AT&T's Sponsored Data service isn't a threat, it's an innovation

[Commentary] Rather than introducing a new way of charging for Internet access, what AT&T's Sponsored Data service is actually doing is creating a formal process for advertisers to make their offerings less expensive.

There's plenty to be concerned about in AT&T's Sponsored Data announcement. First, AT&T's prepaid customers cannot participate in the program. Perhaps more worrisome are AT&T's initial launch partners. None of these is a big player and none is the kind of marquee name that AT&T needs to draw attention to the program. However, AT&T said these examples were specifically selected to show the range of companies that could participate in Sponsored Data. I also think there are plenty of problems on the user interface side of things. The idea that AT&T will notify users of sponsored content via their phones' status bar is crafty, but it's an involved concept that might not be easily explained to the average user. Further, what if a subscriber moves from a Wi-Fi network to a cellular network while accessing sponsored data? What about femtocells? And are both HTML5 and native apps supported? What about videos accessed through HTML5? Will users unknowingly rack up unwanted data charges by surfing to other ads not covered by a sponsored advertiser? After all, smartphone status bars aren't always visible, particularly when viewing videos.

At its core, AT&T's Sponsored Data service represents a welcome innovation from a carrier that too often plays catch up to its rivals. T-Mobile first decoupled device subsidies from service plans, and Verizon Wireless first introduced shared data plans. Now AT&T has figured out a way to allow advertisers to pick up the cost of mobile data access. It's an innovation that may well fall flat--but it's an innovation nonetheless, and I'm interested to see how it will play out.