious AT&T customers.

    The plan immediately came under fire from net neutrality advocates, who see the plan as the beginning of the very thing they had sought to stop from happening. AT&T’s sponsored data also drew criticism from Silicon Valley’s Congresswoman, who stated that the plan could threaten the open internet. Now the plan has drawn the attention of the group AT&T least wants to address its Sponsored Data ambitions – the FCC.

    The Wall Street Journal today reported that the Federal Communications Commission (FCC) is aware of the program and watching it closely. FCC Chairman Tom Wheeler is quoted as saying the FCC will be taking a wait-and-see approach to Sponsored Data. The commission will wait for the program to roll out before making a decision on it, though Wheeler made it clear the FCC is “ready to intervene” if Sponsored Data is anticompetitive or interferes with customers’ internet access.

    Though AT&T claims that Sponsored Data will be consumer-friendly for those customers who often use content from sponsors, critics are envisioning a scenario in which AT&T and content companies stifle competition by curating a selection of popular content that can be accessed without fear of data overages. AT&T made it clear that sponsored content would not get network priority, but low data caps from mobile providers could leave customers with little choice as mobile content begins to take more bandwidth.

  • AT&T’s Sponsored Data Criticized by Congresswoman

    AT&T’s Sponsored Data Criticized by Congresswoman

    Yesterday AT&T announced its “Sponsored Data” initiative, which would allow companies to pay AT&T subscribers’ data costs for accessing their content.

    The plan immediately raised red flags for net neutrality activists, who saw the plan as the very thing they had been fighting to prevent. Though AT&T attempted to promote Sponsored Data as a good thing for consumers who might save on data costs, critics immediately saw how the plan could see AT&T and content providers influencing the competitive mobile marketplace. For example, it’s easy to see how the plan could prevent startups from reaching data-conscious AT&T subscribers, who might instead stick with established mobile services that can afford to pay AT&T’s Sponsored Data prices.

    Criticism for the plan has not been contained to activist circles, however. Today Congresswoman Anna Eshoo spoke out against AT&T’s Sponsored Data plan, saying that it could threaten the open internet. Eshoo is a Democratic representative from California’s 18th district, which includes most of Silicon Valley. She is also a member of the House Communications and Technology Subcommittee.

    Eshoo’s statement, in full:

    “The announcement of a sponsored data program by AT&T puts it in the business of picking winners and losers on the Internet, threatening the open Internet, competition and consumer choice. It’s exactly why net neutrality rules came to exist in the first place and why these rules should apply equally to all forms of broadband Internet service.

    “AT&T’s sponsored data program allows content creators and app developers to pay for a customer’s wireless data much like a company covers the cost of a long distance call using a 1-800 number. On its face, the ability for consumers to access ‘toll-free’ content seems like long-awaited relief from frustrating data caps. But embedded in programs of this type are serious implications for fairness and competition in the mobile marketplace. And we must ask just how beneficial a program like this is to consumers who could ultimately foot the bill for the added cost of doing business.”

    It is not clear whether AT&T will face regulator scrutiny over its Sponsored Data plan. Under current net neutrality agreements, mobile service providers have nearly free reign when it comes to such matters. Still, the attention of legislators is the last thing AT&T needs while trying to fend off competition from T-Mobile.

  • CES 2014: AT&T Announces New “Sponsored Data” Offering

    CES 2014: AT&T Announces New “Sponsored Data” Offering

    AT&T today unveiled a new plan to allow content providers to subsidize data costs for AT&T mobile subscribers.

    The plan, called “Sponsored Data” would allow companies to pay for any data charges that AT&T mobile customers would ordinarily incur accessing those companies’ content. Sponsored Data content will be marked with a special icon denoting that certain apps, videos, and services can be used by AT&T subscribers without fear of being charged extra for data costs.

    It must be pointed out that AT&T’s Sponsored Data is exactly the sort of thing net neutrality advocates have been warning about for years now. Though AT&T emphasized that the new plan does not prioritize sponsored traffic over its network, the system will still be able to push users toward apps, storefronts, and other content provided by those companies that can pay AT&T’s Sponsored Data costs.

    While AT&T is marketing the plan as beneficial to consumers who access content that will be participating in Sponsored Data, the startups that have made the mobile market as competitive as it is today would effectively have to pay AT&T a Sponsored Data ransom – or else convince consumers that their content is worth a bit of consumers’ precious monthly allotment of data. The Sponsored Data plan also provides AT&T with no incentive to raise low (and expensive per GB) mobile data caps.

    “As content consumption has evolved from analog to digital, so have the ways for companies to reach consumers,” said Andy Geisse, CEO of AT&T Business Solutions. “The Sponsored Data model is just one way we’re helping companies tap into our network to offer differentiated experiences and transform the way they do business.”