AT&T kills sponsored data due to California net neutrality law

AT&T primarily used its sponsored data service to remove usage charges from its video services, including HBO Max, for customers who have otherwise had to pay per-GB fees to stream them.

Mike Dano, Editorial Director, 5G & Mobile Strategies

March 17, 2021

3 Min Read
AT&T kills sponsored data due to California net neutrality law

AT&T said it would discontinue a sponsored data service that it used to remove data charges for some AT&T mobile customers who streamed its video services.

The company blamed the new California net neutrality law for the action.

"Unfortunately, under the California law we are now prohibited from providing certain data features to consumers free of charge," the operator wrote on its website. "Given that the Internet does not recognize state borders, the new law not only ends our ability to offer California customers such free data services but also similarly impacts our customers in states beyond California."

Reuters reported that AT&T declined to say how many customers will be affected by the move. Presumably those customers would subscribe to the operator's metered mobile data plans that levy charges based on the number of gigabytes customers use per month.

Some consumer advocates cheered AT&T's move.

"AT&T cancelling its discriminatory zero rating due to California's net neutrality law is a good thing for consumers," wrote Ernesto Falcon, the senior legislative counsel for the nonprofit Electronic Frontier Foundation, on Twitter.

Falcon cited research showing that sponsored data programs like those from AT&T, which "zero rate" data charges generated by specific services, can lead to higher costs overall for consumers.

On its website, AT&T explained that it uses sponsored data "to offer Data Free TV, allowing customers to stream their favorite movies and shows over their AT&T wireless service without it counting against their wireless data plan. AT&T Mobility has for years openly invited any entity to become a wireless data sponsor on the same terms and conditions. Since it began, our sponsored data service, and competing offers from other wireless providers, have delivered significant benefits and saved consumers money."

AT&T launched its sponsored data program in 2014. However, a year later the operator listed just a handful of companies – Aquto, Macheen (which was purchased by Good Technology), Wazco, DataMi, Syntonic Wireless, LotusFlare, HipCricket, WPS/Kingsoft and Screen Media – that were using it. By 2018, The Verge reported that only three video services were using the program – DirecTV, U-verse and Fullscreen – and they were all owned by AT&T. The company added its new HBO Max service to that list in 2020.

An AT&T representative did not immediately respond to questions from Light Reading about which companies might be using the company's sponsored data program aside from AT&T.

To be clear, AT&T isn't the only company active on the sponsored data landscape. Verizon launched its own sponsored data service, called FreeBee Data, in 2016. Company officials did not immediately respond to Light Reading questions about that program and how it might be affected by California's new law. Similarly, T-Mobile officials did not immediately respond to questions about its Binge On program, which also is designed to stream specific video services outside of per-MB data charges.

Although the concept of sponsored, or "toll free" data was loudly discussed roughly a decade ago in the US wireless industry, the topic has fallen by the wayside amid the widespread availability of unlimited data plans for smartphones.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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