Streaming Is Laying Bare How Big ISPs, Big Tech, and Big Media Work Together Against Users

HBO Max is incredible. Not because it is good, but because of how many problems with the media landscape it epitomizes. If you ever had trouble seeing where monopoly, net neutrality, and technology intertwine, well then thanks, I guess, to AT&T for its achievement in HBO Max. No one knows what it’s supposed to do, but everyone can see what’s wrong with it.

For the record, HBO Max is a streaming service from AT&T, which owns Warner Bros. and, of course, HBO. HBO Go, by contrast, is the app for people who subscribe to HBO through a cable or satellite provider. And HBO Now is a digital-only subscription version of HBO. HBO Max is, somehow, not HBO. It’s a new streaming service, like Disney+, offering both the back catalogs of HBO and Warner Bros. and new exclusives. The name, which emphasizes HBO and doesn’t alert people that this is a service where they can watch Friends, has been a marketing problem.

But the marketing problem, while hilarious, is not where the biggest concerns lie. The real problem is with AT&T offering HBO Max for free to customers with certain plans, not counting it against data caps for its mobile customers, and launching without support for certain TV devices.

Let’s go through what’s happening here piece by torturous piece. First: HBO Max is free if you are a subscriber to certain AT&T plans—high-speed home Internet, unlimited wireless plans, and premier DirectTV plans, to name a few. But Americans pay more for worse Internet than their peers in Europe and South Korea. With high-speed home Internet, most Americans have two or fewer choices. The most meaningful choice an AT&T home Internet subscriber in the U.S. makes is between expensive low-speed service or very expensive "high-speed" service.

This lack of choice means that there is no reason for AT&T or any of the other large ISPs to have a better quality product or better customer service. They know we will pay because in 2020, nearly all of us need Internet access at home. Any Internet service will sell just fine, and it's more lucrative, in the short term, for ISPs to offer slow, expensive Internet than fast, good Internet.

Given these high prices, HBO Max isn’t “free.” AT&T is already making money hand over fist on you, and now it gets to report AT&T premium customers as subscribers to its new streaming service to its investors, inflating growth.

Second: AT&T isn’t counting HBO Max against the data caps on its mobile plans. Data caps are artificial: they exist so that there can be more expensive plans, not to manage capacity. Not counting the data used by an app against a data cap is a practice known as a “zero-rating.” When an ISP zero-rates its own content and applications, or that of its favored partners, that violates the principle of net neutrality.

Net neutrality is the principle that all data online is treated equally by Internet providers, so that they can’t manipulate what you see online by blocking it, slowing it down, or prioritizing the data of privileged apps and services. In the case of AT&T and HBO Max, AT&T has a “sponsored data” program that allows companies to pay it to zero-rate their data. But when HBO Max does that, AT&T is just paying itself though a meaningless accounting convention that costs it nothing (unlike competitors who give it money for equivalent zero-rating treatment). AT&T does this all the time.

So if  Disney+ or Netflix—or, more importantly, a smaller company trying to compete with the big guys—wants their content to be on a level playing field, they will have to pay a fee that HBO Max does not.

This does not mean HBO Max is a better deal on an AT&T phone. You are paying too much for data already and, again, this trick helps drive AT&T’s subscriber numbers while not costing the company anything. It’s manipulative, too. It funnels AT&T customers who want entertainment but have artificially low data caps into AT&T’s own content. And according to Pew Research Center, those who rely on smartphones for Internet access are more likely to be young, Black, Hispanic, low-income, and rural.

Finally: HBO Max was launched without support on certain TV devices. Managing all these streaming services and subscriptions is a pain, and a lot of people do it with devices like Roku or Amazon Fire TV. Sometimes these are separate devices, and sometimes your so-called “smart” TV just came with one built-in. And guess what? If you have one, you weren’t watching HBO Max when it was launched. AT&T hadn’t made deals with those companies, so HBO Max won’t play on those devices. Remember how cable and satellite companies fight with TV networks over fees, sometimes leading to programming blackouts? Well, the same thing is now happening between streaming services like HBO Max and the makers of hardware and software for viewing them. So even if you have a “free” HBO Max subscription, you might not get to watch it on your Roku TV.

It wasn’t supposed to be this way. Cable and satellite TV services have almost always required subscribers to rent special hardware—that ugly, power-guzzling set-top box that you pay monthly rent for. In 2016, TV hardware and software makers asked the Federal Communications Commission to “Unlock the Box” by passing rules that would require cable and satellite services to make their channels available through whatever hardware and software the customer chose, using a set of industry standards for connecting those devices. TV studios and networks fought vehemently against that proposal. They argued that new rules were not necessary, because services delivered “over the top” through the Internet, like Netflix, Amazon Prime, and now HBO Max, would automatically run on all the consumer’s devices.

The outcome was easy to predict: Unlock the Box rules never came to be, and “over the top” apps like HBO Max don’t run on all devices—only the ones whose makers made deals with AT&T.

In the cord-cutting era, Roku and Amazon Fire TV have 70% of the market share for these kinds of devices. Users are stuck in the middle of a fight between giants just to watch content they supposedly get for “free” or have already paid for.

We need more choices for our ISPs, so they can’t keep charging us more for bad service. We need more choices so they can’t leverage their captive audiences for their new video services. We need net neutrality so these giant companies can’t create fiefdoms where they manipulate how we spend our time online. And we need our technology to be freed from corporate deals so we get what we paid for.

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