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FCC to monitor AT&T 'Sponsored Data' plan for anticompetitive behavior

updated 10:31 am EST, Thu January 9, 2014

Plan for data allowances paid for by content providers to face scrutiny

The Federal Communications Commission (FCC) may look into how AT&T conducts the "Sponsored Data" program it introduced earlier this week. The FCC Chairman, Tom Wheeler, reportedly expressed concerns that the plan to allow content providers to pay for data used by customers over the carrier's cellular network could be anticompetitive.

When asked about the program, Wheeler advised "My attitude is: let's take a look at what this is, let's take a look at how it operates," reports The Verge. Wheeler warns that if it "interferes with the operation of the Internet; that if it develops into an anticompetitive practice; that if it does have some kind of preferential treatment given somewhere, then that is cause for us to intervene."

FCC Chairman Tom Wheeler
FCC Chairman Tom Wheeler

AT&T's plan would allow businesses to cover the cost of whatever data is used by carrier subscribers to access their service, in order to avoid using any of the subscriber's data plan allocation. Despite the effectively-free nature of the plan, it would only be open to post-paid subscribers of AT&T and not prepaid customers, will only be useable on AT&T's US network, and depending on the nature of individual sponsorships, could be limited to HSPA+ and LTE traffic.

Potentially, this could lead to a situation where the larger online services will pay for user data allowances, keeping subscribers away from start-ups that cannot possibly compete with their smaller budgets.

by MacNN Staff



  1. Inkling

    Senior User

    Joined: 07-25-06

    Chairman Wheeler seems a bit off today. The feature is anti-competitive only if AT&T can somehow conspire to keep other cellular companies from doing the same. As is, it's a hopeful sign that the cellular industry is actually becoming competitive rather than an Old Boys network where the Prime Directive is, "I won't do it if you don't." And what he says about the smaller online services makes little sense. A smaller customer base means smaller expense. If anything, a newer firm could build for greater data efficiency and gain an advantage.

  1. JackWebb

    Fresh-Faced Recruit

    Joined: 08-31-07

    Wheeler, you'll have to explain to me how this can become anticompetitive. If AT&T does do some preferential treatment and consumers don't like it, there are competitors consumers can turn to. FCC, stop thinking a couple of you are so much smarter than the millions of people individually making decisions on what each of those people knows more intimately what they like and cumulatively is thousands of times smarter than any small group.

  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    The reality is that it raises the barrier for entry for the sponsor's competitors.

    You know what a committee is, right? A committee is an animal with four or more legs, but just half a brain.
    The "millions of people" has a logarithmic effect on that definition. The invisible hand is invisible because it is too embarrassed by it's efficacy to show itself. ;)

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