Sponsored Data and Net Neutrality: Exemption and Discrimination in the Mobile Broadband Industry

Abstract

The FCC’s 2015 Open Internet regulations are strong net neutrality protections, but their effectiveness ultimately depends on their enforcement. The rules prevent broadband providers’ blatant discrimination but leave open possibilities for less obvious but still troubling preferential treatment online. This article considers AT&T’s Sponsored Data program—which charges online content providers to exempt their traffic from users’ mobile broadband data caps—as an example of a subtle erosion of net neutrality that the FCC should address. While Sponsored Data provides users some relief from data caps, it also threatens to limit the reach of bottom-up creativity online through its uneven distribution model. This article argues that sponsored data cap exemptions are pernicious paid prioritization that unfairly disadvantage independent and noncommercial creators. Through a case study of AT&T’s Sponsored Data, the analysis here shows how such discrimination through exemption creates conditions of inequitable online distribution by unfairly favoring those commercial enterprises that can afford to pay for this privilege. This case shows how, by installing data caps on internet access and then collecting tolls to get around them, broadband providers can leverage their bottleneck position in internet infrastructure to be powerful gatekeepers of online expression.