Is AT&T’s sponsored-data plan good for consumers? Net neutrality advocates say no

AT&T is rolling out a new way to make money — it’s charging businesses to provide online services that won’t count against their customers’ mobile data caps. But does AT&T’s move violate the principle of equal treatment for Internet traffic, a.k.a. net neutrality?

New FCC Chairman Tom Wheeler said Thursday during a talk at the Computer History Museum in Mountain View that it’s something he’ll be keeping an eye on. He said, according to prepared remarks:

It may well be that the kind of offering AT&T has announced enables increased competition and increased efficiency — both things that benefit consumers. It is not the sort of thing that should be prohibited out of hand. But… history instructs us that not all new proposals have been benign. There has to be some ability on the part of government to oversee, to assess, and, if warranted, to intervene.

AT&T says it’s only trying to help customers, and that it’s “confident” its offering complies with net neutrality rules. Said AT&T public policy chief Jim Cicconi, according to re/code:

This is purely voluntary and non-exclusive. It is an offering by that company, not by AT&T. We simply enable it. The bottom line is that this can save money for our customers.

Public advocacy groups see all kinds of things wrong with AT&T’s move, which the company announced earlier this week. They say it can harm smaller business and hinder competition.

From Michael Weinberg of Public Knowledge, according to Hillicon Valley:

A pay-for-play model for companies to reach subscribers won’t help innovation, will surely stifle new entrants, and has no upside for consumers.

Josh Levy, Internet campaign director for Free Press, in a blog post calls out AT&T over data caps, and for what he characterizes as double dipping. And he adds that businesses’ extra costs could make their way back to consumers:

AT&T claims that data is scarce, and that’s why it has to institute low data caps and expensive overage charges in the first place. But if that’s true, why is AT&T suddenly making it ‘free’ to users?

[AT&T] charges customers for monthly data plans, and goes back and charges websites and content providers again for the same data.

App developers’ and content creators’ extra costs could flow back to consumers in the form of higher cable bills or subscription fees. For example, if ESPN pays more money to AT&T to sponsor data for wireless customers, ESPN will make that money back somewhere else, i.e., our pocketbooks.

As we’ve written, the FCC rules on net neutrality differentiate between broadband and wireless providers. (Although the biggest telecoms, as we know, provide both fixed broadband and wireless services.)

When the FCC wrote its Open Internet rules in 2010, it said it recognized that “mobile broadband presents special considerations, including the fact that it is rapidly evolving.” It therefore did not mention mobile providers when it ordered fixed broadband providers not to engage in “unreasonable discrimination of network traffic,” which “could take the form of particular services or websites appearing slower or degraded in quality.”

But it seems some form of discrimination — whether it’s unreasonable is subjective — of traffic could already be happening. Last year, the Wall Street Journal cited unnamed sources when it reported that giant Web companies such as Google and Facebook are paying extra for faster access to their networks.


Photo of mobile phones served by the AT&T wireless network from AT&T’s website


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