iPhone Life magazine

Who Benefits from AT&T's Sponsored Data plans: Customers or Businesses?

Recently, AT&T created headlines, raised suspicion, and set tongues wagging with its announcement that they are starting a new Sponsored Data program. This new plan will allow eligible 4G customers to access mobile content and apps without impacting their monthly wireless data plan. In simpler terms this would be like a toll-free service for wireless data where websites that sign up as sponsors will be free for AT&T wireless customers. As a result, no data will be deducted from a surfer’s monthly allotment of data. Data charges will be borne by the sponsoring company.

The sponsored content will be signified by an icon, and subscribers will have a list of sponsored data content on their bill. It will be delivered at the speed and performance of non-sponsored data content.

Will “Sponsors” with Big Pockets Rule?

Customers seem excited to hear about this new program which will help them access content on toll-free websites without worrying about exorbitant data package fees or exceeding their data limit. However, many public interest groups and startups are raising concerns that this service will distort the balance of the market. After all, letting companies pay to get exemption from data caps will work to the advantage of bigger companies.

Consumers will be naturally attracted toward freebie sites and stop exploring new sites that are not a part of the sponsored program. Obviously, not all new sites or startups will be able to afford paying hefty sponsorship fees to AT&T.

Beware, the FCC is Watching

While this program seems to be an innovative way for companies to get their content to consumers, it has almost instantly come under scanner for being considered anti-competitive. The FCC has even taken notice of the new development.

FCC chairman Tom Wheeler said at CES, “My attitude is: let’s take a look at what this is, let’s take a look at how it operates. And be sure, that if it interferes with the operation of the internet; that if it develops into an anti-competitive practice; that if it does have some kind of preferential treatment given somewhere, then that is cause for us to intervene.”

Sponsored Data Benefits Customers and Solves their Data Usage Woes. Oh, Really?

Many digital rights activists have protested strongly against the sponsored program and consider it a clear violation of the FCC's Open Internet rules, which aims to ensure that broadband service companies do not provide preferential access.

According to Jim Cicconi, an AT&T senior executive vice president, his company's service was "aimed solely at benefiting our customers" and is "purely voluntary and nonexclusive." He further added, "We are completely confident this offering complies with the FCC's net-neutrality rules, which our company supports.”

AT&T has dismissed claims that the sponsored data program will work in favor of bigger companies. In fact, one of the first customers for the service is Aquto, a startup.

So what is your take on this new sponsored program? Will it alter the wireless Internet ecosystem or put small startups at a considerable competitive disadvantage?

Email icon
Want more? Get our weekly newsletter:
Carlos Wilson's picture
Carlos works for MyFirstMobileApp.com, a leading Mobile Application Development Company providing custom mobile app solutions for various platforms like iPhone, iPad, Android, and Windows phone. He is a water person, loves underwater diving, and also enjoys reading science journals. You can follow him on Google+, Twitter, and Facebook.