AT&T Jumps Into The Metered Broadband Pool; 150 Gig Limit For DSL

AT&T Jumps Into The Metered Broadband Pool; 150 Gig Limit For DSL: "Over the weekend, Broadband Reports broke the story that after plenty of talk about it, AT&T is implementing broadband caps and overage fees. The caps are 150GB per month for DSL and 250GB per month for U-verse. AT&T claims that it's trying to be flexible, and the cap isn't quite a "hard cap." That is, subscribers will only be expected to pay overage fees if they go over the cap 3 times. But, if they do, the overage fees kick in, and it's $10 per 50 additional GB. AT&T had tested similar caps in the past, but the decision to implement these on a wider scale is pretty much the company publicly admitting that there isn't enough competition in the market, so it can put in place these kinds of limitations.



Now, I'm sure that plenty of people will say that 150GB is pretty high, and AT&T itself claims that only 2% of its current users tend to go over that amount. But... that's today. There are a large number of new apps and new uses for the internet that are increasing our use of broadband, and putting caps and meters on the end risks slowing down innovation in very serious ways. If people suddenly have to be worried about testing out some new high bandwidth streaming app, because they're afraid to make use of their connection, that risks harming a variety of potentially useful new apps and services. I know that, for example, once Sprint put caps on its EVDO/3G data service, I massively decreased my use of it (even though I don't think I ever came near the caps) just because I didn't even want to have to think about the risk or the fact that a single click might drive me much closer to the cap and overage fees. That mental transaction cost can be quite big, and I don't think the broadband providers recognize how powerful it can be.



Once again, the real issue here is the lack of competition. Despite claims to the contrary, plenty of places still really only have a single provider, and those that don't often are limited to just a single other provider (cable), with many of the providers there offering caps as well. AT&T is claiming that it's doing this to stop congestion on the network -- and even told the WSJ that bandwidth hogs were clogging the network -- but folks like Dave Burstein who follow this issue closely claim that congestion is minimal and that AT&T lied to the WSJ (who, it should be noted, didn't appear to question the claim).

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