AT&T’s New “Sponsored Data” Scheme is a Tremendous Loss for All of Us

[Commentary] AT&T’s Sponsored data scheme is actually just a win for AT&T. This plan is a tremendous loss for everyone else.

While people sometimes get lost in the details, at its core network neutrality is a pretty straightforward concept: it is the principle that the company that connects you to the Internet does not get to control what you do on the Internet. With its sponsored data scheme, AT&T is proposing to do just that. AT&T’s relationship with a website, app, or service will control the way that AT&T’s subscribers interact with the Internet. AT&T is imposing its own tax on anyone who wants to connect to its millions of subscribers. Of course, this tax is only attractive to content creators if AT&T’s normal service is too shabby to deliver their content without it. That gives AT&T a big incentive to keep data caps low and overage fees high. Who gets to innovate in a world where you need to pay AT&T to compete? The answer? Established services that can afford to pass the fee onto customers. That’s why net neutrality isn’t really about Netflix or Facebook. They may not like it, but when push comes to shove they will probably pay AT&T’s tax and pass it along to their customers. But the next Netflix or the next Facebook won’t be able to afford to do that at the start. Startups will abandon any potentially “data-intensive” innovation to big players -- a recipe for stagnation. As more established services move to AT&T’s special lane, caps covering everything else may go down bringing the definition of data-intensive down with it.