AT&T Violates Net Neutrality Principles With HBO Max, Lawmakers Say

AT&T is facing criticism on Capitol Hill over the decision to exempt HBO Max streaming video from wireless subscribers' data caps.

“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,” Sens. Ed Markey (Massachusetts), Ron Wyden (Oregon) and Richard Blumenthal (Connecticut) said in a letter sent Thursday to CEO Randall Stephenson.

The letter comes around one week after AT&T launched HBO Max, the new streaming video service that offers HBO programs as well as non-HBO television shows and movies, including “Friends,” “The Big Bang Theory,” “Crazy Rich Asians” and “Shazam.”

AT&T is “zero-rating” all HBO Max content for wireless customers -- meaning that those customers can stream HBO Max programs without burning through their monthly data allotment.

When those same customers stream videos from other services, like Amazon Prime or Google Play, the data counts toward customers' maximums.

The lawmakers tell Stephenson that the zero-rating policy -- which gives consumers an obvious incentive to subscribe to AT&T-owned HBO Max over competing video providers -- appears to violate net neutrality principles.

“Although your company has repeatedly stated publicly that it supports legally binding net neutrality rules, this policy appears to run contrary to the essential principle that in a free and open internet, service providers may not favor content in which they have a financial interest over competitors’ content,” they write.

Controversies over data cap exemptions are nothing new for AT&T. Back in 2013, the telecom pioneered “toll-free data” by allowing partners to pay for their data to be exempted from consumers' monthly caps. Several years later, after acquiring DirecTV, the company exempted DirecTV video streams from wireless data caps.

During the Obama era, the Federal Communications Commission said AT&T's zero-rating scheme appeared to violate the then-existing net neutrality rules.

Those rules, which were repealed by the current FCC, broadly prohibited broadband carriers from blocking or degrading service and from creating online fast lanes. The regulations also banned carriers from engaging in conduct that interferes with people's ability to access web content.

In January of 2017, shortly before leaving the FCC, former chairman Tom Wheeler told lawmakers that AT&T's zero-rating program “may harm consumers and competition by unreasonably discriminating in favor of downstream providers owned or affiliated with the network providers.”

Three weeks later, current chairman Ajit Pai closed the FCC's investigation into zero-rating.

For its part, AT&T says the zero-rating scheme will benefit consumers. “Our wireless subscribers can stream HBO Max video without incurring data charges, which will save money for millions of consumers,” a company spokesperson says.

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