AT&T today announced a new "Sponsored Data" program that lets developers and brands pay to deliver content to your mobile device outside of your data caps. It sounds great for consumers on its face — you'll be able to get more stuff without paying for it! — but in reality it's a huge blow to the free and vibrant market of the internet economy, and the first step towards a new era of carrier control.
Here's just a simple example: right now you can rent Elysium from both Apple and Google for $4.99. In addition to the amount you'll pay to rent the movie, streaming that movie over mobile broadband will also obviously count against your data plan, an additional cost that you pay monthly to carriers like AT&T. Sponsored Data allows companies to eliminate that extra charge by paying AT&T directly, so if Apple wanted to stick it to Google, it could subsidize Elysium rentals and advertise that renting the movie from iTunes won't hit your data cap.
Again, that sounds great — as consumers, we'd get more for our money — but in reality it's a way for AT&T to levy taxes on companies who can afford to pay. That has huge implications for the free market of the internet: if YouTube doesn't hit your data cap but Vimeo does, most people are going to watch YouTube. If Facebook feels threatened by Snapchat and launches Poke with free data, maybe it doesn't get completely ignored and fail. If Apple Maps launched with free data for navigation, maybe we'd all be driving off bridges instead of downloading Google Maps for iOS.
That's not fair competition; that's just pay-to-play.
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