It happened first with wireless data plans, but now AT&T is the first provider to implement broadband data caps. This will affect both AT&T DSL and U-Verse customers.
AT&T Inc. confirmed that starting May 2 it will impose a monthly data cap of 150 gigabytes on users of its DSL broadband service. Subscribers to its U-Verse service get 250 gigabytes a month. Consumers who go over this limit three times will be charged $10 for every 50 additional gigabytes of usage.
This is different than what Comcast does which is basically shut down service for customers once they go over the 250GB limit.
The story goes on to say that this will affect only 2% of current customers so it appears initially this is not that big of a deal. However, I don’t like it (and I’m not even an AT&T customer). Here are several reasons why:
- This is a move designed to affect behavior. Psychologically, people are going to change how they use their broadband when they know the meter is running. It doesn’t matter if they don’t come close to the caps.
- AT&T says, “the vast majority of subscribers won’t come close to 150 gigabytes per month with typical e-mailing, Web surfing and casual video watching.” Well, what defines “casual video watching”? How does one measure that? This comes off as a way to scare some people who have “cut the cord” (rid themselves of their television packages) to go back to paying for their television packages.
- Customers have been hoodwinked. Consumers have been subscribing to streaming services, purchasing tablets, netbooks and other streaming ready devices under the assumption all of these devices would be able to stay connected with the value of a fixed price each month.
This piece at ARS Technica has some excellent info. One thing I noticed was the bandwidth usage for a typical HD stream is about 2GB an hour. If you’re an AT&T U-Verse customer, your cap will be 250GB per month. Assuming an average length of 2 hours, one would have to watch nearly 63 HD movies per month to hit that cap. It sounds like a lot. But, when you add the movies, other HD content and all of the SD content, it is not out of the realm of possibility to see many households over time bumping up against those caps especially with more and more people turning to the Internet for their entertainment needs.
Consumers have been presented with tiered levels of broadband and many consumers (like me) opt to may more per month for faster speeds. Why? Largely because we want optimal speed to watch streaming content. Other providers are going to be watching those closely. If there is no backlash, other ISP’s will undoubtedly follow suit.
Thoughts?
Stephen Bateman says
I think the US may take a trip through limited internet, but since the marginal cost of producing a GB of internet juice is so low, eventually we’ll be back to unlimited.
Now that may be different for Canada, that legislation sucks.
Ben Miller says
It’s very interesting. I am now in the market for DSL service at my house, and one of the two companies I am considering is AT&T. My reflex reaction is to be opposed to the data caps. However, here is how I see it. When lots of their customers are using lots of bandwidth at one time, AT&T’s costs go up. So they have a few options: They could increase their prices for everybody, or they could increase their prices for their biggest users. So they have chosen the second option. And if they lose the customers that use the most resources, they could actually come out better financially than if they keep them.
Now that I’m evaluating DSL, here are the two options for my house, at the speed I’m looking for:
AT&T: $20/month for the first year ($40/month regular price)
Company B: $50/month
Even with the data caps, it would be pretty difficult to justify going with Company B. I don’t think I’m going to get very close to the data cap, but even if I did, it would still be cheaper with AT&T. Company B seems to have gone with the “increase prices for everybody” option.