Does it ever bother you that you have to pay for the bandwidth that companies are using to show you advertising? How about the fact that you have to pay for a PDF policy download from your insurance company? AT&T is hoping to make those bits of your data cap (or overage charge, as it may be) disappear. Today the wireless provider is accepting applications from other companies that wish to sponsor data.

sponsored data

Here's how it works: you're browsing the web and you come across a video ad for, say, a new flavor of Coke. Being the data-savvy customer that you are, you don't open the video, because it will just eat into your data cap. But if you see the AT&T Sponsored Data logo, you'll know that watching the video won't affect your metered AT&T data. The company sponsoring the ad (or web page, or app, or document, et cetera) is paying AT&T an extra fee to make sure you can access that content without worrying about the data charges.

This can be taken two ways. On the surface it's a great way for advertisers or service companies to promote their products - a savvy wireless customer is more likely to watch a video or download an app if they know it's "free," at least in the sense that they won't be paying any extra. On the other hand, this comes dangerously close to "paid prioritization," giving certain data and services priority over other traffic for a paid fee. This isn't really the classic example of prioritized traffic from a service provider, but by giving end-users a monetary incentive to consume one company's product over another, AT&T is basically doing the same thing. The only difference is that they're using money instead of technology. 

In the US, the Federal Communications Commission prohibits paid prioritization or "data discrimination" except for "reasonable traffic management." Classically that means that they're not allowed to block legally-accessible content or give one company priority over another on the network. And again, that's not really what AT&T is doing here - they're offering some companies the ability to give potential customers a pass on the data they would otherwise be charged for. In any case, the FCC allows data discrimination on wireless networks as an exemption to its current net neutrality policy.

So this is perfectly legal. Is it ethical? They're trading money for a legitimately useful service, and it's something that will not affect end users, at least initially. But consider the implications: if you were promised that using HBO Go on your AT&T wireless connection wouldn't count against your data cap, while using Netflix would, which premium movie service would you be more likely to purchase? (HBO partners with AT&T through the U-verse cable system, by the way.) More importantly, which one would AT&T rather you use: the one that they get a cut from on your cable bill, or the one that you watch over their cable Internet at no additional charge? This is exactly the kind of scenario that observers were afraid of when the big American cellular providers got rid of unlimited data plans.

At the moment AT&T is using more innocuous examples to promote the upcoming sponsored data feature, like healthcare wellness videos, movie trailers, private shopping apps, and employees using their company's app for free. If AT&T (or other providers) use their position to try and steer business and money towards themselves or their partners, they'll quickly earn the ire of consumer and technology watchdogs.

AT&T hasn't said when their sponsored data program will begin, but it will only be available to standard post-paid customers with an LTE data plan - no pre-payers need apply. The company is currently accepting applications from potential sponsors at the email address below.

Source: AT&T

AT&T* today unveiled a new way for eligible 4G customers1 to enjoy mobile content and apps over AT&T’s wireless network without impacting their monthly wireless data plan.  Similar to 1-800 phone numbers or free shipping for internet commerce, AT&T’s new ‘Sponsored Data’ service opens up new data use options for AT&T wireless customers and customer-friendly mobile broadband channels to businesses that choose to participate as sponsors.

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.

The Sponsored Data service allows sponsors across a variety of industries such as healthcare, retail, media and entertainment and financial services with the opportunity to better engage with customers and their own employees.  This exciting new service offers data sponsors many potential innovative uses such as:

  • Encouraging customers to try a new smartphone or tablet app.
  • Promoting movie trailers or games.
  • Providing patient healthcare support via wellness videos.
  • Encouraging customers to browse mobile shopping sites.
  • Allowing businesses with ‘Bring Your Own Device’ policies to pay for the data employees use for specific business-related apps and services.
  • Enhancing customer loyalty programs by providing sponsored data access to products and services.

“Customers love mobile content. Whether it’s shopping, banking, entertainment or personal wellness, mobile content is increasingly available for customers almost anywhere and anytime.   And that’s what makes this a win-win for customers and businesses – customers just look for the Sponsored Data icon and they know the data related to that particular application or video is provided as a part of their monthly service,” said Ralph de la Vega, president and CEO, AT&T Mobility.  “This is an exciting new opportunity for us and, most importantly, our customers.” 

Content providers and other businesses can use this innovative network solution with existing mobile websites and applications. The service is easily integrated into existing platforms and services and will be available across many mobile devices and operating systems.  Additionally, the unique developer portal website includes intuitive features which allow sponsors to manage their offers, check billing and measure impact of offers using a robust analytics engine.

Mobile data traffic on AT&T’s network increased more than 30,000% over the last six years2 and is expected to continue growing. Providing data via AT&T’s Sponsored Data service gives companies an effective way to reach consumers and expand engagement in the growing, mobile-centric landscape. 

“As content consumption has evolved from analog to digital, so have the ways for companies to reach consumers,” said Andy Geisse, CEO, AT&T Business Solutions.  “The Sponsored Data model is just one way we’re helping companies tap into our network to offer differentiated experiences and transform the way they do business.”

To find out more and apply for access to the service, developers can go to att.com/sponsoreddata. Businesses interested in learning more should contact their account rep or [email protected].

Michael Crider
Michael is a native Texan and a former graphic designer. He's been covering technology in general and Android in particular since 2011. His interests include folk music, football, science fiction, and salsa verde, in no particular order.

  • http://www.androidpolice.com/ David Ruddock

    This + video or music streaming partners = win.

    • UniBroW

      It's actually the opposite of a win, for us the Customers.

      • tr_blig

        yeah this is a terrible idea, I want every single bit that I stream to count against my data cap. what??

        • UniBroW

          No, data caps are bad. This is not the solution. You're also quite naive if you think you're not paying for that data anyway. Cost of providing a service goes up, cost of service goes up. it will ALWAYS trickle down to the customer in the end but with this you have less choice because if a provider doesn't play ball (which they shouldn't) you have to either not use that service on a network you pay to utilize or have to pay for overages if you're outside your monthly allotment.

          Seriously, I can't imagine having to worry about data. I realize, t-mobile and sprint aren't options for everyone but if you're in an area that gets good service from either provider you owe it to yourself to try either out. I can't believe how good t-mobile has been for me on Long island, is it perfect? no, but neither is any of the carriers. If i travel somewhere where I get poor t-mobile I can just swap in a at&t pre-paid sim and be done with it.

        • nehpets

          Which data would you like to be "free"? Let's assume (hypothetically, as David proposes) that Netflix becomes "free" using a system like this on ATT, who do you think will be paying for that service? I can assure you that Netflix would not be providing "free" streaming to ATT customers it out of the goodness of their heart.

          Edit: as UniBroW points out, data caps are evil. They are the start of this slippery slope into paying for each and every website or package of websites on the internet (think: cable subscription).

          • http://www.androidpolice.com/ Shawn De Cesari

            The cost of a Netflix subscription would go up a buck a month to cover the additional cost. Simple as that.

          • UniBroW

            So who pays for that? Is my subscription going to be increased now because I need to subsidize AT&T users streaming because of their poor data plans? If so, I'd cancel. Even if it's a penny, it's out of principal.

            Why did AT&T and Verizon take away unlimited data again??? someone remind me....

    • challenge_accepted

      Win for the big cash cows like apple Google but loss for Pandora Spotify cause they can't pay

      • UniBroW

        If Google backed this with play music all access, I would heavily consider dropping my subscription as much as I absolutely love their service. I would wager to say, so long as it's solely up to me, I'd drop any service provider that signed on to this.

        I don't suspect that Google would back such a thing, but time will tell.

        • mgamerz

          Not sure, after that reversal backing Verizon on Net Neutrality (or against it, I guess I should say), it wouldn't surprise me...

          • UniBroW

            well, it certainly wouldn't be very "googley" of them now would it?

        • Gabernasher

          So you want your stuff to eat your data?

  • AndroidUser00110001

    Ha...cell phone companies and ethics. They do what they please and get away with it. Example...Verizon and Nexus 7.

    • http://www.androidpolice.com/ Shawn De Cesari

      What's the problem? Verizon doesn't block the Nexus 7 from their network. If you put an active SIM card in it, it works with no problem at all. Getting an new SIM card for one is still a bit of an issue, but it's pretty easy to work around it.

      • UniBroW

        you pretty much just stated the issue, just because there's a workaround doesn't mean it's not an issue. That workaround, as easy as it is, is for people that read sites like this and us 'diehard' android fans. That's not going to work for your average Joe

        • http://www.androidpolice.com/ Shawn De Cesari

          Well, considering that Verizon compatibility is basically removed from 100% of Nexus 7 promotional materials, most "average Joes" probably have no idea that the N7 works on Verizon in the first place. Did you notice how after the press conference where the N7 was announced, Google never made another peep about Verizon?

          • UniBroW

            And there's part of the problem

      • Barnassey

        Downvoted for the sheer amount of logical disconnect you just had.

    • KlausWillSeeYouNow

      Ahem... Speak for yourself. I have T-Mobile.

  • http://www.imnuts.org/ Mark

    So, AT&T is essentially getting paid twice for the same chunk of data, and odds are, the consumer is paying the larger portion.

  • mercado79

    I absolutely see the danger in this (talk about slippery slope), but damn... this is brilliant for the carriers.

  • mgamerz

    What an excellent idea to shut down competition (of startups who can't afford to go against rich companies). Well done AT&T, I expected nothing less.

    • Gabernasher

      If anything this can help the small companies, if the big ones don't eat your data, use it on other things.

  • Ray Sunghwa Woo

    Ever since I switched over to Tmobile, I have no worries about data usage. No Ad, no limit, no outrageous price. I think AT&T is the second best carrier after Tmobile right now (at least for me). Verizon is just too greedy, expensive. Sprint has no data coverage.

  • james kendall

    So much for network neutrality. oh wait the FCC drooped the ball on that and did not apply it to the cell companies.