Verizon Offering ‘Sponsored Data’ Program

Verizon is the latest cellphone company to offer web surfing for customers that doesn’t count against their data caps.

Under such caps, you can get hit with extra fees or slower speeds if you go over your plan’s data limit. That’s not particularly difficult, especially if you’re often watching video and listening to music on the go.

Verizon has said that it’s interested in “sponsored data” as another source of revenue. A company can pay Verizon so that phone users can browse their websites, watch video clips or download their apps without using up their data allotment. Verizon says brands that have signed up include Hearst Magazines and AOL, which Verizon owns.

AT&T also launched a sponsored data program two years ago, but relatively few companies are participating.

By contrast, T-Mobile exempts several dozen music and video providers from caps, but says it isn’t charging them. It says it wants to appeal to customers who watch a lot of video in a way that doesn’t strain its network as much. To do that, it degrades video quality across the board, even for video that isn’t exempted from caps. T-Mobile says that lets customers watch more.

Government regulators have asked AT&T and T-Mobile for more information about their strategies. While net neutrality rules enacted last year don’t ban the practice of picking and choosing services that won’t count against data caps, technically known as “zero rating,” some advocates say it could hinder innovation or favor some companies over others. Net neutrality refers to the concept that websites and apps should be treated equally by internet service providers.