Sponsored data has a new home at America’s largest wireless carrier.
Add Verizon Wireless to the list of wireless carriers experimenting with so-called sponsored data, potentially forcing the Federal Communications Commission to say once and for all whether these programs violate net neutrality.
Launching on Tuesday, Verizon's scheme is called FreeBee Data—cue eye roll—and, according to Verizon itself, it's designed to give customers "greater flexibility when streaming or downloading content." In actuality it means that companies with money to burn can pay Verizon to cover the cost of your data consumption, making access to said data (such as video and other data-hungry content) effectively "free" to consumers.
As with similar service's like T-Mobile's BingeOn, which lets T-Mobile customers access certain streaming services like Netflix without that data counting against their monthly cap, on the surface FreeBee Data sounds like a great deal for consumers—who wouldn't want cheap and/or free access to content that normally would eat a big chunk of your monthly data allotment? The problem, according to net neutrality proponents, is that data schemes like FreeBee Data put companies with deep pockets (Hearst and AOL are among the companies testing out the service first—suggestions that Verizon bought AOL in 2015 to serve as a cheap source of content seem to be right on the money) at an unfair advantage over their smaller competitors, which goes against the idea of the internet being a level playing field for everyone.
While streaming video is an obvious consumer of bandwidth, Verizon also notes that FreeBee Data would also be ideal for companies looking to get consumers to download their apps while out and about or to browse their mobile website while walking through their retail stores ("tap here to redeem your 10% off coupon!").
The controversy surrounding these kinds of deals have not gone unnoticed by federal regulators. The Federal Communications Commission in mid-December sent letters to T-Mobile, Comcast, and AT&T asking for more information on their various sponsored data initiatives. FCC Chairman Tom Wheeler was quick to stress, it should be noted, that the agency was not automatically assuming any wrongdoing, but that it wanted to "get informed" about "what is going on."