Content Providers and App Developers to Subsidize LTE/3G Bandwidth Costs?

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A story that is getting some traction this morning is a Wall Street Journal article about how quickly new iPad users are consuming their monthly bandwidth allotments over LTE. We covered this story on our iOS Blog. While the conclusion may seem an obvious, carriers are beginning to consider other ways to help shift the bandwidth cost away from the consumer.

In particular, the Wall Street Journal notes that AT&T is considering a plan to do just that by allowing the content providers to pay for usage of their apps:

AT&T, for example, is studying a plan to give app developers and content providers the option to pay for the mobile data their products use, thereby keeping those apps and videos from counting against a user's allotment of data, kind of like an 800-number for apps.

If implemented, this would presumably allow bandwidth usage for certain apps to be free. For example, watching shows from a TV network app such as ABC Player might not count against your monthly bandwidth allotment. Instead, ABC would pay AT&T (or Verizon) for the mobile bandwidth consumed. In return, ABC would likely see increased usage of their app to watch shows and more revenue from in-show advertising.

Mobile carriers in the U.S. have been moving away from unlimited bandwidth plans over the past few years. Instead bandwidth is sold in specific allotments (2GB, 3GB) per month with additional fees for overages.

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Top Rated Comments

buckyballs Avatar
159 months ago
This is a terrible idea. One of the best things about the App Store for developers is that it allows small companies to compete against the big boys. Doing this allows the big companies (that can afford to) pay the bandwidth costs, while smaller companies that might not be able to afford this will lose out, as the customer will always go to the app that doesn't count against their usage allowance
Score: 34 Votes (Like | Disagree)
miles01110 Avatar
159 months ago
Interesting idea, although that just means these apps will just turn into Hulu (ads every 3 minutes) or you'll have to pay a subscription fee, which is basically the same thing as paying for the data plan.
Score: 29 Votes (Like | Disagree)
Porco Avatar
159 months ago
I'm sure it is great to have LTE speeds... but when you've got 3GB data caps I don't really see the point for the majority of users.

I don't really like this idea either though, the answer is for the carriers to stop being so ridiculous and invest some of their huge profits in more infrastructure, not undermining whatever is left of Net Neutrality.
Score: 18 Votes (Like | Disagree)
JangoFett124 Avatar
159 months ago
This is just a variation of getting around net neutrality, and puts the smaller shops at a huge disadvantage against the big guys. Don't think that this will stop at being an optional service for developers. And don't think the costs won't be passed back on to the user, anyway.
Score: 16 Votes (Like | Disagree)
TheBronx Avatar
159 months ago
Horrible idea.
Score: 13 Votes (Like | Disagree)
AppleDroid Avatar
159 months ago
It's just going to make those content providers raise their prices elsewhere (online content, cable costs etc) so the consumer will end up paying for it somehow.
Score: 9 Votes (Like | Disagree)