Net Neutrali-what? AT&T's New Streaming Service Won't Count Against Its Broadband Caps. But Netflix Will.

from the fake-barriers-but-real-penalties dept

For a long time, we’ve noted how broadband usage caps are bullshit. They don’t actually help manage congestion, they have nothing to do with “fairness,” and are little more than glorified price hikes on the backs of captive customers in uncompetitive markets. Worse, they can be abused anti-competitively by incumbent broadband providers, one of the major triggers of the net neutrality debate.

For example, AT&T for a while has made its own streaming TV services exempt from its usage caps, while competing streaming services (Netflix, Amazon, whatever) count against a user’s monthly data allotment. This gives AT&T a distinct advantage in that users are incentivized to avoid competing services lest they face completely arbitrary and unnecessary usage limits and fees. It’s bullshit. It has always been bullshit.

AT&T has added another layer to this bullshit cake. The company has long experimented with something called “sponsored data,” which lets companies pay AT&T extra if they want to be exempt from AT&T’s (again, completely arbitrary and unnecessary) broadband usage caps. This adds yet another anti-competitive layer to the equation by letting a deep pocketed company (say: ESPN) get a distinct advantage over smaller startups that can’t afford to pay AT&T’s toll.

Last week AT&T launched yet another streaming TV service, HBO Max. This service also won’t count against AT&T’s usage caps and overage fees, AT&T confirmed to The Verge:

“According to an AT&T executive familiar with the matter, HBO Max is using AT&T?s ?sponsored data? system, which technically allows any company to pay to excuse its services from data caps. But since AT&T owns HBO Max, it?s just paying itself: the data fee shows up on the HBO Max books as an expense and on the AT&T Mobility books as revenue. For AT&T as a whole, it zeroes out. Compare that to a competitor like Netflix, which could theoretically pay AT&T for sponsored data, but it would be a pure cost.”

This has been a hard thing for some folks to understand (for whatever reason) so I’ll reiterate: this is a regional telecom monopoly, imposing completely unnecessary limits on uncompetitive markets, which don’t apply to the incumbent’s own services. Efforts to impose net neutrality have always been about preventing incumbent telecom monopolies from abusing their market power by imposing unnecessary barriers to competitors, and this is precisely that. Fortunately AT&T’s own incompetence has kept the company from dominating the streaming space so far, but it doesn’t make this any less of a bad precedent.

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Companies: at&t, netflix

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Comments on “Net Neutrali-what? AT&T's New Streaming Service Won't Count Against Its Broadband Caps. But Netflix Will.”

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25 Comments
Anonymous Coward says:

And we should expect better, why?

AT&T is a parasite. They have a giant monopoly and abuse that position at every opportunity. They’ve succeeded in having their captured regulatory agency strip itself of all authority over them. They pay off politicians left and right. They write their own legislation and have their bought politicians pass their laws. They bribe local governments to ban their compeitition.

Why should anyone expect that AT&T is anything but an illegitimate company on social welfare? Why should anyone expect that AT&T wouldn’t try to double and triple dip on it’s customers? Why should anyone expect that their shareholders are all they care about? Answer: They shouldn’t.

Whoever looks at Capitalism and says "Companies should only be accountable to their shareholders" should be locked in an insane asylum. Preferably one run by such a corporation so they will get the full experience of apathy that they are due. The public is the biggest shareholder of every company. Without the public’s funds, there is no return on investment. Our society needs to remember that and enforce it on these companies.

David says:

Re: Re:

Not per se: encrypted streams cannot be mirrored/replicated so they need the full bandwidth from sender to recipient. Associated services can communicate the unencrypted content to servers distributed across the country, allowing to take the multiplication of traffic off the backbones and make the "senders" doing the encryption sit a lot closer to the recipients.

Large companies like Netflix, however, do offer distributing servers under their control to network hubs. This model does not quite scale to an arbitrary number of services (and network providers) since of course the servers take physical space and other resources, so it only makes sense for local or major providers of such streaming services.

So there is an underlying rationale for different metering/billing to start with. Of course, something not being bullshit per se does not mean that you cannot turn it into bullshit per execution.

This comment has been deemed insightful by the community.
Anonymous Coward says:

Re: Re: Re:

And of course those who do not run their own CDN, as you describe, pay a CDN service to handle their content. Capacity is a big non issue these days, as everybody uses CDN of some form to distribute it.

There is no justification for data caps, or billing users extra for data the source has paid CDN and carriage fees for to get it to the ISPs.

Anonymous Coward says:

Re: Re: Re: Re:

What good will breaking them up do do, if all that achieves is local monopolies who will re-assemble themselves into larger monopolies. What is needed is effective regulation, which will be difficult to achieve while the heads of regulatory agencies are appointed by political patronage, and usually have an eye out for their next job in the industry they are meant to be regulated.

Until you get rid of the patronage at the top of agencies, you will have problems implementing effective regulation.

PaulT (profile) says:

Re: Re: Re:3 Re:

Yes and no. The ISP I use in Spain has that kind of integration yet we don’t have these problems. The difference is that they are faced with effective regulation that prevents them from abusing their position.

The problem is not that they have the potential to abuse their setup in the US, it’s that they’re permitted to do so.

This comment has been deemed insightful by the community.
Bloof (profile) says:

Hooray, the first stretch of the two lane internet is opening! Welcome to the Ajit Pai expressway, folks he’ll be along shortly to cut the ribbon via Zoom once he’s finished arranging for the tollbooths to be installed to make sure you pay for every mile.

The Zoom bandwidth will count towards your broadband cap so don’t spend too long watching.

fairuse (profile) says:

Ma Bell got a divorce and AT&T midlife crisis

Telecoms can’t help being what they are. Before DARPA experiment in distributed fault tolerant communications became pre-WWW, the phone companies owned the wired communications — There was a mess of data transfer methods and very expensive hardware.

Remember POT line price in minutes of use? Data cap is natural. HBO Max is the new trophy wife. Poor thing has HBO Go stepchild to cable, the ex-wives, AT&T TV with children from several hookups.

The HBO/Cinemax (Open Marriage) is in divorce – Actually the whole Cinemax production and development is pimped to streaming/cable without new original series – I expect it will be the wife that disappears.

Whatever I am paying to get old fun HBO/Cinemax on all platforms is al a cart now (Amazon Cinemax monthly), Xfinity Streaming HBO via apps and cable. What I cannot get is HBO Max on Amazon Prime/TV Stick/Kindle/OnePlus/iPads, and most likely iMac is too out of DRM date.

I will not signup, e.g. sign a contract with AT&T wireless Hotspot on Subaru Forester. That is like saying that Leopard won’t bite me.

Will T-mobile make some kind of deal for app? Sorry, that was a creepy thought.

HBO Max in the final form, in my case, is the crazy aunt that has many get rich schemes and make money by flipping low rent row houses is the latest.

Opinion Alert: Netflix, Amazon Prime Video, all the other OTT may not get pinched until AT&T build up is 4K HBO Max. Unlimited is not unlimited for At&T users (Does Cell data at 4G and [_G] cap?)

Will I dump Xfinity and rely on T-mobile 4G for all content. No. Xfinity streaming and catalogue are on all devices. I won’t get a bill; drunken sailor had a party and few hundred GB streaming over weekend – Netflix and Prime Video nonstop.

Exclusive Content: AT&T #FlimFlam ’cause the efficient new content production is thrown in the tower. Warner, that not so bright guy that keeps making bad streaming ideas is the last straw.

Unless there is magically the best thing ever product at a too good to be true price.
RIP HBO/Cinemax.

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