Wireless Carriers Could Take a Shine to Ad-Blocking

Shine Technologies, an Israeli startup with an office in Sunnyvale, California, may well upend the Net neutrality issue with the launch of AdSight, an ad technology product in development.

AdSight will allow wireless carriers to monitor the ads being delivered over their pipes, The Wall Street Journal reported. The data provided will be very granular, including who the ads are from and the level of individual ad impressions.

The technology also will be able to block ads selectively on browsers or apps.

Armed with this technology, a wireless carrier presumably could insert itself into the mobile ad ecosystem and cut itself a rather large slice of pie by trading access to its customers in a revenue-share model.

Network management would be another reason for the carrier to want this technology — a reason that conceivably could help it make an end run around Net neutrality rules.

Carriers and ISPs are allowed reasonable network management practices under the rules, and some ads, especially those that carry video, do eat up a lot of bandwidth.

However, it might be a stretch, at best, to expect that rationale to fly with the Federal Communications Commission, which increasingly is showing signs of coming down more firmly on Net neutrality regulation, including in the mobile sphere — an area it has not touched to date.

In short, this clearly would be a monetization play for wireless carriers. One major question, though, is whether regulators will allow it.

If they do, the technology represents a fantastic opportunity for the wireless industry, telecom analyst Jeff Kagan told the E-Commerce Times.

The mobile ad industry, for all its growth and robustness, is still in its early days, he said. “The industry hasn’t settled on one way or formula for monetization — there are all kinds of theories. Everyone wants to make money from it.”

Put another way, no one wants to bear an inordinate burden of its costs.

The Netflix Model

To date, the playing field been tilted away from the carriers, said Ritch Blasi, SVP of mobile and wireless at Comunicano.

“Mobile carriers spend billions of dollars annually to enhance quality, expand coverage, and deploy new technologies throughout their networks,” he told the E-Commerce Times.

“While subscribers pay for using those networks, companies using those same networks to push ads and services to potential customers do so at the expense of subscribers, since they pay nothing,” Blasi explained. “When subscribers access a website or service and these ads are presented to them, the data they use is deducted from the subscriber’s mobile plan — and if an advertiser is sending video, that really eats away.”

Therefore, he reasoned, “having the advertiser pay could offset this usage the same way Netflix is paying to send its services over the networks or by giving subscribers the ability to opt out of the advertising.”

Controlling Content

Still, the technology would have great potential to violate FCC regulations on Net neutrality. They too are a work in progress, but there recently have been clear signs the FCC will strengthen its stance that content sent over their pipes is not to be controlled by ISPs, said James Brehm of James Brehm & Associates.

“They have to do some kind of inspection of the content, and clearly the network providers are controlling it by stopping the ads from displaying on the consumer’s device,” he told the E-Commerce Times.

The technology could have great potential for other applications, however, Brehm added.

“From how it has been described, it sounds like it has greater targeting abilities, and even could have the ability to offer value-add services. That is something consumers would love,” he said. “It could empower the carrier to be a much smarter pipe.”