AT&T Sponsored Data Lets Companies Pick Up the Data Tab for Visitors

AT&T likens Sponsored Data to an 800 number. Consumer-protection groups say AT&T is double-dipping and creating barriers to online competition. 

AT&T introduced Sponsored Data Jan. 6 during a major event at the 2014 Consumer Electronics Show (CES). John Donovan, senior executive vice president of AT&T Technology and Network Operations, called it a “new way for eligible 4G customers to enjoy mobile content and apps without impacting their monthly data plan.”

The carrier further likened the plan to an 800 number, or free shipping—it’s a motivation that businesses can pay for to attract consumers to themselves over their rivals. App developers, Websites, video creators and other content providers can sign up for Sponsored Data plans and ensure mobile users that visiting or interacting with their content won’t affect their data-use budget.

“Whether it’s shopping, banking entertainment or personal wellness, mobile content is increasingly available for customers almost anywhere and anytime. And that’s what makes this a win-win for customers and businesses—customers just look for the Sponsored Data icon and they know the data related to that particular application or video is provided as part of their monthly service,” Ralph de la Vega, CEO of AT&T Mobility, said in a statement.

Sponsored Data can be used with existing sites and applications, and can be integrated into existing platforms and services. In its developer portal Website, AT&T also offers features to help sponsors manage their offers and measure the impact of offers (basically, assess their ROI) using an analytics engine.

Consumer advocacy group Public Knowledge immediately pushed back, calling for the Federal Communications Commission (FCC) to investigate data caps and their use and prevent ISPs from picking “winners and losers online.”

“This is but the latest example of how data caps are increasingly becoming used to threaten the open Internet,” Michael Weinberg, acting co-president of Public Knowledge, said in a Jan. 6 statement.

“As AT&T CEO Randall Stephenson announced in May, data caps are all about forcing content creators to pay and are no longer about any sort of network congestion,” Weinberg continued. “In December, Stephenson admitted to investors that they had addressed the network capacity issues that were used to justify data caps in the first place.”

Weinberg added that when it was reported in May 2013 that ESPN was negotiating with a major carrier to pay to be exempt from data caps, Public Knowledge showed this to be a violation of net neutrality.

“The company that connects you to the Internet should not be in a position to control what you do on the Internet,” said Weinberg. “In addition to being a ripoff for both consumers and content creators, AT&T’s plan erects a massive barrier in front of anyone hoping to be the next big thing online.”

Matt Wood, policy director of Free Press, a nonprofit that advocates for universal and affordable Internet access, also accused AT&T of misusing data caps—which were intended to help carriers manage congestion—and of double-dipping.

“The customer is still paying for the connection and won’t get a refund just because Facebook or YouTube or ESPN are also paying for some data usage now. Both the consumer and the content or app provider are paying for the same data. Only AT&T makes out better,” Wood said in a Jan. 6 statement.

Wood added that the extra costs incurred by content providers could flow back to consumers in other ways—that ESPN or YouTube, etc., would try to make back the money in other ways. And of course, those companies that can’t pay will be at a disadvantage.

“Letting the carrier charge more or less money to reach certain sites is discriminatory,” said Wood, “and it’s not how the Internet is supposed to work.”

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

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