FCC Ready To Step In On AT&T's Sponsored Data Plan

Like a toddler with a pet dog, AT&T (NYSE:T) has a history of poking the Federal Communications Commission until it turns around and barks. And that’s just what it’s done now. "Make no mistake, we’re ready to intervene,” said FCC Chairman Tom Wheeler. The reason: AT&T is on thin ice with the FCC over a recently announced data program, Sponsored Data.

AT&T announced the new plan Monday that will change the way customers are charged for data. In-app data, like clicking on a link a friend posted on Facebook, will be billed to the company, not the consumer. “Similar to 1-800 phone numbers or free shipping for Internet commerce, AT&T’s new ‘Sponsored Data’ service opens up new data use options for AT&T wireless customers and customer-friendly mobile broadband channels to businesses that choose to participate as sponsors,” said AT&T.

Sponsoring data has several different potential uses. It allows companies to categorize data as personal or work-related, allowing employees to use their own devices or to save money with issued devices by determining what data was business-related. It also allows companies to encourage customers to use their apps instead of others', which has some policymakers calling the move a step away from net neutrality.

Rep. Anna Eshoo, D-Calif., jeered at the new program, saying, “the announcement of a sponsored data program by AT&T puts it in the business of picking winners and losers on the Internet, threatening the open Internet, competition and consumer choice.” Eshoo, who represents much of Silicon Valley, is a ranking member of the House Commerce subcommittee on communications. “It’s exactly why net neutrality rules came to exist in the first place and why these rules should apply equally to all forms of broadband Internet service,” she said.

That’s where Wheeler of the FCC draws the line. “We want to encourage innovation, with the full capability and legal authority to intervene in those circumstances where there are untoward impacts on competition and consumers,” he said. While he has made no moves yet to block the new plan, Wheeler is prepared to step in if needed, which isn’t right now.

“As content consumption has evolved from analog to digital, so have the ways for companies to reach consumers,” said Andy Geisse, CEO, AT&T Business Solutions. “The Sponsored Data model is just one way we’re helping companies tap into our network to offer differentiated experiences and transform the way they do business.”