Verizon (NYSE: VZ) waded further into sponsored content, issuing an update to its Go90 app this week that enables Verizon's postpaid users to stream content through the app on the carrier's LTE network without incurring additional data charges. Other Go90 activity such as browsing, downloading, clipping and sharing content will continue to incur data charges.
The zero-rated video is available through FreeBee Data 360, a new Verizon program that enables content providers to deliver some or all of their content through an app or mobile site without having an impact on users' monthly data allotments. While some consumers are sure to appreciate the free video, Verizon risks being criticized for favoring deep-pocketed content companies at the expense of smaller providers that can't afford to sponsor their data.
That's especially dangerous for Verizon, a media company in its own right thanks to the acquisition of AOL, which also owns Engadget, the Huffington Post and other outlets.
"It seems like a fairly clear breach of net neutrality as most people define it -- treating your own content preferentially," tweeted analyst Jan Dawson.
Verizon launched Go90 last fall in an effort to deliver ad-supported video to users across mobile networks. After a somewhat sluggish start, the app reportedly has notched 2.7 million downloads. And it's likely to get a sizable boost Sunday, when smartphone owners can use the app to watch the Super Bowl.
T-Mobile (NYSE:TMUS) was the first U.S. carrier to offer zero-rated streaming video through its Binge On service, which has quickly gained traction among its customers. Indeed, the carrier said recently that users on qualifying data plans are watching more than twice as much video than they were before Binge On launched, and users have streamed 34 petabytes of video without incurring additional data charges.
But T-Mobile has also drawn a substantial amount of criticism for the data policies it implements with Binge On. Network data speeds are slowed for all video consumed by Binge On users, not just from the content providers that are part of the program. And T-Mobile downgrades the video quality, further easing the stress on its network.
A Verizon spokeswoman said the zero-rated video through Go90 is not throttled or downgraded in any way, unlike video for T-Mobile's Binge On.
"FreeBee Data 360 does not change the speed or the quality of the content sponsored," Verizon's Deidre Hart said. "It merely transfers the billing from a consumer to a sponsor."
That response may not sit well with FCC Chairman Tom Wheeler, who in December summoned T-Mobile and AT&T to explain their policies for zero-rated data.
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