Verizon Rolls Out Toll-Free Data

Verizon is joining rival mobile carrier AT&T in rolling out "toll-free" data, which enables content companies to pay for their data to be exempted from subscribers' caps.

One version of Verizon's new FreeBee Data will let companies arrange for their mobile content to be zero-rated -- meaning it won't count against people's data caps. That program is available as of today.

A second version of the program, set to launch next week, will allow companies to sponsor some offerings -- including 30-second streaming videos, 30-minute audio streams and app downloads -- on a cost-per-click basis. Hearst Magazines, AOL and Gameday have signed up for that iteration of the program.

Verizon's move comes more than one year after the company urged the Federal Communications Commission to endorse the idea that broadband providers can offer sponsored data.



“Sponsored data and other arrangements that only address pricing and that do not result in the differential treatment of traffic should be presumed reasonable given the potential consumer benefits,” Verizon said in a December 2014 FCC filing.

AT&T pioneered toll-free data for smartphones in 2014, when the company began allowing companies including ad-tech firm Aquto, app developer and m-commerce software provider Kony Solutions, and health care company UnitedHealth Group to arrange for their content to be excluded from consumers' data caps.

The move promptly sparked controversy, with advocacy groups like Public Knowledge quickly warning that sponsored data arrangements could harm startups that can't afford to pay for the data-cap exemption.

While watchdogs are critical, the FCC has not yet indicated whether it views sponsored data as problematic. The net neutrality rules broadly prohibit carriers from engaging in conduct that hinders the ability of consumers and content companies to reach each other online. When the FCC published those rules, it said it would take a case-by-case approach to evaluating whether data caps -- and exemptions from them -- are harmful.

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