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AT&T’s Sponsored Data slammed by lawmakers as a blatant shakedown

Published Jan 7th, 2014 1:20PM EST
AT&T Sponsored Data Plans Criticism

It hasn’t taken long for criticism to mount against AT&T’s “Sponsored Data” plans that will let companies pay so that data used through their mobile apps doesn’t count against their users’ monthly data caps. The Hill reports that Rep. Anna Eshoo (D-Calif.) this week has slammed AT&T’s new plan as a blatant shakedown of tech companies that will give AT&T the power to “pick winners and losers” on the Internet. 

Essentially, Eshoo is concerned that letting companies pay to get their services exempt from data caps would distort the market by tilting the scale even further in the favor of bigger players who could afford to pay AT&T’s fees. Smaller startups, Eshoo says, would be less able to pay the fee and thus be at a severe competitive disadvantage.

“On its face, the ability for consumers to access ‘toll-free’ content seems like long-awaited relief from frustrating data caps,” she said. “But embedded in programs of this type are serious implications for fairness and competition in the mobile marketplace.”

It’s also the case that not all mobile carriers enforce data caps on smartphones. Both Sprint and T-Mobile offer unlimited LTE plans for smartphones and thus aren’t likely to go around telling Spotify and Pandora that they’ll need to pay up to make sure their users aren’t slammed with overage fees for using their services.

At the very least, we wouldn’t be surprised to see T-Mobile CEO John Legere use Sponsored Data as yet another stick to whack AT&T with during his company’s press event at CES this week.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.