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Las Vegas • AT&T Inc., the country's second-largest wireless carrier, announced Monday that it's setting up a "1-800" service for wireless data. Websites that pay for the service will be toll-free for AT&T's wireless customers, meaning the traffic won't count against a surfer's monthly allotment of data.
It's the first major cellphone company to create a comprehensive service for sponsored wireless access in the U.S. The move is likely to face considerable opposition from public-interest groups that fear the service could discourage consumers from exploring new sites that can't afford to pay communications carriers for traffic.
AT&T is trying to forestall critics by announcing that one of its first customers for the service is a startup: Aquto, which has an app that rewards users with extra data if they watch ads or download specific apps.
Another company that will use the service when it launches in the first quarter is health insurance company UnitedHealth Group Inc.
Mark Collins, senior vice president for data and voice products at AT&T's wireless arm, said that, as an example, UnitedHealth could use the service to provide customers with free educational videos.
Collins stressed that apart from the issue of billing, the traffic from the sponsoring sites will be treated the same as other traffic on the network, keeping AT&T in compliance with the Federal Communications Commission's "net neutrality" rules, which mandate equal treatment of traffic. Those rules are subject to a court challenge.
Collins said AT&T will charge the sponsoring sites in a number of ways, subject to negotiations. For instance, he said, it could take a share of revenue generated by the traffic. The move, he said, is part of the evolution of the wireless market, providing new avenues for growth and the option to create new business models.
Matt Wood, the policy director at Washington-based communications right advocacy group Free Press, said that in general, sponsored access plans are likely to lead to double-dipping by telecommunications operators. Given that consumers pay for a "bucket" of data every month and very few exceed it (AT&T says only a small percentage does), they won't actually save any money through the service. Meanwhile, the sponsoring companies are paying AT&T for the new sponsorships.
In addition, "there's no possibility for any oversight of the charges and fees. It's ripe for abuse and double-charging," Wood said. He had not been briefed about the specifics of AT&T's plan and spoke about sponsored access in general.
Dallas-based AT&T made the announcement at its software developer conference in Las Vegas, a day before the opening of the mammoth International CES consumer electronics show.
GoSmart Mobile, a sub-brand of No. 4 carrier T-Mobile US Inc., announced two weeks ago that Facebook traffic will be free for its subscribers, since the site is paying for it.
AT&T's announcement is much broader — the company is inviting all Web companies to use its "1-800" service, and the free access will apply to all its subscribers. At the end of September, AT&T had 51 million smartphone subscribers on contract-based plans, and a few million more on prepaid plans.