AT&T blames net neutrality law for HBO Max counting against data caps

California's rules prohibit "zero rating" or sponsored data streaming.

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AT&T has announced that subscribers will no longer be able to stream HBO Max without the data counting against their caps, and has blamed the situation on California's net neutrality laws. "We regret the inconvenience to customers caused by California’s new 'net neutrality' law," the company wrote. "Given that the internet does not recognize state borders, the new law not only ends our ability to offer California customers such free data services but also similarly impacts our customers in states beyond California."

California's net neutrality law was passed in 2018, but only recently cleared for enforcement after a judge shot down challenges by the state's largest internet providers. The law bans a practice called zero-rating, which allows operators like AT&T and Verizon (Engadget's parent) to exclude their own content from data caps, essentially putting other streaming services at a disadvantage.

Operators are also prohibited from offering paid zero-rating or speed prioritization ("fast lanes") for select services. When AT&T announced that it would exclude HBO Max from its data caps last year, it said that Netflix and any other streaming services could also be excluded — provided they paid a fee.

People should be free to choose which videos they want to watch - whether that’s Netflix, Twitch or their local church’s Sunday service, without the company they pay to get online trying to influence their choices.

AT&T implied that the law was hostile to its customers and said (as it has before) that it's in favor of "clear, consistent and permanent" federal net neutrality rules. "A patchwork of state regulations, many of them overly restrictive, creates roadblocks to creative and pro-consumer solutions," the company wrote. "We deliver the content and services our customers want because it’s what they demand, not because it’s mandated by regulation."

California's legislators, however, said last month that zero-rating and other pay-for-priority schemes are very much consumer-hostile. "The ability of an internet service provider to block, slow down or speed up content based on a user’s ability to pay for service degrades the very idea of a competitive marketplace and the open transfer of information at the core of our increasingly digital and connected world," said California Attorney General Xavier Becerra.

Stanford University professor Barbara van Schewick, who has long advocated for net neutrality, also said AT&T's elimination of HBO Max zero-rating is actually a good thing for consumers. "This is a win for an open and free internet, including for competing video services and internet users," she wrote. "People should be free to choose which videos they want to watch — whether that’s Netflix, Twitch or their local church’s Sunday service, without the company they pay to get online trying to influence their choices."

van Schewick added that zero-rating incentivizes ISPs to keep data caps low and unlimited plans expensive. "For example, in the European Union, ISPs that don’t zero-rate video give subscribers 8 times more data for the same price than ISPs that zero-rate video," she noted.

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