May 13, 2013, 1:25 PM — It sounds like a great idea in theory: Instead of racking up a huge wireless data bill on streaming video, let the media companies cover the cost of data instead.
That's what ESPN and other companies are considering, according to The Wall Street Journal. Unnamed "people familiar with the matter" claim that under one scenario, streaming video from these media companies would not count toward users' monthly data limit.
We've heard this tune before. Last year, AT&T Senior Executive Vice President John Donovan floated the idea of letting app developers pay for data. AT&T hasn't said much about the idea since then, but it's clear that carriers are still very interested.
The Journal cautioned that a deal isn't imminent. Questions over the economics, and possible regulatory scrutiny, could prevent it from happening.
Let's be clear: You don't want this to happen, no matter how good it sounds. Letting media companies cover your data bill would be a killer for net neutrality, and would endanger innovative new services that can't afford the racket.
Imagine a scenario where a company like Comcast covers the cost of wireless data for any TV shows that its cable subscribers watch on their phones. That puts pressure on other companies, like Netflix, Amazon, and Hulu, to also pay up, or else they'll be at a disadvantage.
Music is another example. Let's say Pandora and Spotify are willing to pay for their users' wireless data, but smaller rivals such as Slacker Radio and Rdio are not. The lure of free data will only serve to bury these services, even if they have better features than the more well-endowed competition.
If you really want to stream music or video by the gigabyte without worrying about data caps, the solution is simple. Switch to a carrier that still offers unlimited data, such as Sprint or T-Mobile.
In the meantime, let's hope deals like this one never materialize; or if they do, that the Federal Communications Commission finally starts taking wireless net neutrality seriously.