AT&T to Cap Internet Usage, Bill for Overages
AT&T will cap Internet usage among its DSL and U-Verse customers and will charge customers who go over their monthly limits, it was announced Monday. Landline customers will be capped at 150 GB per month and U-Verse usage will be capped at 250 GB. For every 50 GB in excess usage, customers will be charged $10. The new pricing scheme begins May 2. In response, Free Press called for a Congressional investigation. AT&T said in a release that the new rate structure will only affect 2 percent of its customers. The plan takes effect May 2.
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FCC Chairman Julius Genachowski’s net neutrality order made allowances for usage-based pricing, saying the commission was content to let the market discipline the practice. Canadians have lived under usage-based pricing since 2008 and analysts predicted that the practice would soon head south to the U.S. In 2009, Time Warner Cable backed down from a similar cap-and-charge proposal. In January, Credit Suisse analysts predicted that usage-based pricing would drive up streaming costs but said broadband movie streamers like Netflix still posed a threat to traditional pay television.
Free Press’ Derek Turner blasted AT&T’s new pricing plan, saying Congress should investigate monopolization in the broadband market. “AT&T’s actions are another troubling symptom of a broadband market that lacks meaningful competition, and this move may be the start of a race to the bottom among other providers to see who can squeeze its customers the most,” Turner said in an e-mail. “At worst, this is a plan designed to discourage cord-cutting and pad profits; at best, this is another example of an antiquated phone-company business model being forced onto an otherwise vibrant and limitless marketplace.”
The company said in a news release that its new pricing plan will only touch bandwidth hogs. “Lopsided usage patterns can cause congestion at certain points in the network, which can slow Internet speeds and interfere with other customers’ access to and use of the network,” the company said. “Our new plan addresses another concern: customers strongly believe that only those who use the most bandwidth should pay more than those who don’t use as much.” The company said it will grant two grace periods and then warn customers as they approach their monthly limit. U-Verse television won’t count toward monthly allowances, the company said. Company spokesmen didn’t respond to multiple requests to ask follow-up questions.