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AT&T’s “sponsored data” plan: net neutrality wake up call for radio?

Marketplace IconFor years, Internet centered radio companies of all kinds have been quietly ignoring the net neutrality question, that is, the threat that ISPs could set up pay-for-priority data treatment plans for content providers. But it looks like AT&T’s new “sponsored data” scheme is getting at least one public radio show’s attention.

“Could AT&T’s ‘sponsored data’ plans kill public radio?” asks Marketplace. Good question. Here’s the happy face version of the plan from AT&T’s press release:

“With the new Sponsored Data service, data charges resulting from eligible uses will be billed directly to the sponsoring company; the customer simply enjoys their content via AT&T’s wireless data network.  Customers will see the service offered as AT&T Sponsored Data, and the usage will appear on their monthly invoice as Sponsored Data.  Sponsored Data will be delivered at the same speed and performance as any non-Sponsored Data content.”

Basically if a company pays for sponsored data, no data use will accrue to customers using the service, which means no worries that using that stream will cause them to exceed their data cap and incur extra charges.

In response to this announcement, Marketplace’s Dan Weissman interviewed John Bergmayer of Public Knowledge, who asked Weissman the following: “What if Marketplace can’t afford to do deals with AT&T and other carriers around the world to make sure that their content is exempted from the cap?”

“Right,” a mostly skeptical Weissman conceded. “That’s a worry.”

In my case, two of the top three data gobblers on my mobile are TuneIn Radio and Xbox Music, to which I’ve been listening in my car via Bluetooth to my stereo. Pandora and SoundCloud came in a distant second this month, but they’ll get more use soon I’m sure. Between the four services, I’ve consumed over 250MB of data this payment period, which is around a quarter of the 1GB monthly mobile cap lots of cash strapped consumers work with.

What I’m unclear about is who in radio will actually pay for this kind of priority access, but I presume it will be the above mentioned audio services and others with streaming applications like TuneIn, iHeartRadio, and NPR. Obviously they will be free not to pay for the service, but that means that they’ll have to face the prospect of consumers gravitating to other streaming radio services, in order to avoid exceeding their data cap. Frankly, I know that I will.

Where is the FCC on this issue? Well, the agency has set up some pretty weak open Internet rules, which Verizon has taken to court. Here’s some of Public Knowledge’s statement on sponsored data:

“In its Open Internet Order, the FCC detailed the problems that the sort of two-sided market  proposed by AT&T  creates such as inefficiently high fees, provider arms races, and overall reduced innovation.  Unfortunately, in the past two years the FCC has done nothing to understand the role that data caps can play in creating just such a market.  Even the FCC’s own Open Internet Advisory Committee  admitted  that it didn’t have enough information to begin explaining how data caps fit into the Order.

The FCC’s strategy of closing its eyes, putting its fingers in its ears, humming, and pretending that data caps don’t exist needs to stop.  AT&T, along with other ISPs, will continue to test the boundaries of the FCC’s stomach to protect an open internet.  If the FCC doesn’t push back then AT&T, like boundary pushers everywhere, will have no reason to stop.”



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    […] is crucial—a potential example would be allowing wireless ISPs to set low data caps and then sell music applications the privilege of exempting their data from a consumer’s data use ceiling. And it is why […]

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