AT&T Sponsored Data: FCC Chair Says 'Let's Take a Look'

AT&T's controversial Sponsored Data offer has been called a threat to the "open Internet, competition and consumer choice."

AT&T on Jan. 6 introduced Sponsored Data plans, which let businesses pick up the tab for mobile users so they can watch sponsored videos, engage with apps or shop on a site without spending a cent of their own on data costs. Pushback from consumer-advocacy groups was near-instant, and the Federal Communications Commission (FCC) has now agreed to look into the practice, which critics fear will undo the ideal of an "open Internet" that's an equal playing field for all.

"My attitude is: Let's take a look at what this is, let's take a look at how it operates," FCC Chairman Tom Wheeler said at the Consumer Electronics Shows (CES) Jan. 8. "And be sure that, if it interferes with the operation of the Internet, that if it develops in an anticompetitive practice, if it does have some kind of preferential treatment given somewhere, then that is cause for us to intervene."

On Jan. 9, Public Knowledge sent Wheeler a letter, applauding his comment and putting pressure on him to follow through.

"AT&T's sponsored data scheme is just the most recent example of the troubling trend of ISPs using data caps to threaten an open Internet," wrote Michael Weinberg, acting co-president of the Washington, D.C.-based consumer advocacy group.

"First and foremost I urge you to turn your attitude into action and open a proceeding into AT&T's sponsored data scheme. Gather the information required to evaluate if the scheme interferes with the operation of the Internet, if it is or has the potential to be an anticompetitive practice, or if it creates an opportunity for preferential treatment," Weinberg continued.

"Second, I urge you to investigate data caps more broadly. The FCC's Open Internet Advisory Report vividly illustrated the Commission's—and the public's—embarrassing lack of real information about this vital element of today's broadband economy."

The same day AT&T introduced its plan, Congresswoman Anna Eshoo, D-Calif., put out a statement saying that AT&T is putting itself in the position of "picking winners and losers on the Internet" and "threatening the open Internet, competition and consumer choice."

Echoing sentiments also expressed by the Free Press, a nonprofit dedicated to universal and affordable Internet access, Eshoo added that businesses that are made to increase their costs will eventually pass those costs back to the consumer.

"On its face, the ability for consumers to access 'toll-free' content seems like a 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," said Eshoo. "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."

Congresswoman Marsha Blackburn, R-Tenn., defended AT&T's offer, saying in a statement, according to The Hill, "Businesses shouldn't have to ask the FCC for permission to provide good services consumers demand in our dynamic and competitive environment for cell service."

Jim Cicconi, AT&T senior executive vice president of External and Legislative Affairs, said in a statement:

"AT&T's sponsored data service is aimed solely at benefiting our customers. It allows any company who wishes to pay our customer's costs for accessing that company's content to do so. This is purely voluntary and non-exclusive. It is an offering by that company, not by AT&T. We simple enable it. The bottom line is that this can save money for our customers. We see no reason why this is not a good thing.
"Also, we are completely confident this offering complies with the FCC's net neutrality rules, which our company supports."

EDITOR'S NOTE: This story has been updated to include a statement from AT&T.

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