Verizon, T-Mobile promote idea of 'toll free' data plans

NEW ORLEANS--Verizon Wireless (NYSE:VZ) and T-Mobile USA are toying with the idea of launching "toll free" data plans that would exclude certain types of content from counting toward a customer's monthly data allotment, according to carrier executives. 

Verizon Tony Melone


The plans are not in any way final and may not make it to market, the executives said here at the CTIA Wireless 2012 conference. However, they seem to track with a proposal made by AT&T (NYSE:T) earlier this year. AT&T said in late February it was working on a service that would allow app developers pay the wireless carrier directly for some of the data used by app consumers. AT&T's John Donovan, the company's senior executive vice president of technology and network operations, compared the service at the time to a toll free number.

Brad Duea, senior vice president of value added services at T-Mobile, told the Wall Street Journal that the carrier is considering similar plans. "On certain plans, we actually could include special channels and not count the data," Duea said, adding that the goal is to get consumers to use more data. He said T-Mobile is working on a video channel for smartphone users that would carry T-Mobile ads and device tips. Duea told the Journal that the cost of the data could be paid for by the content providers, advertising sponsors or by T-Mobile.

When AT&T's Donovan unveiled the idea he was roundly criticized by net neutrality proponents. The FCC has approved net neutrality rules for wireless networks that have been challenged in court by Verizon and MetroPCS (NASDAQ:PCS). Under the rules, wireless carriers are barred from blocking services such as Google Voice and Skype that compete with their own voice and video offerings, as well as those in which they have an attributable interest. However, wireless carriers would not face the same restrictions wired operators will on blocking Web traffic and other applications--a ban on unreasonable discrimination in transmitting lawful network traffic.

A Verizon executive also said he is considering toll free data plans, where content providers would pay carriers for the data access charges users would generate in accessing their content. 

"As we move away from flat rate pricing, there is room for an 1-800-type of service where certain destinations could offset the cost of the network to get customers to those destinations," said Verizon CTO Tony Melone at a panel here, according to CNET. "There are net neutrality issues that have to be addressed, too."

Melone said there is some interest from content providers for such services, but he declined to give specifics or say how far along the discussions are. "Net neutrality issues aside, there are still many things that have to happen to make it reality," he said. "But do I think it will happen? There's a better than 50-50 chance it will. I'll say 51-49."

For more:
- see this WSJ article (sub. req.)
- see this CNET article

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