Some people think all Internet traffic should be treated equally. Others have no problem propping up certain services. To no one’s real surprise, cellular carriers are increasingly in the latter camp.
On Wednesday, Sprint’s prepaid Virgin Mobile division announced a dirt cheap prepaid plan that lets customers pay a paltry $5 for uncapped usage of Facebook or other social networks, instead of a broader and pricier data plan.
This follows similar announcements by T-Mobile, which offers unlimited music streaming from Pandora, Spotify and other apps, and AT&T, the first carrier to launch a “sponsored data” scheme that lets favored apps or services pay for their users’ data costs.
Such strategies can help mitigate expensive cell phone bills for customers. But they also point to a growing willingness among cellular providers to give favorable treatment to select services in the name of customer convenience.
Tempting Customers With Savings
The Virgin Mobile Custom plans give prepaid customers unlimited usage of Facebook for just a $5 add-on fee. (Voice and text starts at around $7 per line.) The idea is to let people indulge just the services they use the most, for a wallet-friendly price.
Not a Facebook addict? No problem. You can get the same deal for Twitter, Instagram or Pinterest, or get all four in a combo deal. A few bucks more, and you can even add unlimited music streaming as another add-on—though again, only on a few specific services.
These plans are clearly designed for social media junkies who want their fix without high data-use charges (or busting through their data caps). But Dow Draper, Sprint’s president of prepaid, prefers to emphasize flexibility. He told the Wall Street Journal the plans are “just part of a broader effort toward customization.”
The primary target customers are families, so the carrier highlights features that would appeal to parents. Users can fire up an iPhone or Android app to limit household members’ usage to certain hours, add a set number of international minutes or change their plans on the fly to save money.
What Those Cheap Plans Will Really Cost
Given the high price and bandwidth limitations of data plans, I could see people finding value in this. But what they might not realize is that they’ll likely start running up data fees the moment they click on an outside link.
The bigger, although more abstract, problem is the way such plans stack the deck against any up-and-coming challengers to today’s major social networks. Basically, users are being encouraged to stick with the major apps they already frequent, giving those established services an unfair advantage.
That’s been the main argument of net neutrality advocates, who up to this point have mostly focused their attention on broadband providers. (The FCC’s recently voided net-neutrality regulations—which the agency is now attempting to revive—actually exempted wireless carriers.)
For instance, Netflix—a vocal supporter of net neutrality—may not like it, but it’s paying off Comcast, Verizon and now AT&T to ensure decent speeds for its streaming users. Without that added incentive, those pipes tend to get clogged rather easily (though it’s not clear if it’s intentional).
Turns out, those advocates should’ve been keeping their eyes on the cell carriers too.
At least Virgin Mobile Custom will only be available through Walmart (on August 9) and will work with just three devices to start: the $80 ZTE Emblem, the $100 LG Pulse and the $130 LG Unify. Those aren’t exactly hot handsets, so the major social apps won’t get much of an advantage. Maybe that’s why none of them are currently paying Sprint for their “most favored applications” status.
But Sprint hopes to expand its lineup of smartphones for its Custom plans, and Draper seemed open to accepting payment from Facebook and the others. He told WSJ’s Digits blog that “it’s definitely possible. But we have not gone down that path yet.”
The key word there is “yet.”
Feature image by ActuaLitté