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Verizon Tests Company-Sponsored Data Program
Posted January 19, 2016
Verizon Tests Company-Sponsored Data Program
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By Shirley Siluk. Updated January 19, 2016 2:01PM

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While several mobile carriers in the U.S. already offer some form of free data services for customers, Verizon's new FreeBee Data program is different because it's paid for by company sponsors rather than Verizon.

Launched as a beta test, Verizon's FreeBee Data service will be offered in two formats. One program, which starts today, provides customers with mobile content that's supported by company sponsors on a per-gigabyte basis. A per-click option is set to roll out to 1,000 test subscribers beginning on January 25.

Verizon's latest offering raises new questions in an environment where other carriers' free data services are already coming under scrutiny by the Federal Communications Commission (FCC). The FCC, which last year issued its landmark Open Internet order aimed at ensuring Net neutrality, recently asked AT&T, Comcast and T-Mobile to provide more information on their free data services.

Sponsors Gain Detailed Analytics

Billed as a way to let customers "gain greater flexibility when streaming or downloading content on their mobile devices," Verizon said the FreeBee Data service will also help businesses "drive better engagement with mobile content."

Among the companies that have already signed up to participate in the pay-per-click FreeBee Data trial are AOL, Gameday and Hearst Magazines. Verizon added that it is looking for additional companies that want to try out the program.

Sponsored content that's free to stream without affecting the data plans of Verizon's customers will be identified by a bee icon. Companies that sponsor free data will be able to track how users access their content via interactive dashboards showing views, conversion rates, regional popularity and other data points, Verizon said.

"By building capabilities to help brands promote their content and applications, our new FreeBee Data service is a powerful tool designed to help marketers take an active part in consumers’ mobile lives," said Colson Hillier, Verizon's vice president of consumer products.

Pay-To-Play 'Harms Free Speech'

Kit Walsh and Jeremy Malcolm of the Electronic Frontier Foundation (EFF), a digital rights advocacy group, told us that Verizon's FreeBee Data program raises red flags in light of the FCC's stance on the Open Internet. Verizon did not respond to our request for more details about its new offering.

"[M]y initial impressions are that the FreeBee Data plan poses serious consumer and competitive harms that the FCC would do well to examine closely," said Malcolm, a senior global policy analyst at the EFF. Verizon's program differs from other so-called zero-rating services -- where some content doesn't count toward customers' data plans -- because those don't involve any cost to content providers, he said.

"We harbor concerns even about those programs, but these concerns are only heightened when payment enters the equation," Malcolm said. "The effect of this will be to sideline non-profit content sources, and to privilege advertisers and big-pocketed incumbents."

Walsh, an EFF staff attorney who works on Net neutrality and other issues, added that the FCC's Open Internet order made it clear the agency was concerned about the impact of zero-rating content on free speech and competition.

"We don't know yet where the FCC will draw the line on zero-rating, but it would be surprising if the FCC approved of pay-to-play zero-rating," Walsh said. "Like paid prioritization, pay-to-play zero-rating harms competition and free speech by boosting the incumbent companies who can afford to pay at the expense of innovators, individuals, and nonprofits."

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