Tomorrow, AT&T joins #1 cable guy Comcast in capping bandwidth for its broadband subscribers. It’s a win win for AT&T, but not for its customers. Since Comcast replicates most of AT&T’s footprint, consumers face more of the same (albeit Comcast’s caps are less draconian) by making the switch to the lone alternative. This is what happens when corrupt regulators try to pass a duopoly off as an open, competitive market. Lacking any change or challenge to the status quo the consumers plight will get worse.
By longstanding tradition dating back to when the company was known as SBC, AT&T abhors investing in infrastructure. At the same time, the company has traditionally employed billing schemes to cleverly conceal price increases. It has gotten way with this when it hasn’t had to face any competition. The cap is more of the same. AT&T will be generating more income for existing infrastructure while reducing bandwidth expenses – even though the wholesale cost of bandwidth is paltry in comparison. It’s also worth noting that the cap is being rolled out at virtually the same time AT&T announced it will buy wireless competitor T Mobile. That fact alone makes the argument that AT&T can’t afford to beef up its infrastructure ridiculous.
AT&T’s new limits — 150 GB for DSL subscribers and 250 GB for UVerse users (a mix of fiber and DSL) — come as users are increasingly turning to online video such as Hulu and Netflix on-demand streaming service instead of paying for cable.
With the change, AT&T joins Comcast and numerous small ISPs in putting a price on a fixed amount of internet usage. It’s a complete abandonment of the unlimited plans which turned the internet into a global behemoth after the slow-growth dial-up days, when customers were charged by the minute and thus accessed the internet as sparingly as possible. (Wired) (more…)