By Karl Bode
For years now, AT&T has imposed arbitrary broadband monthly usage caps and costly overage fees — but not if you use the company’s own streaming TV service. As a result, when you use AT&T’s own streaming TV platforms, you won’t see any limits. But try to use an AT&T competitor like Amazon, Hulu, or Netflix, and you’ll face monthly limits and usage surcharges. Like many big ISPs, AT&T has temporarily lifted its caps on fixed-line broadband networks, but is expected to quietly return to the practice once things semi-normalize.
AT&T has confirmed that the same approach will be applied to AT&T’s latest streaming TV service, HBO Max. Use AT&T’s broadband service and AT&T’s HBO Max? No arbitrary, unnecessary, or costly restrictions. Use AT&T’s broadband service but want to use Netflix instead? Suddenly you’re facing annoying restrictions and a higher monthly bill. AT&T also lets deep-pocketed companies pay for exclusion from usage caps, something that disadvantages smaller competitors.
AT&T’s been doing this for several years without penalty, so the extension to its newest streaming service isn’t surprising. But last week Senators Ron Wyden, Ed Markey, and Richard Blumenthal fired off a letter to outgoing AT&T CEO Randall Stephenson (pdf), asking the company to explain how giving preferential treatment to its own services isn’t a terrible precedent:
“According to AT&T, HBO Max is benefiting from AT&T’s “sponsored data” system, which allows content companies to pay AT&T for the right to be exempt from data caps. Although HBO Max may technically be paying for this benefit, AT&T is essentially paying itself. This practice of allowing one arm of your company to “pay” another arm of your company for preferential treatment attempts to mask its true impact. 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. We urge you to provide us with an explanation for the behavior described above by June 25, 2020.”
Several other ISPs (like Comcast) have engaged in similar behavior. When pressed, they’ll usually trot out a pseudo-technical justification for the practice, insisting that because much of this traffic only touches an ISP’s own network, usage caps need not apply. That’s not only nonsensical, it ignores the fact that there’s simply no technical justification for caps and usage charges in the first place. None. Such limits don’t manage congestion. They’re simply arbitrary price hikes imposed in uncompetitive markets. And they’re not a useful price differentiator either (that’s what speed tiers and business class service is for).
AT&T knows full well that since its lobbyists just got done convincing the FCC to effectively not just gut net neutrality rules but also the FCC’s authority over telecom, there’s nothing the FCC can do about any of this. And users can’t really punish AT&T via “the market,” because they have no competing ISP to flee to. That leaves either Congress, which is awash in AT&T campaign contributions (making it extremely unlikely we see a net neutrality law anytime soon), and states, whose responses will range from inconsistent to nonexistent.
However folks attempt to justify this, it’s an entrenched telecom monopoly imposing arbitrary limits, then selectively removing them to give their own platforms an unfair market advantage. And because AT&T has incredible sway over the lion’s share of regulators and lawmakers, nobody’s going to do a damn thing about any of it beyond a few polite letters.