AT&T is considering a 2013 business model in which mobile service providers would shoulder some of the costs associated with high data use, says a new report.
all too well that Apple iPhones, Long-Term Evolution (LTE) network rollouts and
high-speed mobile broadband support don't come cheap. Faced with all three, the
carrier is considering new ways to unload its cost burdens, including letting
mobile service providers pay for the cost of the data traffic associated with
some particularly burdensome applications and features, such as streaming
movies, The Wall
reported Feb. 28.
Senior Executive Vice President John Donovan likened the cost model to 800
numbers or "freight included."
"A feature that we're hoping to have out sometime next
year is the equivalent of 800 numbers that would say, if you take this app,
this app will come without any network usage," Donovan told the paper in
an interview at the Mobile World Congress event in Barcelona, Spain.
and Verizon Wireless no longer offering unlimited data plans, consumers may
need little convincing of the benefits of downloading a video from a content
provider willing to pay the price of the data transmission. Convincing content
providers of the perks may take a little more doing. However, Donovan says
AT&T is seeing interest from companies that see the model as a way to court
consumers who are nervous about data-intense services.
They see an
opportunity, said Donovan, to "create new revenue streams that don't exist
today and find a way to split them."
convinced of the benefits of the model are consumer-interest groups, which
believe it could favor deep-pocketed app developers and content providers.
traipses back into the net-neutrality spaceone extensively argued tenet of
which is that, in the interest of maintaining a truly open Internet, special
treatment shouldn't be given to those who can afford to pay more. Current
Federal Communications Commission (FCC) rules are less stringent on mobile
networks than landline ones, however, which would reportedly make it difficult
to challenge such a model if AT&T were to go through with it.
If it does,
it's difficult to imagine Verizon and others won't follow suit. With smartphone
and tablet use rising, along with machine-to-machine connections, carriers are
scrambling to find ways to better support the data-hungry ecosystems they've
helped build, and to profit still more from them.
one key to this, and Verizon is the latest carrier working to convince the FCC
to let it take on some more. Verizon struck deals to purchase spectrum from Cox
Communicationsafter it waived the white flag on its wireless business, finding
the market too difficult to compete inas well as with the cable conglomerate
SpectrumCo, a joint venture between Time Warner Cable, Comcast and Bright House
However, T-Mobile and nine public interest groups have asked the FCC
to stop the deal
, which they believe would unfairly benefit Verizon
by giving it an "excessive concentration" of wireless spectrum.
according to an Associated
report, has defended the deals, saying that turning on
currently unused spectrum will benefit wireless subscribers.
fourth quarter of 2011, AT&T enjoyed what it called a "blowout quarter for sales,"
in net income of $6.7 billion on revenue of $32.5 billion.
during the same quarter, posted the highest revenue growth in company history
bringing in $28.4 billion in revenue and signing 1.5 million new wireless