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AT&T Says Its Sponsored Data Program Does Not Violate FCC Net Neutrality Rules

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As you can imagine after coming under fire shortly after being announced, AT&T is defending its new Sponsored Data program, claiming that it does not violate the FCC’s Net Neutrality rules. FCC chairman Tom Wheeler said within hours of AT&T making it official that his organization would take a deep look at the program to make sure there are no reg flags being raised. Should they see something that would raise an eyebrow or two with companies paying for customers’ data, they are prepared to intervene. AT&T issued a statement in response through Jim Ciccioni, AT&T senior EVP of External and Legislative Affairs (holy title), and has said that they are “completely confident” that they comply and that the program is meant only to benefit customers. 

Analysts and pundits across the industry are taking stances on both sides, with some even arguing that because AT&T’s program is being sold as one that saves customers money, that they may be in the clear with the FCC no matter what. Others argue that this is simply a way for AT&T to control what you can and cannot see on your phone.

Ciccioni had the following to say on the matter:

“AT&T’s sponsored data service is aimed solely at benefiting our customers,” he said. “It allows any company who wishes to pay our customers’ costs for accessing that company’s content to do so. This is purely voluntary and non-exclusive. It is an offering by that company, not by AT&T.”

I have yet to weigh in on the subject since I’ve been walking 8 miles a day at CES, but here is my take. AT&T’s Sponsored Data sounds like a terrible thing for consumers in the long run. AT&T is going to sell this as a benefit to consumers, since it’ll save them on data costs. The problem is that we don’t know the deals made by companies to get their products in your face, to be listed first, to be sped up when accessed, etc. We also don’t know how this affects the rest of the crowd that hasn’t paid to be promoted or to provide “sponsored” data. I think it’s safe to assume that anyone paying expects to be held above someone who isn’t, so the big dogs with plenty of money will continue to be in your face at all times. In other words, AT&T will essentially be able to limit whatever it is that you access on their network because it has been bought, even though they won’t admit that.

AT&T is selling this as a way to build brand loyalty, as a program that will “transform” mobile marketing, and offer advertisers “compelling solutions” to get their products in your face. Are we talking pop-up ads when I’m at the movie theater? Are we talking a slower experience when using an app from Pizza Hut over Domino’s?

The beauty of the internet is that it’s wide open. If AT&T is allowed to sell parts of it, this is only the beginning. Verizon will be right behind them. Who knows who will then be next. Your data experience will be bought. It will no longer be yours. You ready for that?

Take a watch of the video below to get an understanding at how bad this is going to be.

Via:  CNET
  • Andrew T Roach

    See in America the only thing that matters is what the corporations think and what politicians they have in their pocket. Sponsored Data is coming. Its so much easier to force ads down your throat when the consumer isn’t paying for the data.

  • Mark

    So AT&T just admitted that their network can handle more throughput than their data caps suggest. As long as *someone* pays them, they’ll *allow* the bits to pass through. What a freaking racket.

    I, for one, hope that no content providers go for this. Internet content adds value to AT&T’s service, not the other way around. ISPs would do well to remember that.

    • FreedomForAll

      These companies are not going to want to pay every single internet and cable provider to keep their business at No.1 to be searched with and ads. That will take a huge chunk out of profits for them, probably more than they can get away with with passing the buck to their consumers to pay for.

  • Andrew Sharrow

    Perhaps it’s just me, but the first thing i thought when I heard about this was the possibility to buy data at wholesale prices. So Ford (as an example) can pay for me to see their ad bandwidth-cap free. But does this open up a loophole where I could I pay for some third-party service (lets call it X Co.) that would then pay ATT for ALL of my bandwidth usage, and then bill me at the end of the month for what I actually used? ATT would have to give X Co. the same rates as they’re giving Ford to stay clear of anti-competitive practices. And I can’t imagine they’re going to charge Ford the exorbitant rates we pleebs pay.

  • Smeckle

    I cannot wait to CONSUME all that productivity and infotainment content!

    /s

  • drathos

    “.. and that the program is meant only to line our pockets.”

    FTFY!

  • MistaButters

    Wait? So this could make it so say Facebook could pay AT&T some amount of money and I wouldn’t be charged with data when I visited facebook? (just an example). I think AT&T is going to get away with this fine.

    • Mike

      Yup. Wouldn’t count against your cap. Sadly, I think that it is likely legal, but at the same time I think that it’s a horrible precedent and could very well break the internet as we know it. I would love to see some neutrality laws put into place to prevent this.

  • FknTwizted

    what i find interesting is that all these internet companies (Land and wireless) are starting to nerf the amount of net access you can have and try to charge you in a tier structure. Yet everybody (xbox, sony, google, microsoft, i could go on for days) is pressing end users to use cloud based or digital download… anybody feel like a global conspiracy unfolding to pinch every last fricken penny out of consumers hands.

    • Bald_Sasquach

      It’s not even a conspiracy, they all want that future right now, they just have to wait for the whole industry to shift so they don’t look like that one evil company first. This is AT&T saying screw it, let’s speed this up!

    • Benjamin Reyes

      No different than Verizon giving us unlimited data telling us how we should use all these great apps and internet as much as we want “its unlimited” and then when they got there smartphone percentage up nice and high “gotcha bitch”! You want a new phone sign a contract, you want unlimited data pay full price for your device oh data that’s not unlimited. You want the internet f u pay me you want apps and data f u pay me you want you tube f u pay me.

  • overclock

    We are bombarded with advertisements all the time. Even DL is full of them. I searched for a retractable badge holder yesterday on Amazon and lo and behold today on DL there’s an advertisement for retractable badge holders on DL. Now I wish that amazon’s search was as good as their ads but that’s a different post. And what about the company a long time ago that let people place free long distance phone calls if you listened to an advertisement first? And google and microsoft provide “free” email but they serve up customized ads based on keyword searches. There’s some things that need to be clarified but advertising is a fact of life that we will never escape. Even my local school district wants to put up a video scoreboard with corporate sponsorships paying for it. Everybody likes free stuff until they figure out it really isn’t free.

    • FknTwizted

      Free is never Free.

      • BetterWithRoot

        Free…as in beer?

        • FknTwizted

          what? If you were trying to be funny you fail miserably.

          • BetterWithRoot

            Thank you.

  • John Davids

    Did we really need another reason to hate this company? Mr. Legere is going to have a field day with this.

  • Kiril Vatev

    Did anyone actually believe that AT&T would say “Our bad, you guys are totally right” and stop this? Or course they don’t believe they are violating anything.

  • jimt

    We can all vote for AT&Ts plan by switching to Tmo!

  • Patrick Crumpler

    Petition. Move-on.org or the White House.

  • Fresh360

    I wrote this elaborate Car/Gas as Phone/Data analogy but in laymans terms this is just bad, bad, bad…

  • Philip J. Fry

    What a horrible idea. I see a lot of rich people getting even richer because of this.

  • http://techonblogger.ward.pro/ Stynkfysh

    So people have to pay to visit my website, but can visit Facebook for free. Doesn’t seem neutral at all.

    • sirmeili

      Technically what they are saying is that everyone pays to see all websites (bandwidth)….just in this case Facebook pays that fee for he bandwidth you use when visiting their site.

      Not saying I like it, cause I don’t. It just gives big companies the advantage. If Facebook were to do this, there is no way a startup could compete because they likely wouldn’t have the funds to prepay for everyone’s mobile usage.

      • http://techonblogger.ward.pro/ Stynkfysh

        Oh, I understand what they are saying. But what if the person has hit their data cap? Data to the little guy stops. But going to what you are saying, giving the big companies the advantage means it is not net neutral, right?

        The wireless industry makes me sick. They confuse people, treating them like sheep (and it works, sadly). Their day will come when they have to adjust their practices – and their stock prices will fall and the executives at that time will lose millions. For now, I am happy I jumped to T-Mobile. Their service may not be as good in outlying areas, but at least I am not feeding as extreme of manipulators.

        • sirmeili

          “Oh, I understand what they are saying. But what if the person has hit their data cap? Data to the little guy stops. But going to what you are saying, giving the big companies the advantage means it is not net neutral, right?”

          The thing is, that data doesn’t stop when you hit your cap on mobile services. They merely charge you more….so in this case, the “big companies” are paying for that overage charge (not really since they just pay for the data you use and it never counts towards your cap).

          Note that I’m not in favor of this, I think they are trying to skirt net neutrality and the end goal is the same for them. They could at some point say “all phones only get 10mb of data, and each additional 10mb is $100, unless it’s sponsored, then it’s free!” (yes I realize that 10mb is an extreme example).

  • John Hegberg

    Not thrilled about this. I could see long run, data prices going up even higher so that you select lower data plans, but it’s okay because you can access the sponsored stuff for free!

    • Big_EZ

      This was my thought exactly. Here save money with this 500 mb plan because you can use all of these apps and Web pages for free (not free, but for the low, low price of just your soul, lol)

      • FreedomForAll

        And those companies that are going to be paying out the wazzoo to ATT, VZW, and so on will Pass the Buck to the Customers in the long run.

        • Big_EZ

          Most consumers are to stupid to realize that everything is passed on to the consumers. Many people want higher taxes for businesses, this drives nails into the coffins of small businesses, and big business just passes on the burden to the consumers with increasing prices.

          What this will end up doing is shoehorning consumers to specific apps and pages. Once your using their services over the smaller guys, they make their money back by ads, micro transactions, subscriptions, etc. It’s not just free for the consumers, It’s buying your business away from the guy offering a better product(potentially), but with less capital to promote it. This would be fine if it stops at free data when you use sponsored data apps/websites, but it won’t be long before the “sponsors” get preferential treatment.

    • FknTwizted

      crap i have been barking about how eventually you could subscribe to a pre-call advertising plan for a cheaper rate.

  • C-Law

    After this I see net neutrality ending and slowly comes the end of the glory days of the internet bc there’s too much apathy towards standing up to these companies. The data caps should be raised much higher or removed imho. I wrote my congressmen about net neutrality and the only one that responded said he was in favor of Verizon and agreed with them that it should end. I made a note not to vote for him when he’s up for reelection

    • Adrynalyne

      Who is he so others can not vote for him too?

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      • C-Law

        Ted Poe

    • Daryel Villavicencio

      Most Congressmen don’t understand net neutrality. They rely on lobbyists (i.e. Corporate interests) to “educate” them. The lobbyist dropping the most Benjamins gets the favor of the Congressman.

      • Cowboydroid

        Most voters don’t understand issues. They rely on commercials and ads (i.e. special interests) to “educate” them. The commercial or ad dropping the most persuasive PR gets the favor of the voters.

        The problem isn’t special interests. The problem is government having any power at all to legislate on the economy. That’s how it gets captured by special interests. A government that can legislate on the economy requires an unrealistically highly educated electorate that understands economics fully in order to hold its representatives responsible for the economic legislation it makes. That simply isn’t reality. So what we get instead is the persistent lobbying of special interests in favor of protectionism legislation that heaps cost and risk on the taxpayers, who are simply uninterested enough to understand how these costs and risks affect them and the broader economy.

        The solution is to end protectionism. End the government’s power to regulate the economy, and watch the corruption associated with corporate lobbying disappear along with it.

        • Bald_Sasquach

          While I agree that the electorate can’t fully understand who to elect to govern what parts of the economy, it’s a pretty massive step to say “therefore the government should hand in the towel.” Without any oversight, there is zero reason these companies wouldn’t form super monopolies and charge whatever they want for whatever product costs the least amount of money to make. I don’t know about you, but I don’t want to buy unregulated products or work for an unregulated employer. Have you not noticed how even with current regulation, most huge companies look for loopholes and unregualted countries to suck money out of?

          • Big_EZ

            Most current regulation is to help big business and crush small business. We need regulation, but it needs to be minimal and not in favor of big business.

          • Cowboydroid

            If government has proven to only fail after centuries and centuries of effort to make it work, why keep trying to make it work? What was it Einstein said about insanity…

            Why does “oversight” need to come from a small, elite group of disinterested bureaucrats prone to corruption?

            It sounds like you’re arguing against the system we already have, not free markets. These companies ARE forming super monopolies and charging whatever they want for whatever product costs the least amount of money to make. And they’re doing it with MASSIVE amounts of regulation that serve to suppress competition, not hold them in check.

            You understand that monopolies aren’t a product of the market, right? They are a product of government privilege. In a free market, companies would not be able to suppress competition to the extent required to monopolize an industry. ATT is a prime example of this, owing its early monopolist efforts entirely to government privilege, after which the government was the only entity capable of breaking them up. Prior to ATT’s government privilege, there was a massive amount of competition in the telecom industry.

            I don’t know about you, but I don’t want to buy regulated products or work for a regulated employer if this is the result of regulation.

          • Andrew T Roach

            How are the bureaucrats disinterested when corporate interests pay for 100% of their campaign? They dont work against corporate interests, they work FOR corporate interests.

          • Cowboydroid

            That’s precisely what I’m arguing. And how on earth do you propose to alter this relationship?

          • Andrew T Roach

            The state of Washington pays Boeing to stay with tax dollars and encourages unions to give up their benefits for the “good of the state”. That’s a fact. Corruption at its finest

        • http://techonblogger.ward.pro/ Stynkfysh

          Seriously? EVERY company’s wet dream is a monopoly. Unfettered, we would be full of them. And given the size of the markets today, companies don’t need a strict monopoly to function outside of natural market forces.

          • Cowboydroid

            Yes, that is their dream. But the only mechanism they have of attaining it is by fiat. They cannot suppress competition in the market without the help of government. The only method they have in a free market of besting their competition is by offering a better product for less cost. Anything else requires the help of government.

            Fettered, we ARE full of monopolies.

          • Andrew T Roach

            Youre wrong buddy. Corporate interests can and do cooperate in a free market to fix prices when theyre are few enough options.

          • Cowboydroid

            Sorry, but you’re wrong. Corporate interests do not exist in a free market, because corporations do not exist in a free market.

            As you say though, oligopolies can only fix prices when there are “few enough options.” And the mechanism that restricts options is government privilege….the very same entity that engages in price fixing itself.

        • FreeForAll

          Ending regulation is what caused the collapse in 2008. I Don’t Think Ending Regulation is the answer, we need more regulations to keep these bastards in check. They care nothing about anyone but themselves, corporations don’t care how much they hurt the citizens as long as they are raking in hand over fist, which they already are doing. They are no where near hurting for money. This is about control and monopolization.

          • Cowboydroid

            Wrong. Ending regulation is not what caused the collapse of 2008. But that is a very large and involved topic that probably isn’t appropriately discussed in this comments section.

            These bastards are operating on government privilege. They CRAVE regulation in order to suppress competition. They are the ones writing the regulations being passed by politicians!

            Sorry, your method is simply not working. But you’re right, it IS about control and monopolization. Corporations and government work hand in hand to accomplish both.

        • tkx-421

          Another Corporate Stooge, drinking the Kool-Aid of the Tea Party, which was started and Financed by the Koch Brothers who could care less about anything except their money, influence and power.

        • Andrew T Roach

          I got two words for you. Inverted Totalitarianism. Read about it. What you don’t understand about the free market is that these large industries with only a few players cooperate to fix prices and regulations. Its a corporate Oligopoly. The government is virtually no hindrance because Government is bought and paid for by corporate interests already and is completely ineffective at keeping anyone in check. It exists to serve the corporate interests that finance every political campaign.

          • Cowboydroid

            What you don’t understand about markets is that the markets are restricted to just a few players by the very entity that you claim is necessary to protect us from the moral hazard exhibited by big corporate interests. It’s corporate oligopoly. The government is entire necessary to the creation of oligopolies. The government is “ineffective” at holding anyone in check (except new competition) because it has absolutely NO interest in holding anyone in check (except new competition).

            Yes, exactly, it exists to serve the corporate interests that finance political campaigns. And why do corporate interests finance political campaigns? Because the government has the power to create rules to restrict competition and hand out subsidies and write legislation favoring certain industries and players in those industries.

            Remove that power, and watch corporate lobbying dry up.

            Read some Marx? WTF? Am I being trolled?

    • Cowboydroid

      Vote with your wallet. Move to T-Mo or Sprint.

      • Adrynalyne

        Net neutrality is bigger than any one company.

        • Cowboydroid

          If ATT is the only company doing this, and they lose business due to it, and other companies that don’t do it gain more business, then it stands to reason that ATT will eventually stop doing it.

          • Adrynalyne

            Yeah but really, will ATT even feel the sting? As you said, most voters don’t understand the issues. We might, but we are so far in the minority that we wouldn’t even make a dent.

          • FknTwizted

            a forest fire can be started with just one match.

          • Adrynalyne

            While a clever saying, its not really accurate to the situation. Most people will ever even know about what ATT is doing.

          • FknTwizted

            unless you start making it known, your right they wont. But with the public’s apathy of it (ads in youtube, google, bing, tv, hulu, etc) they will just accept it and move on. Most people didn’t know that cable used to sell their service as the “commercial free” tv and you paid a premium for it… now your still paying premium and have ads every fricken sec while watch nothing but trash on tv. My concerned is it turning into lack of a better example the movie “Idiocracy”.

          • Adrynalyne

            How does a small minority leaving ATT make it known, though? I don’t know what the answer is on raising awareness, but I don’t think thats it. I mean, by all means leave ATT on principle alone, but past that…

          • Andrew T Roach

            Thinking like that will keep Repulicans/Democratic (same) party in office for 1000 years.

          • Adrynalyne

            No, a two party system will.

          • Mike

            Most of AT&T’s customers are in contracts, and while T-Mobile is making it compelling to leave, it still can be a fairly big hurdle to overcome. So people might not be able to vote with their wallets until it’s too late.

            That’s the reason I went MVNO; Verizon made a decision to make the network suck at my house and decided to do nothing about it, but I was locked into an onerous contract and had no freedom to exercise a right to choose. Had to wait it out until it was economically feasible to do so.

      • Eric R.

        Tmobile really isn’t that much cheaper

        • 7h3_4pp12en7ic3

          You miss the point. It’s not the saving of money, its taking your money elsewhere.

        • Cowboydroid

          It really is. Especially if you value unlimited data without restrictions.

      • FknTwizted

        unfortunately neither of them are in my area or even near my state.

  • bd1212

    All I heard from that video was ads, ads, ads, advertising solutions, blah blah, more ways to view ads. This is a horrible idea… can’t believe AT&T is trying to make this out to be a good thing.

  • Scott Webber

    Net Neutrality should be the law. It’s not rocket science: Pay your ISP an agreed upon rate for the amount of data you send and receive. Period. The person on the other end of the transfer pays their ISP.