AT&T puts broadband users on monthly allowance

AT&T broadband users will soon face a cap on the amount of internet data they can download a month.
Traditional DSL users will be capped at 150 GB per month, while subscribers to the fiber-backed UVerse system have a 250-GB limit. Usage over that will be charged at $10/month for 50 GB, the company says.

The company says that currently only a small percentage of users -- around 2% -- use this much data a month. If that's the case, it's not clear why the company is bothering to install the caps.

It is, however, the same rationale (and the same usage stat) that the company relied upon to explain why it would be capping iPhone data plans last summer, which had hitherto been "unlimited."

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DSL and UVerse connect fairly directly to a hub -- unlike cable connections where users share a local loop that can become congested. Bulk-bandwidth costs for an ISP are a tiny portion of its business costs, and those prices continue to fall even as users consume more and more data.

So, how could a user end up hitting these caps? Streaming video such as HD movies from Netflix, using bittorrent to download movies and heavy gaming with services like Steam can easily eat up lots of data, especially in households with multiple heavy internet users.

AT&T isn't the first large broadband provider to impose caps. Comcast imposed a 250-GB cap shortly after the company was caught throttling bittorrent downloads.

Time Warner Cable tried going further with trials of a service that imposed very low limits for users, which led to a furor among users and lawmakers.

There's little data to demonstrate whether large ISPs actually are experiencing real issues with congestion. Skeptics see the limits as ways to discourage cable video customers from "cutting the cord" and getting their video online, or as a way to pocket profits instead of re-investing in bulking up their infrastructure.


Derek Turner, the research director for the net neutrality advocacy group Free Press says the limits will discourage online innovation, and that with the growth curve of internet usage, the limits will soon catch many internet user.

"When ISPs force their customers to watch the meter, experimentation, innovation and business will suffer," Turner said.

"AT&T's actions are another troubling symptom of a broadband market that lacks meaningful competition, and this move may be the start of a race to the bottom among other providers to see who can squeeze its customers the most. At worst, this is a plan designed to discourage cord-cutting and pad profits; at best, this is another example of an antiquated phone-company business model being forced onto an otherwise vibrant and limitless marketplace."