3 reasons AT&T's sponsored data plan isn't the end of the world

After all, providing network access isn't free, and someone has to pay for it.

AT&T rattled some cages this week when it announced at CES a plan to let companies sponsor network access to reach specific websites or streaming content. The idea is that such deals would allow companies to serve up high-bandwidth content without their customers – especially mobile customers -- worrying that they’ll blow out their data plan limits and end up paying big bucks just to watch a commercial.

Coming on the heels of a similar deal last week between Facebook and T-Mobile, network neutrality advocates cried foul, saying that these kinds of deals would enhance the ability of large, rich firms to spread their content at the expense of smaller outfits.

Well, yes and no.

Not a new concept

First off, these kinds of deals are not exactly new. In some respects, they’re not so different than toll-free phone numbers, where companies subsidize incoming calls.

Second, offering network access costs money, and someone has to pay for it or companies won’t offer it. Even Wi-Fi isn’t free to offer, and there are a wide variety of arrangements being tried to pay for it, from advertising on networks in airports to cafés charging hourly “seating fees” to customers who camp out with their computers all day nursing a single cup of joe. As one wag put it: “Wi-Fi is free like puppies are free.”

Gotta try something

It’s not clear which, or any, of these approaches will succeed, but it makes sense to throw them against the wall and see which ones stick. My feeling is that AT&T’s plan will work in a few cases, but is unlikely to generate enough traction to become a dominant business model. But what do I know? The only way to find out is to try it.

Could be a win/win

Finally, while I’m usually on the Net Neutrality side of things, I don’t think this concept is so terrible. Even if it turns out to be successful, I don’t see it givng big companies such a huge advantage. In fact, if consumers don’t have to pay for some portion of their online usage, that should theoretically make more bandwidth available for other purposes – a win/win situation.

My only caveat is that this positive outcome only works if the carrier and access providers don’t get greedy. If they use these kinds of deals to cut the amount of data they allow, or raise prices, then the doomsayers could actually be right. If they’re content with just pulling in a little extra revenue from corporate sponsors, though, this could actually turn out to be a good thing.

Who’da thunk it?

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