AT&T's Sponsored Data Plan May Change The Balance Of The Mobile Economy
AT&T announced a Sponsored Data plan that will allow brands to subsidize user data so that streaming their content would not cut into monthly data allotments. It will likely be available by the end of the first quarter of this year.
Here's a hypothetical example: Netflix signs onto this plan. A user subscribed to the Sponsored Data plan will be able to watch all the shows and movies he wants on his phone without it counting against his monthly data.
The sponsored content will be signified by an icon, and subscribers will have a list of Sponsored Data content on their monthly bill, according to CNET.
Data is expensive. AT&T currently offers a mobile data plan for smartphones that charges $55 per month for 2 GB of data. That barely gets an hour of HD video streaming.
AT&T, which has said data caps are now necessary for the size of it network, likened its subsidized program to toll-free 1-800 numbers.
United Health Group, app development platform provider Kony Solutions, and the startup Aquto are the first companies who have signed on.
AT&T states that the payment plan will provide a compelling option for users stressed out by their data limitations. Its critics say that despite its allure, it will end up upsetting the entire mobile market.
The Verge's Nilay Patel sees it as a threat to fair competition, and one that will not benefit the consumer in the long-run:
The digital rights group Public Knowledge is also against it. Its acting co-president Michael Weinberg told Adweek:
And these fears may have merit. The FCC wants to see how it will play out, and will monitor the new service to see if it creates an anticompetitive marketplace and interferes with access to the Internet.
"Make no mistake, we're ready to intervene," said FCC chairman Tom Wheeler at CES.
FCC commissioner Ajit Pai added, however, that it would be imprudent for his organization to dismiss a business model before it even went into practice.
Keep in mind that the FCC chose to exempt wireless broadband from its net neutrality regulations in 2010, which prevented broadband providers from discriminating between different content providers.