Verizon expands into sponsored content with FreeBee Data

Verizon (NYSE: VZ) finally unveiled FreeBee Data, a sponsored data offering that allows content providers to pay for the delivery of their services to consumers.

The service will support zero-rated, toll-free data in two ways: FreeBee Data 360 enables content providers to provide some or all of their data through a mobile app or website without having an impact on customers' monthly data allotments. A second model lets business sponsor consumer actions on a per-click basis, enabling the free delivery of video clips, audio streaming or app downloads.

FreeBee Data 360 is available in beta immediately; the pay-per-click model goes into effect next week. Partners including Hearst Magazines, AOL and Gameday will participate in the pay-per-click trial, providing content to 1,000 test subscribers.

The carrier said it hopes to spur the consumption of wireless data through mobile marketing efforts. "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," Colson Hillier, Verizon's vice president of consumer products, said in a prepared statement.

Verizon said in June that it planned to launch support for sponsored data through its Go90 mobile video service sometime in the first quarter of 2016, and the carrier recently said it had developed technology to "break down any byte" on its network, enabling it to identify the content provider and zero-rate specific data. And Verizon isn't the first U.S. operator to foray into zero-rated data: AT&T (NYSE: T) continues to experiment with toll-free data through the Sponsored Data program it announced in early 2014, and T-Mobile provides zero-rated (but not sponsored) video through its Binge On offering.

Critics say zero-rated data policies may run afoul of the FCC's net neutrality guidelines, however, because they can be used to promote favored content from large media companies at the expense of smaller players. And T-Mobile has been criticized for throttling the network speeds and downgrading the quality of all video consumed by Binge On users.

FCC Chairman Tom Wheeler last month sent letters to AT&T and T-Mobile, asking them to come in and "have a discussion with us about some of the innovative things they are doing" regarding data policies. With the launch of FreeBee Data, Verizon is sure to attract increased attention from the FCC as well.

For more:
- see this Verizon press release

Related articles:
FCC's Wheeler beckons AT&T, T-Mobile on mobile data policies
T-Mobile, AT&T and others draw scrutiny with zero-rated data
AT&T still 'very bullish' on Sponsored Data despite just 10 customers so far
Verizon to follow AT&T's lead with sponsored data launch in Q1 of 2016