Policy + charging

AT&T to Fit Subs With Broadband Caps

AT&T Inc. (NYSE: T) is following in the footsteps of some of its cable competitors by installing monthly broadband consumption caps designed to keep bandwidth hogs in check.

AT&T will impose a new, monthly 150GB cap on all DSL customers and a 250GB cap on all U-verse subscribers starting May 2. AT&T will be alerting customers of the new terms of service between March 18 and March 31, according to DSL Reports.

AT&T is also looking to impose penalty charges on customers who regularly exceed the cap, but is stopping short of implementing a full metering policy on broadband services. The carrier will reportedly charge US$10 for every 50GB above the usage threshold, but has inserted a grace period of sorts as it will only ding customers if they exceed the new caps three times. As it does for wireless plans, the carrier will also tell customers when they reach 65 percent, 90 percent and 100 percent of their monthly allowance.

Instead of going with a tightly integrated usage-based billing model that has taken root in Canada but has historically been the cause of political and consumer firestorms in the US, AT&T is borrowing a page from some MSOs by going with a large consumption cap. Comcast Corp. (Nasdaq: CMCSA, CMCSK), for example, implemented a monthly 250GB cap on "excessive use" in October 2008, but doesn't charge customers for exceeding it. (See Comcast Draws the Line at 250GB.)

AT&T was not immediately available for additional comment.

Why this matters
The concept of metered billing in the U.S. has grown hot again following a new set of Federal Communications Commission (FCC) network neutrality rules that, some fear, could open the door to by-the-byte billing policies. Those rules may not stick, however, after a House panel voted for a bill to block them last week. (See Net Neutrality Rules in Jeopardy, The FCC Strikes Back, FCC Votes to Approve Net Neutrality Rules and Verizon Fights Net Neutrality Order.)

AT&T is clearly taking baby steps into the world of consumption caps and metered billing. It, along with Time Warner Cable Inc. (NYSE: TWC), used Beaumont, Texas, as a proving ground for metered, usage-based billing on broadband services, but pulled them back amid a highly publicized backlash. At the time, AT&T was testing out a 20GB cap on its low-end DSL package and a 150GB cap for its fastest offering, and then billing $1 for every GB consumed beyond the threshold.

For more
For more about the turbulent history of consumption caps and usage-based billing, please check out these stories:

— Jeff Baumgartner, Site Editor, Light Reading Cable

DCITDave 12/5/2012 | 5:10:33 PM
re: AT&T to Fit Subs With Broadband Caps

Fascinating story...

What is AT&T's plan to let its customers know how much bandwidth they're using daily? One worry here is that AT&T's U-verse customer service online is a patchwork quilt of systems from AT&T, Yahoo and AT&T Wireless that don't talk to one another and require customers to log in seveeral times per session.


Will AT&T have a plan for using the tools most convenient to consumers -- Twitter, texting, email, etc. -- to help them watch their b/w consumption? Will they warn folks before going over the cap?

More importantly, what offers will cable companies use to possibly win customers away from AT&T?

Jeff Baumgartner 12/5/2012 | 5:10:32 PM
re: AT&T to Fit Subs With Broadband Caps

I agree with you there. Comcast's meter is not very easy to find... I never seem to remember exactly where it is so I end up having to dig around for it.  Plus, I don't frequent their customer portal all that much, so it's just an extra layer to have to drill through.  A simplified app would be a welcome addition. JB




Jeff Baumgartner 12/5/2012 | 5:10:32 PM
re: AT&T to Fit Subs With Broadband Caps

Right, I doubt we'd see AT&T shaming people in public via Twitter if they were close to hitting the cap, but I suppose they could send customers a direct message to customers via Twitter, or a note to their LinkedIn or FB accounts.  If they went in that direction, subs would probably have to opt-in and perhaps give AT&T preference on how they'd like to get those alerts. JB



Jeff Baumgartner 12/5/2012 | 5:10:32 PM
re: AT&T to Fit Subs With Broadband Caps

We'll have more on this soon, but AT&T will be using several methods to help customers track their broadband usage, including meters, and alert them when they are getting close to the cap.   Email mentioned, but they haven't revealed any plans to use a tool like Twitter.

As cable's competitive response goes, they may avoid overage charges that go beyond these large caps, but there seems to be some support growing for usage caps and overage charges on low-end tiers. JB



somedumbPM 12/5/2012 | 5:10:32 PM
re: AT&T to Fit Subs With Broadband Caps

Twitter??? -will ATT be sending out my cap messages to a mass crowd?

Since I am adverse to Social Nets, and thus lacking knowledge, I am failing to understand some of the things I am starting to read.  

After reading about how someone was impressed how Facebook may have boosted services with the event in Japan in another article, I wonder if there is a Facebook Transport Network or a large bank of Facebook servers and/or data repository located in the area affected or is that I am missing some other details about how these things work?  I am unsure how people connected without a carrier network.

ethertype 12/5/2012 | 5:10:32 PM
re: AT&T to Fit Subs With Broadband Caps

Hard to believe it took them this long.  The logic of non-discriminatory, high usage caps has been obvious for years and the rest of the world has long since put them in place.  Meanwhile, U.S. carriers were off doing utterly stupid things instead.  Comcast only figured out that high caps were the right answer after being caught breaking P2P apps in the dark and inviting FCC intervention.  Meanwhile over at AT&T, Ed Whitacre stuck both feet in his mouth by saying Google, et. al. were "not going to use my pipes for free," which only served to confirm net neutrality advocates' worst fears and prevent AT&T from doing ANYTHING about heavy users for fear of further backlash.


Hello, Verizon, can  you hear me now?  Time to join the party and stop pretending that FiOS is truly "unlimited".

paolo.franzoi 12/5/2012 | 5:10:32 PM
re: AT&T to Fit Subs With Broadband Caps

I have a bandwidth cap with both AT&T Mobility for my netbook and Comcast for my cable modem.

My netbook has an app that it uses to manage connectivity.  It gives me a simplified view of my bandwidth usage all the time.  It gives me a detailed view if I ask it.

Comcast requires me to log into their site with my ID.  It is a pain in the butt to locate my bandwidth cap on their site.



Jeff Baumgartner 12/5/2012 | 5:10:31 PM
re: AT&T to Fit Subs With Broadband Caps

Also Comcast's consumption cap wasn't a known quantity until  the fall of 2008.  Before that there was a monthly cap, but customers didn't know much about it, including how much consumption was allowed, until after this "invisible" cap was exceeded  It's good that everyone's being transparent about these numbers now, but it only started to happen after customers complained about being in the dark on it. JB

FbytF 12/5/2012 | 5:10:30 PM
re: AT&T to Fit Subs With Broadband Caps

It's not data caps its revenue seeds.  AT&T says the data cap will affect less than 2% of users.  Well that's in todays terms.  Everything we know and hear tells us data usage will continue to grow.  So AT&T puts a data cap plan into effect when it affects very few users but a couple years down the road and those revenue seeds start to hit more and more users and AT&T harvests the new revenue.  Does AT&T mention anything about the data caps growing as network capacity grows?  Of course not. Do they say the cap will only apply to the top 2% of users? Of course not.  So they implement caps when it will attract the least noise. The muggles all read the article and say, "oh well, doesn't affect me".   Lambs to the slaughter.

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