Report: ESPN considering deal to pay for heavy users' data consumption
Thursday, May 9, 2013 @ 8:29pm
| According to recent reports, media companies with high-bandwidth apps are considering deals with wireless carriers to ensure users can consume the content without being slapped with data overage fines. Reportedly, sports network ESPN has had discussions with at least one carrier to subsidize users' wireless data usage, with the company paying to offset data used by subscribers.
ESPN has been informed by a carrier that many of its heavy mobile-content consumers reach and exceed monthly caps before the end of the month. The users typically then dramatically scale back consumption until the reset of the billing cycle.
The Wall Street Journal believes that no deal is imminent, and ESPN is uncertain if any arrangement would benefit the network. Any deal signed would be the first of its kind, and would likely induce telecom regulator involvement and net neutrality concerns.
Verizon Wireless Chief Executive Dan Mead has claimed that the company was pursuing deals involving advertisers and content providers paying for data instead of consumers. "We are actively exploring those opportunities and looking at every way to bring value to our customers," Mead said. Mead likens any deal as similar to Amazon's payment of net data costs for e-book delivery for free to Kindle users.
Last year, AT&T said that the company is considering letting mobile service providers pay for data consumed, instead of the customer, calling it the data equivalent of toll-free calling.
Paul Gallant, managing director of Guggenheim Securities said that "creating a second revenue stream for mobile broadband is the holy grail for wireless operators, but collecting fees from content companies would probably make the FCC take a close look into the policy implications."