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AT&T is Capping the Internet

AT&T users everywhere will soon have to watch their downloads, which is probably exactly what the company wants. The internet service provider (ISP) will soon restrict its DSL and UVerse users to 150GB and 250GB caps respectively in move that doesn't...
March 16, 2011, 8:08pm

AT&T users everywhere will soon have to watch their downloads, a potentially contrived behavioral change from the broadband giant. The company will be restricting its DSL and UVerse users to 150GB and 250GB caps respectively in move that doesn’t seem to make a lot of sense.

The company says that currently only a small percentage of users — around 2 percent — use this much data a month. If that's the case, it's not clear why the company is bothering to install the caps. It is, however, the same rationale (and the same usage stat) that the company relied upon to explain why it would be capping iPhone data plans last summer, which had hitherto been "unlimited."

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In fact, the cost of bulk broadband should continue to trend downward so the reason can’t be financial.

DSL and UVerse connect fairly directly to a hub — unlike cable connections where users share a local loop that can become congested. Bulk-bandwidth costs for an ISP are a tiny portion of its business costs, and those prices continue to fall even as users consume more and more data.

In the end, the only rationale that makes sense is a more cynical approach, typical of an industry that’s never been truly competitive.

There's little data to demonstrate whether large ISPs actually are experiencing real issues with congestion. Skeptics see the limits as ways to discourage cable video customers from "cutting the cord" and getting their video online, or as a way to pocket profits instead of re-investing in bulking up their infrastructure.

Prolonging the inevitable has never been a very profitable long term business plan. Given what went down recently in Canada and the protests in the Middle East, it’s never been more clear just how much people care about their Internet. Should we expect similar backlash here in the U.S.?

Of course it all comes back to a little company called Netflix, which is kind of turning into a television station.

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