Tuesday, January 07, 2014

CES 2014: AT&T's 'Sponsored Data' service lets companies promote your 4G data use

Your data use may soon be sponsored by specific companies when you are using products or services tied to them. AT&T announced the so-called "Sponsored Data" service Monday at CES (via The Verge).

If your data use is being sponsored, you will see a "sponsored" symbol or icon in your status bar. All the data charges will be allocated to the sponsoring company, rather than your non-unlimited data plan. Usage will appear on a customer's monthly invoice as Sponsored Data.

Ralph de la Vega, president and CEO of AT&T Mobility said:
Customers just look for the Sponsored Data icon and they know the data related to that particular application or video is provided as a part of their monthly service. That’s what makes this a win-win for customers and businesses.
The idea is pretty straightforward. Let's say a streaming service launched and wanted to promote initial use. It could sponsor data use for a promotional period.

A movie studio could also sponsor data use for trailers, and the like.

The idea, though, wouldn't necessarily be limited to products and services. A company might decide of sponsor business-related data use, allocating data used through, say, a VPN to its own coffers.

AT&T was quick to say that there will be no performance differences between sponsored and non-sponsored data. However, it can easily be seen how such a move could violate the premise of net neutrality, in which all data is treated the same.
If a major company like Apple or Google decided to sponsor traffic to its movie streaming site, for instance, consumers would have to pay with their own data to use a competitor -- an extra tax that dramatically changes the nature of the freewheeling internet market. That would mean cheaper phone bills but a much less healthy marketplace, with all the money ending up in AT&T's coffers.
Naturally, AT&T would see no negative impact via the new service. It's still paid for data use, after all. The country's second largest wireless carrier could even see a positive change to its bottom line, if companies were to bid up such data use.

Meanwhile, though, startups and customers might lose out with this new program.

It remains to be seen if the other Big Four wireless carriers (Verizon, Sprint, T-Mobile) will respond to AT&T's move in a similar fashion. T-Mobile USA's Uncarrier plans were duplicated at the other three as the dust began to settle.

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