AT&T this week announced a new program under which providers of online services or apps can negotiate special deals to “sponsor” data usage by AT&T mobile customers, allowing those customers to use the services or apps without it counting towards their bandwidth caps. The argument for this idea is that consumers get some relief from the feeling that the data meter is always running, and online services get a way to overcome possible consumer reluctance to make full use of data-intensive services. But if AT&T’s model were to catch on widely, it would carry serious risks to the Internet’s open and innovative nature.
To be sure, one can imagine scenarios in which a sponsored data option could actually help spur competition and uptake of mobile online services. If consumers are reluctant to try new apps or services due to fear of hitting their data caps, then sponsoring data could provide a way to overcome that barrier and encourage consumers to experiment. In effect, it would provide a way to give out free samples.
If sponsored data arrangements become a more pervasive part of the online ecosystem, however, the risks to innovation will outweigh any potential benefit. Here’s why.