- Three Democratic senators are asking AT&T for answers over its decision to strike a “sponsored data” deal with HBO Max, which stops the streaming service from counting toward customers’ data caps.
- Sens. Edward Markey, Richard Blumenthal, and Ron Wyden said the move takes advantage of the rollback of net neutrality protections, and that it could stifle competition and hurt consumers.
- AT&T noted that its “sponsored data” is available to any other company for purchase, though the senators criticized that the transactions are occuring within the same company.
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Three Democratic senators are raising net neutrality concerns over AT&T’s decision to strike a data deal with HBO Max, the newly launched streaming service owned by AT&T.
In a letter to AT&T CEO Randall Stephenson on Thursday, Sens. Edward Markey, Richard Blumenthal, and Ron Wyden asked the telecom giant for answers over its move to not count HBO Max toward customers’ data caps.
AT&T’s maneuver, first reported by The Verge, directs HBO Max to buy “sponsored data” from AT&T, which allows the streaming platform not to count toward data limits, encouraging consumers to use the service without worrying about going over their monthly data allotment. In return, AT&T claims the purchase as revenue, and the dealings cancel out because HBO Max is owned by AT&T.
“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,” the senators wrote.
The senators said that while the Federal Communications Commission, under the Trump administration, moved in 2017 to repeal net neutrality protections, AT&T’s maneuver could still raise potential antitrust concerns.
Net neutrality protections had previously mandated that internet service providers, like AT&T, should treat all internet communications the same and not give preferential treatment to certain websites or services, including by means of charging for it.
“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 wrote, citing the report from The Verge. “We urge you to provide us with an explanation for the behavior described above by June 25, 2020.”
An AT&T spokesperson told Business Insider in response to the letter, “Our wireless subscribers can stream HBO Max video without incurring data charges, which will save money for millions of consumers. This is based on a Sponsored Data arrangement and is a program we offer on the same terms to any entities who wish to sponsor data for their customers. This is similar to arrangements some of our competitors have.”
As AT&T notes, its “sponsored data” is available to any other company for purchase, though the senators criticized that the transactions are occuring within the same company.
“Although HBO Max may technically be paying for this benefit, AT&T is essentially paying itself,” the senators wrote. “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.”