Today AT&T launched a new service to allow companies to pay for the data on select web content that would otherwise use the data allotted to a consumer’s wireless data plan. AT&T is aiming the “Sponsored Data” service at consumers who want to watch a movie trailer or football game but don’t want to pay overage charges or increase the caps on their data plans.
UnitedHealth Group is an early adopter, footing the bill for educational videos it will stream to customers. AT&T claims it will give low-income users access to quality health information. More sponsors are expected to jump on board the first quarter of 2014.
We’re still collecting reactions from industry experts, but there are a few lingering issues to mull over until we get a handle on the program. While technically legal, consumer-rights groups are worried the program is a shrewd plan to skirt Net Neutrality rules about treating all data equally.
1. It could give big players an unfair advantage - Consumer advocate groups worry big players will be able to snuff out the competition by essentially paying for consumers to use their products. The spirit of the Federal Communication Commission’s Net Neutrality law is that in order to maintain the Internet’s meritocracy, all websites should be equally easy to access and be the same speed for everyone.
Consumer watchdog Public Knowledge worries that AT&T’s program may skirt Net Neutrality, since the law doesn’t fully apply to wireless data (only wireline).
“The FCC needs to protect consumers and creators from internet service providers (ISPs) who want to pick winners and losers online,” they said in a statement.
Activists raised similar complaints when ESPN acknowledged their intent to subsidize costs of streaming sports games last spring.
Right now, all the concerns are purely theoretical–no one knows if it will actually give big players an unfair advantage that hurts the scrappy little guys.
2. It encourages bandwidth hogging and possibly investment - Sponsored Content doesn’t actually create any more bandwidth, it simply helps consumers who want to use data-heavy content. So, on the one hand, this could slow down the Internet for everyone by creating more data hogs on already congested wireless networks. On the other hand, it could subsidize increased capacity, since AT&T will build out the data network to handle all the new users.
I contacted AT&T for a response to how they will deal with the bandwidth issue.
[Image via Flickr]