AT&T to cap broadband usage. Streamers beware

AT&T will cap broadband usage. What will this mean to those of us that stream music all day from Pandora and Rhapsody or other internet radio stations? Those of you that stream movies from NetFlix like I do, look out for a price increase on your upcoming AT&T bills.

AT&T Article
I fully agree with the plan to charge heavy users for what the actually use.
Why sould normal users carry the burden of full time downloaders?
I do not download much content, and applaud all the providers for charging for excessive usage.
The 'free ride' is over.
I have never checked my usage because I had unlimited. I
pretty much exclusively listen to my SqueezeBox as an audio
source via streaming. I rarely play an LP or a cd any more.
I view a lot of movies streamed via NetFlix. If I find out
that it's going to cost me a lot more than what I've been
paying, I'm certainly going to find another internet
provider. Besides, AT&T has ripped me off in so many other
ways so many times, I should have left them years ago.
Once it starts in time this will be industry norm so good luck shopping around. People who suck alot of bandwidth should pay more. They never cared when they as a group slowed down things for everyone else.
Oh what a can 'o worms.
There are only a few who use a monumental amount of broadband and for those I say, why not. But it will not end there. The internet will be over regulated and monopolized to the point that hackers will retaliate. It should remain free, open and unfettered save for the hogs but they would be easy to regulate.

In France, and other European countries, they get several times the bandwidth, local and long distance phone service, and about twice as many HD channels as we do and it costs them a whopping 35Euro/month. Or so I've been told. Correct me if I'm wrong.

They admit that the first to lay down the cable should be compensated but that's the end of it. Open and free competition allows lots of users and suppliers which brings down the costs. Isn't that how we should be operating? Instead, we allow monopolies that restrict competition and drive up the price.
I'm all for competition in the truest sense.

your price will not go down and others will only go up.

All this does is open up other providers to under cut At&t or change the same inflated rates.
Define "alot of bandwidth".
From what I read you can stream over 150 hours of HD movies as an example before you get slapped with a $10 charge for another large amount to consume. That amount of data is "alot" to me and as noted will only affect a small minority of far that is.
It's purely a profit maximization calculation - there's no moral "right" or "wrong", and certainly no "should" or "shouldn't".

Presumably, someone will offer unlimited bandwidth at some price - and ATT will either make a competing offer or they won't. That decision will turn on their view of the risk of losing customers, their cost structure and their requisite margins, not on some notion of apportioning their costs "fairly" to "bandwidth hogs". Evidently, ATT has concluded that, right now, they can pull their existing unlimited bandwidth offer and charge more to heavy users without the risk of losing too many of them.

I can assure you that ATT does NOT want to lose high bandwidth customers.

I'd also note that there are several reasons to believe that the actual cost of incremental fiber capacity will see significant downward pressure in the coming years. However, that doesn't mean ATT will pass the cost savings on. In order to realize that benefit as a consumer, you might have to deal with someone other than your current bandwidth provider. It remains to be seen who will emerge to fill that "unlimited bandwidth demand" space (ATT might well jump back in) and it should be interesting to see how this plays out.

It's hard to find on their site, but they have a page with a running tally of your bandwidth usage by month.

I've been streaming episodes of Lost over Netflix since I had no network feeds when it was current. My DSL speed won't sustain HD content, but I'm about halfway thru the 4th season - about 80 episodes - and my total is 47 Gig since I started watching. This includes my normal internet usage as well.

There's not enough hours in the day for me to use 150 gigs at this rate, maybe if it was HD. The Netflix stream is four dots, I think that's the best quality short of HD and it looks great, really.
Perhaps it should be mentioned that this conversation is based in the USA? I wonder if they have this problem in Finland or South Korea. I would be surprised if they did.

Metrization of a free resource (the cable is already laid down) is only meant to extract more money from the end user. It's not like they're going to pay fantastic salaries to the cable guy, either.

These machines now can handle huge bandwidth and CHEAP. The problem is the monopoly over the cable. If it was owned by the public instead of Wall Street, well, you might get the same level of service as in Helsinki.

I'll disagree - pretty strenuously, actually. These assets (telecom for regulatory purposes) have historically been in the hands of publicly owned or regulated utilities. As a result, they were horribly mismanaged and the public paid the price.

Once the sector was privatized and opened to competition, prices dropped like a rock. There should be no doubt about this - it was specifically as a result of private sector competition. In fact, prices dropped so quickly and steeply that a few of the highly levered companies which laid the fiber went bankrupt.

If these assets were in the public sector, you can bet anything that high speed service would be sparse, hard to find and very expensive.

We've been there, no one should want to go back.


I should add that one of the examples you cite (South Korea) is illuminating. South Korea has effectively fostered competition in the deployment of high speed connectivity by aggressively forcing the last mile monopoly (Korea Telecom) to open its local access ("unbundle the last mile") to bandwidth providers like Hanaro. To my knowledge, South Korea has by far the least regulated Telcom sector in Asia. Additionally, a fair chunk of South Korea's subsea fiber was developed (and to a lesser extent provided) by private entities like the Asia Global Crossing/Dacom JV.

Honestly, I am much less familiar with the situation through most of Europe, and I definitely can't comment on Finland. However, there are so many factors - ranging from the aforementioned last mile legacy, to geography, population density, etc. - that such comparisons are very difficult in any circumstance.


Hi Marty,

I'm somewhat curious regarding your assessment of Wall Street it too large to fail?

Best regards,

Not remotely.

I have no particular philosophy regarding public ownership/regulated business versus unregulated capitalism. There are benefits to each. Stability vs. efficiency. People want the upside without the downside. Sadly, that's not how the world works. Free markets bring upside, but volatility. Regulated markets are more stable, but kill the upside.

My guess is that most people are happiest somewhere in the middle. Fine by me, either way.

However, I have personally financed (to the best of my knowledge) more fiber than any other individual on the planet. I know the history of these assets better than I want to.

My comments reflect the history of ths business as I understand it - but they certainly shouldn't be taken as an endorsement of free markets at all costs. Rather, I'm just pointing out that the development of low cost digital distribution is a direct result of privatization. Having lived thru the transition from public to private, I don't think that this fact - FACT -should be subject to debate.

Marty is absolutely right about privatization lowering the cost of bandwidth for everyone. I'm old enough to remember when a 56K frame relay circuit was $500/month and a T1 (1.5Mb) was $2,500/month! And the reliability stunk on both. I now get 10Mb into my house, over copper, for $40/month. People with FIOS can get 10 times that, and Google is rolling out 1Gb service in KC, KS. Some bandwidth providers are governmental, most are private, all charge similar prices. Competition almost always drives prices down.

He's also right that most people prefer something between public and private, and all you have to do is look at how water, sewer, electric and gas utilities are run. Some are government run, some private. All are regulated, because the government decided everyone needed access to those basic services at a reasonable price.

At some point, Internet access and cell phone service will cease to be luxuries and cross over into necessities, just like water, sewer, electric and gas. Some would argue they already have, although there's still a large portion of the population who survive quite nicely without either. When the crossover happens, the government will step in and regulate.

As Marty points out, this will bring stability, kill the upside, and probably result in consolidation of the market. Better? Depends on which side you're standing.

The guy who owns the fiber (or wires or pipes) gets paid no matter what. Delivery to your door is what you actually pay for.


I see that I sort of skipped answering your question re: TARP directly and went straight to the logical follow-up, re: government intervention.

As to the former. I'm not an economist, but I do have the gut feeling that letting the big banks fail might have been truly disastrous. Therefore, I think TARP probably saved Main Street as much as Wall Street and, therfore, constituted good policy. (Only, however, on the basis of TARP's effect on Main Street.) Just an opinion, and not a terrible informed one, at that.

As a side note, you might be interested to know that, of the many dozens (maybe hundreds) of Wall Street bankers and lawyers that I know, NOT ONE fully embraced TARP. From that, I hope you deduce that I don't hobnob with the Lloyd Blankenships of the world.

Bankers tend to be free market guys who want to see badly run businesses fail - even if they work for those businesses. Most (at least the good ones) are sufficiently confident (arrogant, if you prefer) as to believe that they could find another job and make the same (or more) money. These guys were as angry as anyone at their own executive management - except maybe for the asset backed origination guys who were the bulk of the root cause and, honestly, I just don't know anyone at that end of the business.

The only fact tempering their resistance to TARP was the their own position in their employer's stock (a portion of those huge bonuses you hear about is always in stock/options that vest over time). Bottom line: most bankers grudgingly approved of TARP because it protected their wealth, even tho they hated the idea.

OTOH, those guys who saw it coming and shorted the bank sector (I know several who did so) were just furious. One neighbor even trotted out the Boone Pickens line that, after TARP, political risk to investment was greater in the US than it is in China. For what that's worth....

Hope that is more responsive to your question.


Hi Marty,

Fascinating perspective...our intimate and casual associations notwithstanding, I regard the conviction with which you speak.

Thank you,


Sorry, I don't follow the "intimate and casual associations" reference. I'm particularly curious about the "intimate" part.

yeah that intimate part left my confused in a I dont wanna know kinda way lol

Oh, very well :-) Permit me to edit my abstruse post for clarification:

"...our [respective/independent] intimate [family/friends] and casual [informal/incidental] associations [relationships/experiences]..."

So much for my post-retirement aspiration as a technical writer - LOL


More fuel to the fire....
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