Ready for the Wild West? NPI on AT&T Sponsored Data and Net Neutrality

Spend Matters welcomes another guest post from Matt West of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom, and shipping.

The Internet has always been untamed. But in the last month it has inched closer to something a bit more unpredictable – and there are some good news and some not-so-good news.

On January 6, AT&T announced a new way for eligible 4G customers to enjoy mobile content and apps over their wireless network without dipping into their data “checkbook.” Essentially, content or application providers that are willing to "sponsor" their data with AT&T will pony up the cost of the data rather than the subscriber. Let’s say AT&T signs up Netflix for this new sponsored data program. Subscribers might be able to stream movies over their wireless phone or tablet without it accruing against their data plan. Think of it as “toll free” access to the provider’s content.

This is good news. It opens the door for both consumers and businesses to access data sources without “spending” from their own data plan. What if Microsoft or Oracle picked up the tab for all data accessed through their cloud apps? Imagine the telecom dollars saved!

Now for the not-so-good news. Just a week after the AT&T announcement, the D.C. Circuit Court of Appeals struck down the FCC's network neutrality rule. Net neutrality was the FCC rule that barred Internet service providers (ISPs) from either blocking or restricting access in any way to any one website. It’s the rule that, for example, prevented a carrier from giving priority to Google or Amazon.

A business climate without net neutrality is a dangerous one – one where competition could be stifled across the broader business sector. If companies are forced to pay ISPs for faster load times, the businesses with the lowest IT budget will suffer as their web and mobile experiences plummet. How many startups could survive these conditions? Would an up-and-coming Facebook stand a chance?

Now is the time for enterprises to influence ISPs’ behavior towards net neutrality. NPI recommends that enterprise customers get a clear statement from their providers regarding any net neutrality-driven partnerships, and what those agreements entail.

On the other hand, AT&T’s sponsored data approach could be a boon for businesses – and early adopters could gain some interesting advantages. Again, insight into and careful navigation of contractual and pricing discussions is key.

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