AT&T Allows Advertisers to Sponsor Mobile Data

Say you want to watch a movie trailer on your smartphone. Why should you pay for the data required to display it when you are essentially viewing an advertisement? That’s the idea behind a program that AT&T calls Sponsored Data.

Businesses working with AT&T can pay for the data that is used to consume their content or services so that it does not show up on a customer’s phone bill. AT&T announced three initial partners working with its Sponsored Data program, including Aquto, an ad platform that provides marketers tools to use sponsored data; Kony Solutions, a company that helps businesses develop apps; and UnitedHealth Group, the health care company, which plans to use the program to stream educational videos to people’s mobile devices. AT&T said that when sponsored content shows up on customers’ phones, a Sponsored Data icon will be displayed to show that the content costs them nothing to watch.

Free Press Policy Director Matt Wood responded to AT&T’s announcement: “Caps are supposed to help wireless carriers manage congestion. But if getting a big check from another company suddenly makes AT&T’s congestion concerns go away, that shows data caps aren't necessary in the first place. Caps are merely another way to pad AT&T’s profits. While sponsored data will be pitched as a way to save customers money, it's really just double charging. The customer is still paying for the connection, and won't get a refund just because Facebook or YouTube or ESPN are also paying for some data usage now. Both the customer and the content or app provider are paying for the same data. Only AT&T makes out better. The extra costs could flow back to consumers too, in the form of higher cable bills, or higher prices to use the websites and apps taking on this expense. For example, if ESPN has to pay more money to AT&T just to reach wireless customers, ESPN is going to try to make that money back somewhere else. Content and app providers that can't pay this new toll to reach customers will be at a huge disadvantage, and may never get off the ground in the first place if they can't afford AT&T's sponsor fees. Letting the carriers charge more or less money to reach certain sites is discriminatory, and it's not how the Internet is supposed to work."