AT&T's Sponsored Data plan could be anticompetitive says FCC chief Wheeler

AT&T's Sponsored Data plan could be anticompetitive says FCC chief Wheeler
The other day, AT&T announced its "Sponsored Data" plan. Quite simply, this is a plan where content providers would pay for the data used by phone owners. Take an app that is a real data hog. Hmmm...how about Netflix? Instead of watching the streaming video site wipe out your data allowance each month, the company would in essence, be paying AT&T for the data you consumed watching Orange is the New Black or any other Netflix video.

Before you get charged up offer this idea, we need to point a few things out. First of all, if you have Wi-Fi at home, use it. Check for a Wi-Fi connection wherever you go. You will be surprised at the places you visit that have it available, like McDonald's for instance. But we digress. The real reason not to get terribly stoked about AT&T's plan is because of three letters: FCC.

The chairman of the FCC, Tom Wheeler, told a crowd at CES on Wednesday that the plan could be anticompetitive, favoring apps that have a lot of money behind it to pay for the data used by consumers. Wheeler said that the FCC is pro-innovation and pro-competition. Still, when it comes to AT&T's Sponsored Data Plan, Wheeler said that his agency is ready to intervene if it proves to un-level the playing field.


Other areas of discussion at CES included the FCC's decision to seek comments from the public on the plan to allow phone calls on flights. Wheeler would like to see a ban on calls, but not on use of the internet during flights. Not that he is worried about planes falling out of the sky because passengers are playing Words with Friends 30,000 feet in the air. His concern is that with passengers allowed to make calls on their phone, an airplane would become too noisy for those passengers looking to relax or sleep during a flight.

Wheeler also touched on the  upcoming spectrum auctions being held by the FCC. The agency is trying to get television broadcasters to sell off to the government the spectrum they own, so that it can be included as part of the spectrum being auctioned of to mobile operators.

source: TheVerge

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6 Comments

1. TheRetroReplay

Posts: 256; Member since: Mar 20, 2012

So it's not enough for AT&T to charge you for data, they want to charge the online services you already pay for to make them pay for the data you use which would make them raise their prices to cover the hit that they would take from AT&T charging them.

3. tacarat

Posts: 851; Member since: Apr 22, 2013

So you've never called a toll free number? "In the old days" a long distance call out of state on a land line cost you per minute. Companies would cover that cost with a toll free number as a way to get your business. There's nothing new to this other than it's for wireless data. The rub will be for data intensive services like video and streaming. It would be a good way to help convert free customers to paying, though. That's something that a lot of companies haven't figured out yet.

4. TheRetroReplay

Posts: 256; Member since: Mar 20, 2012

Your analogy is wrong, let's say I have AT&T's service, I call their toll free number from my land line, AT&T covers that cost for me calling them. Or even if I don't have their and I call their toll free number to inquire and possibly set up service, then I can see them covering the cost because they want my business. Here's where your analogy is wrong, if I have AT&T and I use Netflix a streaming service I already pay for, AT&T is going to dip into the pockets of Netflix to cover that cost. Now Netflix is making less money because AT&T is dipping into their pockets so, then Netflix raises their prices for everyone, even those not on AT&T would be covering the cost of those on AT&T. Companies covering those long distance charges with toll free number is because you A) are already paying them for a service or B) you plan to pay them for a service shortly. So you'll be paying them back for that cost. In this case, AT&T already has their hand in your pocket because you're paying them for wireless service as does Netflix as you're paying them for streaming service. But now AT&T plans to dip their hand into Netflix's pocket as well. I don't have AT&T for a wireless carrier, I have Verizon, but I don't want the cost of my Netfilix to go up because people are streaming over AT&T's network and they're dipping into Netflix's pocket to cover that cost. Nor do I want to see ads in Netflix, I am paying them for ad free content and I should get ad free content. This is the data cap thing all over again, AT&T did it, then Verizon did it and then all the home ISPs started doing it because they saw profits in overages and while they capped your data, they still had the balls to charge you the same amount they were charging you for unlimited.

5. tacarat

Posts: 851; Member since: Apr 22, 2013

Well, if you called Netflix at their toll free number, Netflix pays for your call. They also pay for our DVD return postage. I think my analogy holds up. There are some net neutrality concerns and I think that's where you're coming from. I love net neutrality, but I'm not sure it applies in this case. This isn't the same as degrading or preferring one customer/business over another. It's about a cost that somebody has to pay for and who will. I'll try to have a better analogy after some sleep.

6. TheRetroReplay

Posts: 256; Member since: Mar 20, 2012

Again, if I called Netflix's toll free number, they should be picking up that tab because I am paying them already and they should pay for the return postage because once again I am paying them for their services. My point is, people on AT&T who are going to go onto this sponsored data plan are going to raise my Netflix cost so that Netflix and foot the bill for that data. As a Verizon customer, I don't think I should be paying for something being done by AT&T and their customers. Even if all mobile companies did this, Netflix would raise their prices to cover the cost of the data. That would mean that people who only use Netflix at their home and don't have smartphones to watch Netflix on would be affected and they would paying a higher cost for all those people watching Netflix through a sponsored data plan. But then look at what could happen, lets say that AT&T started charging all manner of websites, sites that were once free to go to are either posting more ads or charging membership fees for "premium content" yeah we see that now, but if AT&T starts dipping into those pockets, it'll get worse. These sponsored data plans are AT&T's way of getting around net neutrality. If they can't charge their customers for going to certain sites or using certain online services, they'll go after those services for the money instead.

2. Augustine

Posts: 1043; Member since: Sep 28, 2013

How are airplanes from trains or buses? Do people yap on their phones all the time in long rides in these other means of transportation? Not in my experience. People are not all jerks, only very few, but this is not a good reason to make life worse for all those who aren't.

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