AT&T says its customers will no longer be able to stream HBO Max for free, citing California's net neutrality law
AT&T customers who stream HBO Max will now have it count against their data plans.
The change comes after a federal court upheld California's net neutrality law.
The change "impacts our customers in states beyond California," AT&T said.
AT&T will now start counting steaming video on HBO Max towards its customers' data allowances.
The change comes after a federal court said that California can enforce its net neutrality law, which prevents Internet Service Providers from blocking or slowing down traffic to particular applications or websites. California's law also bans "zero-rating" or "sponsored data" plans that allow ISPs to exempt some services from a user's data cap.
AT&T said in a blog post on Wednesday that the new measure means it can no longer provide certain services to its customers for free. That includes the HBO Max streaming service that the company developed when it merged with Timer Warner in an $85 billion deal in 2018.
The telecom company also dismissed as "unworkable" California's net neutrality law, one of a handful of such laws that states have enacted.
"A state-by-state approach to 'net neutrality' is unworkable. A patchwork of state regulations, many of them overly restrictive, creates roadblocks to creative and pro-consumer solutions," AT&T said in its blog post. The change will also be applied beyond California, AT&T added.
Prior to the California net neutrality law, companies in that state were allowed to "sponsor" or pay for the data usage of their customers who are also using AT&T services. Those customers were able to stream applications without being charged from their AT&T data allowance, the company said in the blog post.
AT&T will not offer Data Free TV for free anymore starting March 25, according to CNBC.
Net neutrality is the idea that internet service providers should deal with data equally, free, and open regardless of platform, application, device, or user.
After the Trump-led Federal Communications Commission voted in 2017 to repeal the widely popular Obama-era net-neutrality protections at the federal level, California lawmakers passed their own version of the bill.
But the Trump administration challenged California's rules, as did internet providers including AT&T, Verizon, Comcast, and Charter Communications.
Last month, a federal judge upheld the state's law. The Department of Justice in February dropped its legal challenge to the California measure.
Public opinion polls have consistently shown that the overwhelming majority of Americans - including both Republicans and Democrats - support net neutrality. Opponents, including ISPs, broadband and telecommunications companies, say the rule makes big tech companies like Facebook and Amazon even more powerful.
Last year, three senators sent a letter to AT&T CEO Randall Stephenson about net neutrality concerns after the company decided to strike a deal with HBO Max, Insider previously reported.
The senators were concerned that AT&T's HBO Max plans act against the concept of free and open internet and that internet service providers shouldn't favor content " in which they have a financial interest over competitors' content," they wrote.
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