That creates an incentive for ISPs to keep low data caps and keep unlimited plans expensive. More important, as Professor Barbara van Schewick of Stanford Law School observed in an interview, “Zero-rating only works when you have a low data cap. After all, no smartphone user wants to hit the data cap in mid-month.
I’m sure AT&T could charge its subsidiaries the same amount for its sponsored data service as it charged the likes of Hulu and Netflix, but moving money from the left corporate pocket to the right is hardly the same as collecting cash from a competitor.Īnd it should go without saying that the sites not paying to be exempted from the data caps are at a huge disadvantage relative to AT&T’s services and its partners’ offerings. That’s because all of those companies own streaming video services that compete with the ones they’re charging to circumvent their data caps.ĪT&T, for example, owns DirecTV and WarnerMedia, along with the streaming services they operate. In fact, it may be impossible for a major cable or phone company to do it without tilting the competitive landscape, which is when zero rating becomes a net neutrality problem. But in practice, it’s hard to do a version of zero rating like AT&T’s “sponsored data” program in an evenhanded way. And I don’t think zero rating is inherently evil. Nevertheless, it’s a good thing, and it helps demonstrate the value of the state’s net neutrality law in promoting a free and open internet.įor the record, AT&T insists that it supports an open, competitive internet. In truth, AT&T’s move could pinch some mobile users who are active streamers. That’s easy enough to do at home not so easy while, say, waiting in line at the mobile vaccination site.
So from now on, AT&T customers hoping to stream HBO Max’s “Justice League” on their phones will have to do so at the expense of their monthly data allotment unless they can find a WiFi connection. They can exempt applications from data caps (a practice known as “zero rating”), but only if they do so for every application at no charge to the provider. In particular, the “Data Free TV” program enabled customers to stream video from selected services, including AT&T’s own HBO Max, without using up their monthly data allowances.īut under California’s law, internet providers can’t charge sites and services for that sort of thing.
But those consumers may not be so pleased with the results.ĪT&T informed its nationwide cellphone customers on Wednesday that it was ending a program that allowed websites and services to buy their way around AT&T’s data caps.
Having survived an initial court challenge, California’s net neutrality law is having its first tangible effects on consumers and their internet service providers.
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