March 15, 2011

AT&T Sets Monthly Data Caps For Broadband Customers

AT&T said on Monday that it would limit the amount of data its broadband subscribers can use each month in an attempt to rein in "data hogs".

Beginning May 2, the company will impose a monthly data cap of 150 gigabytes on users of its DSL broadband service, while U-verse subscribers will be limited to 250 gigabytes a month.

Customers exceeding those limits will be charged an extra $10 per 50 gigabytes.  However, the company said it would repeatedly alert subscribers as they reach 65%, 90% and 100% of their limit, and would not impose the extra charges until customers exceed the caps three times.

AT&T said that average monthly bandwidth consumption for its DSL customers is 18 gigabytes, with just 2 percent exceeding the new limits. 

Only "those who are using a disproportionate amount of bandwidth," would be affected, the company said.

Frequent videoconferencing or downloading of high-definition movies and file sharing could cause some subscribers to reach the new limit. 

Customers will be formally notified of the new policy this week, AT&T said.

Most U.S. Internet service providers have already adopted similar policies in capping subscribers' data traffic, although very few charge extra when the limits are exceeded.

Rather, subscribers are warned and then kicked off if they fail to curtail their data usage.

In 2008, Time Warner Cable Inc. attempted to enact data caps at much lower levels than AT&T is proposing, charging $1 per gigabyte of overage.  However, subscriber backlash forced the company to abandon the idea.

AT&T ran a similar trial in a few areas, but with higher limits.

Analysts view data usage limits and overage fees as a way for cable operators and telecom companies that sell TV services to defend the value of their networks.  If subscribers switch over to watching TV via the Internet, the service providers will still get paid through overage fees.

AT&T's caps were first reported over the weekend by the blog Broadbandreports.com.


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