Blog Post

Bummer! AT&T Implements Broadband Caps

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

AT&T (s T) is planning to send out letters next week notifying subscribers about a coming broadband cap of 150 GB per month for DSL subscribers and 250 GB per month for U-verse subscribers, says company spokesman Seth Bloom in an interview at SXSW. The company says that the move will affect less than 2 percent of its customers, and customers who go over the cap will pay $10 for each 50 GB bucket of data. The cap compares with other broadband caps offered by Comcast (s cmcsa) and Charter (s chtr) and reflects AT&T’s experience trialing tiered broadband back in 2009.

Bloom emailed me the following statement:

We are committed to providing a great experience for all of our Internet customers. Less than 2 percent of our Internet customers could be impacted by this approach — those who are using a disproportionate amount of bandwidth. We will communicate early and often with these customers so they are well aware of their options before they incur any additional usage charges. Importantly, we are not reducing the speeds, terminating service or limiting available data like some others in the industry.

Bloom says customers who use more than the 150 GB or 250 GB cap will get a one-time grace period, but in subsequent months, they will be notified when they hit 65 percent, 90 percent and then 100 percent of their respective caps. Bloom said that in its tiered broadband trials in 2009, the 2 percent of customers who tended to go over the proposed cap used 20 percent of the bandwidth, and the average AT&T DSL customer currently uses 18 GB per month. He didn’t have information on the average U-verse customer.

As a general rule, we’re not fans of broadband caps at GigaOM, believing they can act as a brake on innovation. However, implementing a relatively high cap is far more preferable to implementing tiered pricing. When asked if the operator would raise the cap in the future if broadband usage spikes, Bloom declined to comment. We can only hope.

16 Responses to “Bummer! AT&T Implements Broadband Caps”

  1. James Karvey

    What I really dislike about these caps is that AT&T wants its customers tethered to 200 channels stuffed full of aggravating, demoralizing, and completely unwanted commercials.

    Trying listening to a FM radio channel and you will spend most of your time listening to advertising. Unfortunately, most of AT&T’s 200 hundred channels have the same problem – an obnoxiously high advertising content such that nothing is really worth watching anymore unless it’s seen from a recorded show that can be fast forwarded during the commercial breaks.

    This is what AT&T is protecting and this is the true end result that we will suffer through for another decade. Television content made worthless by endless commercials. Do you like CNN? Actually its called CNNN now – Commercials Not News Network because if you change the channel to CNN, the odds are greater than 50/50 that you will hit a commercial break.

    We are at the threshold of exchanging this tired (and tiresome), ultimately untenable video delivery system with a new model whereby we pay directly for what we want to watch without advertising. We do not need 200 channels. We do not need 500 channels full of content mangled by repetitious, idiotic, insulting advertising. What we do need is five to ten shows we like, some news programs, and the occasional movie without commercials.

    I would pay for that. There are companies poised to provide content directly to viewers commercial free. We have (or had) an Internet that makes that possible. But there are obstacles. First are large ISP’s that act like robber barons. Second are the government agencies (FCC, Justice Department, Congress, President) that act like sheriffs on the take. Frankly, I can’t tell if those agencies are clueless, gutless, or just plain owned by the corporations.

    We need to quit pretending we are powerless in this situation and realize that with principled and throughout regulation, we can indeed shape the society we want to live in. But first, let’s string up the thieves and replace the corrupt sheriffs and corrupt politicians. The sooner the better.

    We live in the 21st century, in the digital age. I will not be dragged back into the last century so some exec can have a bigger bonus and a second vacation home. End the corruption, regulate a vital national resource (a Free Internet is a Free USA), and force ATT and the cable companies to rescind the godforsaken cap.

  2. John Smith

    It is not surprising that ATT is doing this. Their greed is over taking their minds and they are forgetting that they told their current customers that they have UNLIMITED access.

  3. I am a Uverse customer. Here’s what is ridiculous about this announcement. If you look at your current AT&T Uverse bill there is no mention of how much broadband data you are currently using or have used. Perhaps they will add usage to the May bill. Thanks for the guidance AT&T!

    • Which begs the question, who’s going to ensure the “meters” are accurate? And what recourse will the consumer have if they feel the meters aren’t accurate? Can they turn to their state’s utility board? Will the state’s commerce commission step in? If I’m being billed by the amount of data I’m using or will be charged overages, the meters need to be accurate and transparent. Some what surprisingly, these questions have yet to be answered on the wireless side of data usage as well.

  4. Stremaing Video ads turn page loads into megs. This is not data I have asked for, but I am being charged more and more for it by an ISP for whom it is costing less and less to provide it.

    We’re not “extreme” users but easily, being a family of five, pass through 200gb or so a month with ease. Between my daughter’s WoW raids (voicechat and all can turn that into a couple of megs a minute both ways), netflix (which we are already paying for) and other services, it is obvious there is something sinister, if unfortunately not technically illegal (its not illegal if you wrote the laws and deregulated for that purpose after all), I more and more often feel like this can only end the same way the aristocratic bastards did in France.

    I’m tired of being massively overcharged TWICE for every movie.

  5. Seems like deregulation hasn’t worked all that well. Sure prices went down, then started creeping up, then exploding. Got the same pack of lies from cellular (oh, wait. AT&T does that, too…) “Caps are way above average use”, then I looked at my bill. Clearly I’m not average because my use was over the cap already. I don’t stream anything, use wi-fi when available, and texts charges are separate. Gotta call BS on this one. Now we have uncontrolled monopolies and no voice. I want to charge the cable companies for the use of my yard for cables that pass through it. How about that?

  6. It seems to me that broadband is like other utilities to the home. The more you consume, the more it costs the provider to give it to you. I read Om’s post and see his concern, but, I expect you all have never argued for flat-rate electricity or natural gas. I don’t think the development of Skype would have been hindered by a high cap.

    The rate could be flat instead of capped or tiered, but that flat rate would be so high a lot of us would be paying for capacity we don’t use.

    I, too, prefer capped rates to tiered rates.

    Turn off your HD stream. (Not you, personally.) Read a book. Talk to the neighbors. There’s more to life than Netflix.

    • I think Steve is right. My 56K dial up modem still works great and anybody that uses more bandwidth than I do doesn’t read enough or go outside.

      Anybody up for a game of kick the can? Shoot me a fax and we’ll meet up!

    • While there is an incremental cost to providing additional bandwidth (GB/month, not speed), its a bit disingenuous to compare it to utilities like electric, gas or water. Those are finite resources with higher production costs than it costs to “make” a GB of data. However there are carrier costs and other distribution costs associated with the infrastructure to get the data to the user.

      Given the distribution costs and the costs of maintaining and improving infrastructure, I’m not opposed to paying for what I use. I am opposed to flat caps and outrageous fees for additional usage. If the ISP wants to charge me $0.05/GB and possibly a $20/mo connection fee, I’d find that acceptable. But that will never happen because 97% of the users would pay significantly less than they are today.

      If ISP’s want to bill like a utility, then they need to price like a utility and be regulated like a utility since there is little to no competition in most markets.

  7. FactChecker

    The reason att is doing this is not because the of the cost of bandwidth but because they don’t want HD streaming over the Internet.
    A single HD movie can take up gigs of data, they are also a monopoly, you only have two ISP choices in town, your local phone company/cable, rural areas only have satellite which is limited, slow speeds, high latency, expensive, and capped, you can’t play games or talk on the phone with it (delay between requests). Many Americans have been using netflix or roko, so att’s move will limit it, smart business.

  8. Chris Albrecht

    Seems like that 2009 data would be obsolete by now with the explosive growth of Netflix streaming and similar OTT offerings over the past year.