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FCC Will Be Monitoring AT&T’s Sponsored Data Plan, Prepared to Intervene if Necessary

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Earlier this week, when AT&T announced that they are starting a new Sponsored Data program, a lot of eyebrows were raised. What at first sounded like an interesting new way for companies to get their content to consumers quickly came under fire from around the industry for the potential to be anti-competitive. The FCC has even taken notice, saying that they are ready to act if this Sponsored Data turns out bad. 

FCC Chairman Tom Wheeler was quoted at CES on the subject, “My attitude is: let’s take a look at what this is, let’s take a look at how it operates.” He went on to promise that if the initiative was indeed anti-competitive, the FCC would be ready to intervene.

The problem with AT&T’s Sponsored Data comes when companies have the power to promote a certain application by providing free data and downloads over other competing applications. Companies and developers with the most money could easily sit at the top of download charts because their price has been pre-paid. Luckily for consumers it sounds like the FCC is watching to make sure this does not happen.

Are you a fan of Sponsored Data or fear that it will hurt more than help?

Via: The Verge
  • Turb0wned

    Would be nice if the FCC stopped these data caps instead.

  • Chrisdroid

    And this is why I’m staying with unlimited data t-mobile :-)

  • Jimmy T

    This is double dipping. AT&T gets the consumer to pay for data plans and then gets the company to pay for sponsored data. They get paid twice!

    • MKader17

      Except for the data that is used for the sponsor doesn’t get counted against the consumer

      • Jared Denman

        So for instance let’s say Netflix sponsers the data, then if we watch Netflix on the go it won’t count against our data?

        • sagisarius

          correct

          • Mike Reid

            Until you reach Netflix’s limit…

      • Justin W

        Yes, but if you aren’t paying for data, you can’t access those sites (for example, smartphone with only talk&text or something similar). You still have to pay for the data in order to get to those sites, therefore it’s double dipping in my book.

      • Mike Reid

        So the sponsor pays.

        Guess where the sponsor’s money comes from ? LOL. ;)

    • sagisarius

      Well, this actually isn’t double dipping. That’s why they’re doing it. If they tried double dipping again the FCC would kick their asses pretty hard. This is a really creative way to not double dip… but get a lot of the benefits of doing it. You pay for 2.5 gigs, but Netflix can pay for another 2 gigs of movie watching. Granted… it’s totally a scam, but it’s the standard creative trick to get around following the rule of law.

  • Defenestratus

    I think Washington DC should make it illegal for Ford to charge me more for putting a set of Nitto tires on my new car purchase instead of the Firestones it comes with.

    They’re both tires right?! It should be free!

    • Ian

      Broken analogy. You’re talking about upgrading tires and paying for the upgrade whereas the sponsored data is in addition to any data you are already paying for or using.

      • Defenestratus

        You get Hulu for free. Netflix is an upgrade (That you’re already paying for)

        Whats the difference?

        • Ian

          Lots of people get both Hulu and Netflix, barely anyone wants both the stock and upgraded tires.

  • John Legere

    AT&T is ridiculous. Their Fiber competitor wants $70 a month to monitor your browsing data or $110 to not monitor it.

    • http://www.droid-life.com/ Eric Rees

      I want to believe this is actually Legere.

      • jimt

        Me too.

      • Adrynalyne

        ForeverStuckOnVerizon changed his net handle.

      • John Legere

        I can be, if you pay the right price ;)

        But if you cancel, i wont pay that ETF.

  • boxyboxhead

    This is the solution to removing unlimited data plans? Greed disgusts me. All these big corps rape the little peasants until there is nothing left but numb zombies from all the depression meds. Profits over people, because money is god.

    • Defenestratus

      Everything should be free! I know right! AT&T Is satan! Down with the man!

      (what exactly are they doing thats irritating you? Charging you money for a limited resource except when it comes from a provider who has agreed to work with them to lower their costs?)

      • sagisarius

        The whole “limited” resource thing is pretty much made up. While there isn’t enough spectrum to run your home broadband over LTE, there is no real bandwidth crunch like they kept saying… they made it up. In fact, Verizon actually got cornered and basically admitted to it. They made it up so they could find a way to bill people more for something perceived as limited.

        • MasterEthan

          Exactly! The entire tiered data on wireless and wired is just another way to make more money and there is no true issue it’s trying to solve. Simply put, they want more money from their customers and they came up with a load of crap that everything, including the government, seems to believe. Just a few weeks ago someone in my family brought up why they do it even.

        • Defenestratus

          Do you have a link for that claim that Verizon had to admit it? And from a source that doesn’t have a biased slant on the matter (such as theverge).

          I don’t pretend to be a network engineer – but I do know that bandwidth isn’t unlimited and if you congest a network, it gets slower. I’ve seen it with Verizon’s LTE network since it came online. Why is T-mobile’s LTE coverage so much faster than Verizon’s if its using the same technology (different spectrum but I don’t *think* that matters)

          Thanks!

          • sagisarius

            It wasn’t an article, it was a radio interview on Future Tense (which got renamed to Market Place Tech Report, it’s an NPR show). John Moe was interviewing VZ about shared data… and they acknowledge flat out that there was no real crunch. It was funny, and awkward. I’m actually writing about all of this for my masters degree… so i can tell you, there are a lot of of sources on this.

            There were only really spectrum shortages projected for a few cities, I think NY and Chicago were the only places with the urban density to really have a problem. The problem though could easily have been fixed by putting towers closer together and broadcasting at lower power. And yes, in the long run, at some point, the available spectrum will be a problem in many more places, and more spectrum can be used for faster data…. but what Tmobile is usually talking about is bursts of speed, not sustained speed needed to use a phone day to day, which is what a spectrum crunch really is.

            Anywho, check out “oligopoly” in an economics textbook. The whole spectrum shortage is literally text book. Basically since there isn’t real competition (the companies actually signal to each other to all raise prices together… though tmobile isn’t great at following along), the way they make more money is to create scarcity so there is less supply, more demand… and hence higher price.

            To be fair, tiered data is actually really textbook too (though so was voice minutes).

  • Defenestratus

    OHHHH I’m so glad that the “sponsored” Government is going to be “observing” the “sponsored” data business.

    People act as if what AT&T is doing is the worst thing ever- whereas what is done in Washington D.C. on an everyday business is altruistic and beneficial to all citizens. Get real people. Many palms are getting greased over this deal with AT&T and its not just between the carrier and content providers.

    This kind of crap is what big government is all about — An avenue to fatten the wallets of those in power in return for regulatory back-patting.

    Sickens me to the core.

    • boxyboxhead

      Preach on brother Defenestratus. F the watchers. Who watches the watchers? Paid off politicians and 3 letter acronyms.

    • jak_341

      I was going to write this, but you did already. So I will give you an up vote instead.

      My first thought is once again, the government is butting into private industry practices.

      • jamdev12

        So I understand many people are uptight about what is going on with the government specifically the NSA surveillance with direction from the Presidential Administration and Congress. I’m not condoning that this is right so please read before you blast me for what I want to say.

        A few years ago you would remember that the Supreme Court stated on the case Citizens United. It stated that corporations are people and money from those corporations can flow through the halls of government dictating the direction of this country. This is very similar and it is not fair for the little guy to get stomped by the wealthiest ones. This drives in the face of a common ground rule where everyone would be able to start from and it discriminates against other corporations who would not be able to afford whatever fees are put in place. You can think whatever you want, but I want to make sure that the internet is free to use for everyone. To me the internet should be a basic right, like free speech, or owning a gun. There are many bright young minds that don’t have the resources to come up with the next big innovation. One example is this 15 year old kid Jack Andraka. Through hurdles he succeeded in creating something that will save thousands of lives. He unlike the professors in the universities he was trying to get sponsorship from did not have the means to obtain the information he needed to get his research done and ultimately come up with a detection tool that is cheaper and more sensitive than the current 50 year method.

        http://www.ted.com/talks/jack_andraka_a_promising_test_for_pancreatic_cancer_from_a_teenager.html

        Of course some will say that Jack is also opportunistic because he filed a patent on his invention. We will see what he does with this patent, but I would think that he is filing a patent, not to get rich of his invention, but to prevent a company from filing one that is similar and getting rich of his invention.

        To me I think the FCC is doing the right thing. AT&T is trying to undermined the rules that were laid out to allow content to flow freely through all networks and not be QoS based on how much money one pays. Citizens United is at the heart of all that is wrong with our country right now. You and me and all the little guys have very little voice compare to companies that can put money on the table in front of government officials and tell them, you are either with us, or we’ll sponsor your opponent and clobber you on the next election. In a way this is our fault as well for not doing our due diligence and weeding out the politicians that will do everything to get rich versus the ones that will do the right things for the citizens they represent.

        • Defenestratus

          Well Citizens United didn’t say that “Corporations are people.” Thats what sycophants of leftist populism espouse. Citizens United merely allowed Corporations the same ability to donate to political parties and action committees that your or I or rich Hollywood Leftists (And Labor Unions) do because they determined that political donations are a form of 1st amendment free speech.

          My point is that getting the government involved in this is going to make the problem *worse* not better. Net neutrality is just a synonym for Government picking winners and losers. And before the defenders of NN get all over me, just realize that its the same government you’re entrusting to maintain what you claim is a level playing field that has covertly cost you your vaunted online privacy via the NSA. You really trust those wheelers and back-room-dealers to play impartial referee in a government-regulated internet?

          • Freedom For All

            Its “Unlimited Donations.” Corporations should have no influence whatsoever in our government and writing and creating laws. All they do is circumvent laws for their own greedy desires at any cost, whether or not it hurts citizens or not, they don’t care. Corporations keep jobs over seas, keep their money over seas, don’t pay Taxes here or very little, and all want to stay and live here for the Securities and Freedoms that they make no investment or contributions to. Either support and Invest in America or GTFO!

            If you want examples, research Monsanto for example, altering food and the genetic level with no benefits whatsoever except for them to patent it and make more profit and a monopoly while destroying the original seeds we have used for thousands of years. Monsanto has even had former executives get hired at the FDA at the same time they needed untested products to miraculously get pushed through by the same people who worked for them. No one even Knows the long term affects of this genetically altered food, and No One can even test Monsanto’s altered products till the patents run out, good or bad, they’ll be sued out of existence. They are one of or the worst Corporations destroying America. Others like GE Apple and Verizon, just want to circumvent everything for Control and Monopolize as much as possible and not to pay a single dime to anyone but themselves. And yes it has been proven that all the tax breaks they have all received did nothing to create jobs but to just make themselves richer.

            If Corporations paid their fare share there would hardly be a debt if they paid 30% like you and me and the average American have to.

          • Jordan Oliver

            Yep, a phrase used by “sychophants of the leftest populism”… and Republican Presidential nominees, “Corporations are people, my friend.”

    • MustWarnOthers

      I don’t really get what you’re saying here. People already know that the pawns in Government do all of the heavy lifting, and that our Government is infected to the core with big industry lobbyists and slimebag politician moles.

      That doesn’t mean that we shouldn’t have some semblance of oversight, however weak it may be.

      If big media gets into the business of sponsoring data for mobile, you can be damn sure it won’t be for free. Any company willing to sponsor data will probably hike their prices. On top of that, we’re already dealing with mobile carriers squeezing customers for every kilobyte they are worth. I’m sure if AT&T has companies sponsoring data, that will give them even more of an excuse to lower data caps and/or charge more for the same amount of data coming through. The entire industry has had infrastructure help from the government for roll out (see: taxpayers) and yet prices just don’t seem to be falling for postpaid customers.

      While I’m sure you and I agree on about 99% of things regarding the mobile industry, the players involved and how the government can be a dangerous intrusion, I think this blanket mentality of “OMG BIG GOVERNMENT BAD” is exactly what the big players want. When real, helpful consumer focused watch dogging is introduced, people freak the hell out. Yet when private companies collude with the government to put the pressure on the consumer, it’s just capitalism working as intended and nobody gives a damn.

      • Bald_Sasquach

        Well said. This is one of many instances where comments like “This kind of crap is what big government is all about — An avenue to fatten the wallets of those in power in return for regulatory back-patting” completely baffle me. You really think AT&T is the victim here? That people would rather deal with infinetely more BS and get paid less to work in government “to fatten their wallets?” As opposed to the profits and increasing customer screwing AT&T “suffers” year after year?

        And I just had to laugh at “Citizens United merely allowed Corporations the same ability to donate to political parties and action committees that your or I or rich Hollywood Leftists (And Labor Unions) do because they determined that political donations are a form of 1st amendment free speech.” Oh yes, these poor Coprorations were cowering under the much more powerful influence of actors, directors, and car makers! You all remember how Hollwood has caused all these financial crises right?

  • Adrynalyne

    In regards to the question, I think it is a bad idea all around. It makes for unfair competition.

  • Adrynalyne

    Would be nice to see them intervene with Verizon blocking activation of LTE devices.

    • feztheforeigner

      And Google Wallet. I still have absolutely NO idea how they got away with that for so long. How they still don’t allow purchases on a bunch of devices is insane >:(