With the ISP’s cost of delivering a gigabyte at an all time low and that price continuing to trend downward, AT&T isn’t happy with the status quo. People are still using more bandwidth than they did a decade ago and they aren’t paying more to use AT&T’s tired old network. AT&T’s few upgrades were done to enable pay TV. The number of consumers willing to pay large for that stuck in the 90′s service is shrinking fast. That very same company that has stubbornly refused to upgrade its capacity to accommodate the realities of the new century will begin charging its heaviest users more adding insult to injury:
Ladies and gentlemen, the days of unlimited broadband may be numbered in the United States, and we’re not talking wireless this time — AT&T says it will implement a 150GB monthly cap on landline DSL customers and a 250GB cap on subscribers to U-Verse high speed internet starting on May 2nd. AT&T will also charge overage fees of $10 for every additional 50GB of data, with two grace periods to start out — in other words, the third month you go over the cap is when you’ll get charged. DSLReports says it has confirmation from AT&T that these rates are legitimate, and that letters will go out to customers starting March 18th. (Engadget)
AT&T has been losing heavier users to cable for the last decade thanks to feeble bandwidth and high prices. Look for the remaining few that have that option to flee. That is if cable doesn’t respond in kind. Without competition and a government that has not shown any interest in enforcing anti trust, its very possible we could all be in for a rate increase regardless of our provider.
Yes, I said rate increase. Make no mistake about it. 150GB in the average connected household is a pathetically small number. The wholesale cost of that bandwidth via backbone provider is pennies. Prices are already tiered by providers. Heavy users almost always willingly pay more for bigger bandwidth. If the move was really intended to benefit lower bandwidth users, then AT&T would have offer them a lower priced tier. This so called cap is simply a billing gimmick designed to pump up sagging revenues in a poorly managed monopoly. It’s the same ploy AT&T masterfully played post deregulation to increase the average land line phone bill. In the average household that bill nickel and dimed its way from under $20 up to nearly $100 before that business finally collapsed under its own weight. At the same time, the cable guys were only too happy to offer a better, but still overpriced deal. Lets hope cable chooses that path again.
None of this would happen without the aid of our elected representatives and their appointed bureaucrats. The telco lobby has rewarded them handsomely for looking the other way while it kept prices artificially high and held us to a technological disadvantage. I think it’s about time the feds start looking out for the rest of the people they supposed to be working for. If we had a slightly more competitive market, AT&T as we know it today could not exist. It’s time to restore line sharing AKA local loop unbundling.