Commentary

FCC Urged To Probe AT&T's Toll-Free Data Plan

The Federal Communications Commission should open an investigation into AT&T's new “sponsored data” offering, advocacy group Public Knowledge said today.

“I urge you to .. open a proceeding into AT&T’s sponsored data scheme,” acting co-president Michael Weinberg writes in a letter to FCC Chairman Tom Wheeler. “Gather the information required to evaluate if the scheme interferes with the operation of the internet, if it is or has the potential to be an anticompetitive practice, or if it creates an opportunity for preferential treatment. If you find that the scheme does any of these things follow through on your stated intent and intervene on behalf of the public interest.”

AT&T's new “sponsored data” feature allows companies to pay for their material to be exempted from consumers' data caps. The feature will allow wireless users with 4G service to stream content from companies that pay an extra fee to AT&T, without worrying about whether that data is burning through their monthly allotment.

Three companies have already signed with AT&T for the feature -- ad tech firm Aquto, app developer and m-commerce software provider Kony Solutions, and health care company UnitedHealth Group. But AT&T probably intends to add more companies to the plan; last year, reports surfaced that ESPN was in talks with carriers about participating in this kind of arrangement.

Advocacy groups like Public Knowledge quickly warned that AT&T's plan will harm startups that can't afford to pay for the data-cap exemption. Advocates also say the plan calls into question AT&T's justification for data caps. “Caps are supposed to help wireless carriers manage congestion. But if getting a big check from another company suddenly makes AT&T’s congestion concerns go away, that shows data caps aren't necessary in the first place,” policy director Matt Wood said on Monday in a statement.

Weinberg's letter to Wheeler comes one day after the FCC Chairman publicly addressed AT&T's plan. “My attitude is: let's take a look at what this is, let's take a look at how it operates,” Wheeler reportedly said on Wednesday at the Consumer Electronics Show. He added that if the feature “develops into an anticompetitive practice” or leads to “preferential treatment,” the FCC might intervene.

Those remarks are hardly a criticism of the program. Still, advocates are taking the comments as encouraging; Weinberg specifically writes that he is “delighted” by Wheeler's attitude.

Weinberg also renews a Public Knowledge's longstanding request that the FCC investigate data caps more broadly. “By opening a thorough investigation into AT&T’s scheme, you make it clear to AT&T and all other ISPs that the FCC takes its commitment to an open internet seriously,” Weinberg writes. “And by taking steps to gather information about data caps industry wide, you can prepare the FCC to respond to potential threats in the future.”

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