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AT&T's 'Sponsored Data' Lets Advertisers Foot the Bill

 & Sascha Segan Former Lead Analyst, Mobile

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LAS VEGAS–AT&T today announced Sponsored Data, a way for companies to pre-pay for the data AT&T customers use to access their services, putting those services outside subscribers' data caps.

And while AT&T and its corporate customers say that this will offer new options for companies to reach AT&T subscribers, consumer advocates are worried that it'll make firms that don't do deals with AT&T second-class citizens.

"It's going to provide fantastic benefits for companies who work with us and our mutual customers," AT&T senior executive vice president John Donovan said at an AT&T developer event in advance of CES today. "Similar to a 1-800 phone number, or free shipping for Internet commerce, AT&T's new sponsored data service opens up new data use options to businesses that choose to participate as sponsors."

Sponsored data and non-sponsored data will be delivered with the same speed and quality of service, Donovan assured us; the only difference will be who's paying.

Donovan brought out some companies that work with AT&T and plan to use sponsored data. Bud Flagstad of United Health Group, for instance, said it'll be used to push health data and suggestions to UHC consumers for free.

Suzie Kim Riley from Aquto had a more radical thought. Her company turns mobile-data megabytes into a currency, so people can get additional data on their monthly service plans by signing up for offers or buying stuff online.

"Mobile data as a reward actually works very well," she said. "We've basically turned megabytes into a form of currency."

Sponsored data is "coming soon" to AT&T LTE subscribers, the carrier says.

So What's The Catch?
One problem with Sponsored Data, consumer advocates say, is that it creates a two-tier Internet. This is separate from the legal concept of net neutrality; according to the FCC, net neutrality only applies on mobile networks if carriers are actually blocking some services.

If large content providers can evade AT&T's data caps, Public Knowledge says, people won't want to use smaller services, as they'll be more expensive. That tilts the Internet playing field towards the content companies that want to work with AT&T - probably the deeper-pocketed ones, meaning it's less likely that small new mobile services will become popular.

Free Press, another similar consumer advocacy organization, says sponsored data is basically a way for carriers to double-charge both content providers and users for the same data transfer.

"While sponsored data will be pitched as a way to save customers money, it's really just double charging," Free Press policy director Matt Wood said in a statement. "The customer is still paying for the connection, and won't get a refund just because Facebook or YouTube or ESPN are also paying for some data usage now."

About Our Expert

Sascha Segan

Sascha Segan

Former Lead Analyst, Mobile

My Experience

I'm that 5G guy. I've actually been here for every "G." I reviewed well over a thousand products during 18 years working full-time at PCMag.com, including every generation of the iPhone and the Samsung Galaxy S. I also wrote a weekly newsletter, Fully Mobilized, where I obsessed about phones and networks.

My Areas of Expertise

  • US and Canadian mobile networks
  • Mobile phones released in the US
  • iPads, Android tablets, and ebook readers
  • Mobile hotspots
  • Big data features such as Fastest Mobile Networks and Best Work-From-Home Cities

The Technology I Use

Being cross-platform is critical for someone in my position. In the US, the mobile world is split pretty cleanly between iOS and Android. So I think it's really important to have Apple, Android and Windows devices all in my daily orbit.

I use a Lenovo ThinkPad Carbon X1 for work and a 2021 Apple MacBook Pro for personal use. My current phone is a Samsung Galaxy S21 Ultra, although I'm probably going to move to an Android foldable. Most of my writing is either in Microsoft OneNote or a free notepad app called Notepad++. Number crunching, which I do often for those big data stories, is via Microsoft Excel, DataGrip for MySQL, and Tableau.

In terms of apps and cloud services, I use both Google Drive and Microsoft OneDrive heavily, although I also have iCloud because of the three Macs and three iPads in our house. I subscribe to way too many streaming services. 

My primary tablet is a 12.9-inch, 2020-model Apple iPad Pro. When I want to read a book, I've got a 2018-model flat-front Amazon Kindle Paperwhite. My home smart speakers run Google Home, and I watch a TCL Roku TV. And Verizon Fios keeps me connected at home.

My first computer was an Atari 800 and my first cell phone was a Qualcomm Thin Phone. I still have very fond feelings about both of them.

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