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AT&T Ditches Sponsored Data: How Will HBO Max and AT&T TV Users Be Affected?

Zach Snyder's Justice League
(Image credit: WarnerMedia)

This week, AT&T ended its controversial “sponsored data” policy, which exempted use of the telecom’s streaming video services, notably HBO Max and AT&T TV, from counting against data caps of AT&T wireless and wireline internet products. 

It’s unclear as to specifically how many AT&T customers this will impact. But it doesn’t appear that it will be many.

On the mobile side, AT&T has been promotionally tying HBO Max only to unlimited data plans. Meanwhile, on the wireline side, the telecom has been bundling HBO Max, as well as its IP-based pay TV service, AT&T TV, with fiber internet products, which don’t have usage caps. 

AT&T does, however, employ usage-based pricing (opens in new tab) on non-fiber wireline internet products—a pricing policy that was suspended at the outset of the pandemic, but returned at the beginning of 2021. Notably, Comcast, the biggest ISP in the U.S, pushed back plans to reinstate a 1.2 terabyte usage cap.

AT&T has been phasing out DSL for some time, but it still reported 653,000 DSL connections as of the end of the second quarter of 2020, located in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee. These customers are capped at a very low overhead of 150 gigabytes of monthly data usage before having to pay an additional $10 for each additional 50 gigs they use. 

If these users are trying to stream video, 150 GB goes fast. 

Given that the fastest downstream speed offered for AT&T’s legacy DSL services is 6 megabits per second, it’s highly doubtful that there are a lot of AT&T DSL users even attempting to stream HBO Max’s premiere of the Snyder Cut Thursday in 4K/HDR. But they'll still use 0.9 GB an hour trying to stream base-level HD resolution (720p).

AT&T also caps its limited number of LTE fixed wireless customers at 350 GB. 

And, perhaps most importantly, AT&T Internet customers who have downstream speeds of 300 Mbps and below are capped at 1 terabyte. Of AT&T’s nearly 15.4 million wireline broadband users, fiber customers, uncapped with speeds of 500 Mbps and above, represent the fastest growing cohort. But most AT&T wireline subs still fall into the group capped at 1 TB. 

For the millions of customers in this group, streaming 4K content on services including HBO Max and AT&T TV will chew up about 7.2 GB per hour. According to OpenVault, a company that consults cable operators and telecoms about how their networks are used, 14.1% of U.S. internet customers exceeded an average monthly usage of 1 TB in 2020. That number will undoubtedly grow in 2021, most likely in a significant way. 

A Little Background

In 2014, AT&T introduced the concept of “sponsored data,” which allowed services running on its networks to pay for the privilege of having their customers’ data usage “zero rated”—meaning, it didn’t count against customer usage caps. 

Ultimately, the only services that really ended up using sponsored data were owned by AT&T. And this week, the telecom ended the practice, blaming California net neutrality laws aimed at protecting consumers. 

"Unfortunately, under the California law we are now prohibited from providing certain data features to consumers free of charge," AT&T wrote on its website. "Given that the Internet does not recognize state borders, the new law not only ends our ability to offer California customers such free data services but also similarly impacts our customers in states beyond California.”

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!