Today at CES, AT&T announced a new service called Sponsored Data, offering a way for companies to pick up the tab for 4G data usage whenever particular products or services are being used. If the service is in effect, users will see a "sponsored" symbol in the status bar, and all the data charges will be redirected to the sponsoring company.
THE ONLY DIFFERENCE IN THE DATA IS WHO'S PICKING UP THE TAB
"Customers just look for the Sponsored Data icon and they know the data related to that particular application or video is provided as a part of their monthly service," said Ralph de la Vega, president and CEO of AT&T Mobility. "That’s what makes this a win-win for customers and businesses." If a studio wanted to promote video streaming, for instance, they could offer to pick up the tab for anyone streaming content over 4G. Similarly, a company might offer to sponsor business-related data usage for its employees, or sponsor data as part of a customer loyalty program. If users know their data on a certain service is comped, the logic goes, it could make them more inclined to use particular services or products. This may open some intriguing doors in the industry; for example, if a retailer decided to offer sponsored data on AT&T for their entire app, more users might be more inclined to shop via that app to help decrease their data usage.
AT&T was careful to make clear that there will be no performance difference between sponsored and non-sponsored data. The only difference is who's picking up the tab. Still, it's easy to see how the proposal might worry net neutrality advocates who cried foul at a>One observer called it "a scary proposition," worrying that once carriers start differentiating between data on the network, fair competition will fall by the wayside.
"A SCARY PROPOSITION"
Even without data caps, it's easy to imagine this service being used to drive smaller firms out of certain markets. If a major company like Apple or Google decided to sponsor traffic to its movie streaming site, for instance, consumers would have to pay with their own data to use a competitor — an extra tax that dramatically changes the nature of the freewheeling internet market. That would mean cheaper phone bills but a much less healthy marketplace, with all the money ending up in AT&T's coffers. Imagine using Google maps without the cost of data or iTunes radio without using your data.
The program is largely possible because of the lack of net neutrality rules for mobile data, but it hasn't stopped advocates from crying foul. The neutrality group Public Knowledge has already criticized the plan, with co-president Michael Weinberg saying, "The company that connects you to the internet should not be in a position to control what you do on the internet." Still, AT&T sees that differentiation as a feature rather than a bug. As Andy Geisse, CEO of AT&T Business Solutions put it, "the Sponsored Data model is just one way we’re helping companies tap into our network to offer differentiated experiences."
Source: AT&T; gigaom.com; publicknowledge.org
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