LOS ANGELES—Two years after the Federal Communications Commission repeal of federal net neutrality rules, AT&T became the first major telecommunications company to openly defy the principles underlying those rules, by giving favorable treatment to a streaming service that the company owns — in a move that would have been specifically banned under the Obama-era regulations.
Specifically, AT&T is engaging in the previously prohibited practice of “zero rating,” which means exempting certain data services from the data limits imposed on customers, while continuing to charge customers for going over data caps by using competing services.
In this case, the service is the new streaming service HBO Max, which is owned — like HBO itself — by AT&T, which took control of the Time Warner Corporation in a 2018 mega-merger. Time Warner owned HBO, as well as Warner Bros movie studio, CNN, DC Comics, and several other media entities, all of which are now owned by the telecom giant. The HBO Max streaming service debuted last month.
Earlier this month, AT&T conformed that its cell phone customers who stream HBO Max — which costs a subscription fee of $14.99 per month — will not have to worry about exceeding their data caps, if the extra data is the result of using the new streaming service.
But AT&T customers who use their devices to stream Netflix, Amazon Prime, Pornhub or any other streaming service will continue to face extra charges for exceeding their data caps due to use of those services.
The move by AT&T prompted an inquiry from three U.S. Senators, Ron Wyden of Oregon, Ed Markey of Massachusetts, and Richard Blumenthal of Connecticut.
“The Trump FCC may have gutted critical net neutrality protections, but AT&T nonetheless has a responsibility to avoid any policies or practices that harm consumers and stifle competition,” the senators warned AT&T CEO Randall Stephenson in a letter sent last week.
Net neutrality rules are best known for banning telecoms from “throttling” data from certain services, while giving others an online “fast lane.” But the zero rating practice is also banned under net neutrality rules. With those rules repealed at the federal level, there is nothing the FCC can do to stop the practice.
A number of states, however, have their own net neutrality rules in place, or plan to enact legislation soon. In New York, Governor Andrew Cuomo announced that a net neutrality bill banning throttling and zero rating would be a 2020 legislative priority in that state.
How state-level bans would affect AT&T customers who are also HBO Max subscribers remains unclear.
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