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AT&T "Sponsored Data" lets content creators pay for your data usage

News by Andrew Kameka on Monday January 06, 2014.

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Sponsored links, if any, appear in green.

AT&T has a bold but unnerving new program that will offer consumers a chance to consume more data without having to worry about going over their monthly data allowance. How? By having the people who make the content you download foot the bill.

AT&T's new "Sponsored Data" program would call on content creators - such as the companies producing the advertisements, photos, videos, and apps consumers download - to subsidize data usage. Though no major companies were announced as participating, an example of the system would be for Netflix to pay AT&T X amount of dollars for Y amount of traffic that would be divided among its customers. That would encourage Netflix subscribers to keep watching videos instead of stopping because of data concerns. Another, and far more likely, scenario is that a movie company would pay to have its movie trailers not count as part of data usage.

It's "Similar to a 1-800 phone number or free shipping," according to John Donovan, senior executive VP of AT&T Technology and Network Operations. Donovan frames it as a function that typically costs money but businesses pay to attract customers. The premise might create some uneasiness because it would create benefits for more companies rather than having an even playing field. AT&T says it will not prioritize data for companies that pay, but an outsider can see that it would encourage a company with deeper pockets to have an advantage over startups and competitors. If Spotify pays to let customers use AT&T without data limits, could Rdio or Rhapsody do the same to keep up?

Three companies have signed on already to participate in sponsoring data usage on AT&T: Aquto, an ad agency; Kony Solutions, an app developer; and UnitedHealth Group, a health provider. More information is available at AT&T's Sponsored Data landing page.

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Andrew Kameka
Andrew is based in Miami, Florida.

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