What is Sponsored, aka “Toll-Free” Data?

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So called “sponsored data” is creeping in the back door, whether we like it or not. The concept is still in testing phase, but if (or when) it takes on, it will work like this: any company, group or organization with a website can pay a wireless carrier (such as AT&T) for direct access to its customer base. Targeted customers than get this “extra” aka “sponsored” data for free. Along with the new process, comes a new player: content brokers like Syntonic who are in charge of facilitating the data flow from content providers to wireless carriers – and down to targeted customers. Syntonic has formally partnered with AT&T to offer customers access to premium content via Syntonic’s Sponsored Content Store. Content brokers such as Syntonic cite benefits – For instance, to school districts that pay to give students specific educational apps. In this scenario the school district is the content provider and the students the consumers. In this scenario the customer pays nothing for the premium content. All costs are incurred by the specific content provider. Critics say that the Sponsored Data system will be a blow to net neutrality. Net neutrality advocates, including representatives from public interest groups, have argued against sponsored “toll-free” data plans, saying that the end result will favor large, rich corporations over smaller ones. So, what do subscribers think? Surprisingly, 74% of subscribers who responded to Flash Network’s LTE study, felt that premium subscription plans were an important offering that could contribute to a better user experience. But how will they feel about it when content providers start passing the costs on down to customers – either by increasing membership rates or implementing data caps on services like Spotify. FCC Chairman Tom Wheeler has promised to monitor the new plans and intervene if they develop into “an anticompetitive practice or give preferential treatment.” It is the opinion of Steel in the Air that this issue is a hot topic that definitely will need monitoring and perhaps modification in the very near future.

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