Carriers

AT&T considers asking app makers to subsidize some data use.

February 27, 2012 | by Andrew Kameka

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AT&T has an interesting proposition: instead of having customers worry about tiered data and monitoring how much that video streaming is going to eat into their monthly allotment, just make app developers pay for the data that its users consume.

In an interview with the Wall Street Journal, AT&T CTO John Donovan proposed a program that would allow certain apps to be exempt from data limits if its developer foots the bill. Donovan told the Journal:

“A feature that we’re hoping to have out sometime next year is the equivalent of 800 numbers that would say, if you take this app, this app will come without any network usage.”

In other words, data-hungry apps like Netflix or Spotify would not count towards data plans if those companies would pay AT&T directly. Someone on a 2 GB plan could then watch as many YouTube videos as he or she wants without fear because Google would foot the bill. Why would Google ever do that? Because it might make enough money on ads to offset the costs. A music streaming service might then have to participate because its rivals joined; why use Rdio if Spotify doesn’t use any data and gives AT&T a kickback?

And there lies the lunacy of the whole idea. While Google might have the funds to enable Google Music streaming (they probably wouldn’t, but humor me) in this program, an upstart like Grooveshark never would or could. AT&T would be giving an unfair advantage to select companies, and even big names like Netflix probably wouldn’t participate for fear of setting a dangerous precedent.

AT&T would argue that users are more likely to use services that are in the program, but that gives deep pocketed-companies an advantage. The carrier already has some interest from unnamed companies, according to Donovan. Rather than see this as a shakedown for protection money, some companies supposedly see it as an opportunity to spend money to earn money.

“What they’re saying is, why don’t we go create new revenue streams that don’t exist today and find a way to split them,” Donovan said.

via GigaOm