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AT&T Spits on Net Neutrality, Denies Doing So

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AT&T's new Sponsored Data plan makes some Internet traffic "more equal" than others.

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In an age where mobile carriers run roughshod over their customers while raking in billions, net neutrality has become a rallying cry from users hoping to regain some semblance of technological freedom from their provider's draconian policies and fees. Naturally, left to their own devices, carriers like AT&T (NYSE:T) and Verizon (NYSE:VZ) have introduced arbitrary data caps and throttling -- not to mention are charging ridiculously marked-up fees for text messaging. They've effectively reduced choice (try running Android's (Nexus 5 on Verizon's network) and eliminated true ownership (or removed bloatware from smartphones with locked bootloaders).

So, whenever one of these providers has a new policy to announce, subscribers' immediate inclination is to be wary. And AT&T's new Sponsored Data program justifies such a reaction.

Earlier this week, AT&T touted a new plan wherein advertisers and developers can pay to deliver content to someone's phone without it counting against a customer's data cap. Like with most new sweeping programs, the policy appears at face value to directly benefit the consumer. After all, who wouldn't want to access data without hitting that data limit? But by introducing a pay-to-play system for content makers, AT&T destroys that even playing field where net neutrality thrives.

Nilay Patel at The Verge explains the problem with a streaming-video example. If a movie can be streamed for $4.99 from both Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG), either company could subsidize the cost of the rental by paying AT&T directly and not have the download count against the subscriber's plan.

"That has huge implications for the free market of the Internet," Patel writes. "[If] YouTube doesn't hit your data cap but Vimeo does, most people are going to watch YouTube. If Facebook feels threatened by Snapchat and launches Poke with free data, maybe it doesn't get completely ignored and fail. If Apple Maps launched with free data for navigation, maybe we'd all be driving off bridges instead of downloading Google Maps for iOS."

And as soon as certain content makers are given preferential treatment over others, there goes net neutrality.

This week at the Consumer Electronics Show in Las Vegas, FCC chairman Tom Wheeler voiced his concern over AT&T's Sponsored Data plan and its threat against Net Neutrality. "My attitude is: Let's take a look at what this is, let's take a look at how it operates." He added, "And be sure, that if it interferes with the operation of the Internet; that if it develops into an anticompetitive practice; that if it does have some kind of preferential treatment given somewhere, then that is cause for us to intervene."

But while the government agency is taking a more "wait-and-see" approach, California Congresswoman and net neutrality advocate Anna Eshoo is convinced that AT&T is overstepping its boundaries and believes the program should be nipped in the bud. "On its face, the ability for consumers to access 'toll-free' content seems like long-awaited relief from frustrating data caps," she said. "But embedded in programs of this type are serious implications for fairness and competition in the mobile marketplace."

She adds, "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."

Of course, AT&T has a different interpretation of the matter and denies its program violates net neutrality.

AT&T's senior executive vice president of external and legislative affairs, Jim Cicconi, said in a statement, "We are completely confident this offering complies with the FCC's net neutrality rules, which our company supports. AT&T's sponsored data service is aimed solely at benefiting our customers. It allows any company who wishes to pay our customers' costs for accessing that company's content to do so. This is purely voluntary and non-exclusive. It is an offering by that company, not by AT&T."

But contrary to what Cicconi says, this isn't just like a company offering a discount on a paid app or movie. Data caps themselves are already a ludicrous restriction based on unquantifiable metrics that do nothing but generate bigger profits for providers. Subsidizing data usage so a product can be accessed without fear of restriction is the very antithesis of net neutrality and the free market. It all but begs the user to access one service over the other due to an unnecessary limit put into place by a superfluous and all-too-powerful middleman.

When one megabyte isn't equal to another, net neutrality is lost. Let's just hope the FCC can come to realize that.

See also:

Facebook, Inc. Makes a Mobile Move

Live From CES: Your Next Audi Will Be Obsolete in Two Years
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