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TMCnews Featured Article


May 02, 2011

AT&T to Cap Broadband Usage, Will Trades Be Allowed?

By David Sims, TMCnet Contributing Editor


Capping seems to be a popular way of dealing with usage these days, doesn’t it? First there was proposed cap and trade for “global warming,” now comes news from industry observer Todd Spangler that AT&T (News - Alert) set to implement usage caps and overage charges for all high-speed Internet customers Monday.


It will apply to more than 42 million broadband subscribers in the U.S., Spangler says, adding that they “will be subject to explicit pre-set limits on how much bandwidth they can use on a monthly basis. All told, approximately 56 percent of the country's 75 million broadband subscribers will have some form of caps, according to a Multichannel News analysis based on Leichtman Research Group's subscriber estimates for the fourth quarter of 2010.”

As Wired notes, shed a tear: “The No. 2 carrier’s entry into the broadband-cap club means that a majority of U.S. broadband users will now be subject to limits on how much they can do online or risk extra charges as ugly as video store late fees.”

AT&T claims the caps will affect a “small percentage” of “top users,” but much like government claims that a new tax will hit only “the very rich,” the pain’s going to be a lot more widespread. FierceTelecom writes that Phillip Dampier, leader of consumer watchdog group Stop the Cap, poses the sensible question

“AT&T likes to claim these caps will only impact a tiny percentage of their customers. If true, why impose them at all?”

Dampier finds it much more likely that AT&T's simply trying to “protect its U-verse revenue from over the top (OTT) online video services like Netflix and Hulu (News - Alert),” FierceTelecom writes.

It’s not like this is the first time anybody’s thought of this. Spangler notes that other major U.S. broadband providers have caps in place, including Comcast, Cox (News - Alert) Communications and Charter Communications and presumably others whose names don’t start with “C,” but they’re a bit kinder and gentler about it all: “They warn users who exceed the limits rather than charge them for the extra usage.”

Goodbye to all that.




David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Jennifer Russell


 
 
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