Verizon is joining rival AT&T by rolling out a controversial data plan which telecommunications experts say violates net neutrality principles. Verizon executive VP Marni Walden says the company will begin tests of a "sponsored data" plan in early 2016, through which carriers can offset user data costs.
Under these plans, service providers cover the costs of transmitting data over a company’s network in exchange for the data not counting against a user's monthly allocation. This way, users can access certain streaming services for "free" without having to downloaded content charged to their personal data plan accounts.
Critics claim the sponsored data programs violates net neutrality laws because they allow larger service providers to purchase a sort of "preferred" status among users that smaller companies and startups can’t afford and compete with.
AT&T has been testing sponsored data plans since 2014 but have not rolled these out to the general public as yet.
T-Mobile has gone one step further by allowing music and media streaming services to stream on their networks without affecting user data caps. It’s "Music Freedom" plan covers 11 streaming music services.
Although Verizon will market sponsored data as a win-win with internet companies getting promotion, and consumers getting more data, these programs are a form of double-dipping. Verizon will get revenue from both the subscribers and from the services those subscribers wish to access.
There is a grey area about whether Federal Communications Commission’s (FCC) net neutrality rules allow sponsored data programs. In theory, the rules forbid paid traffic prioritization but don’t explicitly ban toll-free data. AT&T has been seeking a ruling on the matter. Verizon’s entry into the sponsored data plan market may prompt the FCC to make a ruling sooner than later.
The FCC has filed complaints against carriers who have advertised unlimited data options, yet deliberately slowed speeds for users who exceeded a monthly preset data limit.