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Should you be concerned about AT&T’s Sponsored Data plan?

Today AT&T announced plans to launch a mobile Sponsored Data scheme, where consumers who use apps from participating providers would have those data charges billed directly to the provider.

A screenshot of AT&T's proposed Sponsored Data plan.
A screenshot of AT&T’s proposed Sponsored Data plan.

For example, let’s assume that Facebook will be a participating provider*, and that you have a 2gb/month data plan. When you open the Facebook app, and it begins to auto-play a video, the data that the video uses will not be charged against your 2gb/month plan, but rather will be billed directly to Facebook.

At first glance this scheme may sound great for consumers; after all, you’re getting free data. But once you look harder, it’s easy to find parts of this plan that may have privacy implications.

The Provider as a dumb tube

In an ideal world, service providers would just be a dumb tube, doing nothing more than transferring data from your content-provider to your devices. But AT&T’s scheme directly inserts itself into an otherwise private stream of data. While ISPs certainly already do examine your internet traffic, it previously was not in a position where it could directly negotiate with your content provider.

A hypothetical negotiation

It’s fairly safe to assume these participating providers will not pay retail prices for the data. Where you might be paying $7.50/gb of data, let’s assume the providers will pay $5/gb. AT&T could offer an even steeper discount to the provider if the provider gave AT&T information about you. Let’s assume Facebook knows which TV shows you Liked on Facebook. AT&T might offer a discounted rate of only $4/gb, if Facebook agreed to give AT&T that information.

Why would AT&T want to do that?

Advertising. The more AT&T knows about you, the better it can target advertising towards your interests. And it’s not inconceivable AT&T will use the Sponsored Data scheme to expand the profile data it already has on its subscribers. AT&T is already rolling out a plan where it offers a 30% discount to direct subscribers if you allow it to track everything you do on the internet. Here, it might just offer that same discount to the participating providers.

What should I do?

For now, just wait. The Sponsored Data plan is not active yet, we don’t have a finalized idea of how it will work exactly. Perhaps AT&T will take the privacy-conscious route and protect consumers with strong terms of service. Perhaps AT&T will offer an opt-out mechanism for data tracking. Keep following Privacy Blawg for updates on AT&T’s plans as they come in.

*It is important to note that there is no indication Facebook will be a participating provider, it is merely suggested as an example.