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Would Verizon’s 'sponsored data' plans violate net neutrality?

Verizon's 'sponsored data' program would allow wireless customers to access some services without counting against their monthly data caps, so long as those companies pay Verizon. But net neutrality advocates say this gives deep-pocketed companies an unfair advantage.

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    Verizon's "sponsored data" plan would allow companies to pay for customers to access their services without eating into their monthly data caps. Here, a man is silhouetted against Verizon and Vodafone logos in Zenica, Bosnia on September 3, 2013.
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When you watch a video, listen to an album, or visit a website on a 3G or 4G network, you use up a little bit of your mobile data allotment – except when you don’t. A few wireless companies, including AT&T, T-Mobile, and now Verizon, have been experimenting with special “sponsored” plans in which certain services – such as Netflix or Spotify – wouldn’t count against customers’ monthly data caps.

And while lots of people might be excited about the chance to browse without worrying about how many megabytes they have remaining, there's little agreement about whether the plans violate net neutrality principles.

Verizon will begin testing a program this week under which companies can pay for Verizon Wireless customers to be able to see their content without using up their mobile data, Re/code’s Ina Fried reports.

Recommended: Net neutrality: five questions after court struck down the rules

“The capabilities we’ve built allow us to break down any byte that is carried across our network and have all or a portion of that sponsored,” Verizon executive vice president Marni Walden told Re/code in an interview.

That’s similar to so-called “zero rating” programs offered by other big wireless companies. AT&T began experimenting with sponsored data last year by charging content providers to deliver some content to wireless customers. AT&T also has a “Data Perks” application in which customers can sign up for various offers from big brands in exchange for more monthly data.

T-Mobile unveiled a feature last month called “Binge On,” under which video applications such as Netflix and Hulu can be streamed over mobile networks without counting against data caps. The company’s “Music Freedom” program, introduced last year, does the same thing for music services such as Apple Music and Spotify. 

Net neutrality advocates say zero rating plans are a problem because they give some companies an advantage over others. A big company might be able to pay Verizon, AT&T, or T-Mobile for customers to access its content without hitting their data caps, but a small company might not – meaning that customers are less likely to use or even know about its service.

“Imagine a world where everyone still used Friendster because a young Mark Zuckerberg never had enough money as a college kid to pay off carriers’ ‘sponsored data’ fees,” wrote Boy Genius Report’s Brad Reed. 

The Federal Communications Commission’s Open Internet rules, passed earlier this year, say that providers of wired and wireless networks must be “non-discriminatory” in how they deliver content to customers. But neither the FCC nor the Federal Trade Commission, which sometimes handles telecom regulation, have argued that zero rating schemes violate this provision. After an FCC meeting last month, Chairman Tom Wheeler called T-Mobile’s “Binge On” program “highly innovative and highly competitive,” according to Ars Technica’s Jon Brodkin.

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