AT&T to try limits on monthly Internet traffic

Posted November 4, 2008

— AT&T Inc., the country's largest Internet service provider, is testing the idea of limiting the amount of data that subscribers can use each month.

AT&T (NYSE: T) will initially apply the limits in Reno, Nev., and see about extending the practice elsewhere.

Increasingly, Internet providers across the country are placing such limits on the amount of data users can upload and download each month, as a way to curb a small number of "bandwidth hogs" who use a lot of the network capacity. For instance, 5 percent of AT&T's subscribers take up 50 percent of the capacity, spokesman Michael Coe said Tuesday.

In a filing with the Federal Communications Commission, AT&T noted: "As AT&T has previously explained, a small minority of our broadband Internet access customers consume a disproportionately large amount of the total bandwidth available to all of the customers on our network.1 In order to ensure that we can continue to equitably provide affordable broadband services to all of our customers, we are exploring potential changes to the manner in which we offer and charge for those services."

But the restrictions that Internet providers are setting are tentative. And the companies differ on what limits to set and whether to charge users for going beyond the caps.

Starting in November, AT&T will limit downloads to 20 gigabytes per month for users of their slowest DSL service, at 768 kilobits per second. The limit increases with the speed of the plan, up to 150 gigabytes per month at the 10 megabits-per-second level.

To exceed the limits, subscribers would need to download constantly at maximum speeds for more than 42 hours, depending on the tier. In practice, use of e-mail and the Web wouldn't take a subscriber anywhere near the limit, but streaming video services like the one Netflix Inc. offers could. For example, subscribers who get downloads of 3 megabits per second have a monthly cap of 60 gigabytes, which allows for the download of about 30 DVD-quality movies.

The limits will initially apply to new customers in the Reno area, AT&T said. Current users will be enrolled if they exceed 150 gigabytes in a month, regardless of their connection speed.

"This is a preliminary step to find the right model to address this trend," Coe said. The company may add another market to the test before the end of the year, he said.

Customers will be able to track their usage on an AT&T Web site. The company will also contact people who reach 80 percent of their limit. After a grace period to get subscribers acquainted with the system, those who exceed their allotment will pay $1 per gigabyte, Coe said.

Comcast Corp., the nation's second-largest Internet service provider and AT&T's competitor in Reno, last month officially began a nationwide traffic limit of 250 gigabytes per subscriber. Comcast doesn't charge people extra for going over the limit, but will cancel service after repeated warnings. Previously, it had a secret limit.

Two other ISPs, Time Warner Cable Inc. and FairPoint Communications Inc., are planning or testing traffic limits as low as 5 gigabytes per month, which is easily exceeded by watchers of DVD-quality online video.

Among the largest ISPs, Verizon Communications Inc. is a holdout, and has said it does not plan to limit downloads.


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  • jse830fcnawa030klgmvnnaw+ Nov 4, 2008

    robert austin, I wanted to have Timer Warner Cable but they do not offer static IP addressing unless I became their small business customer. The increased price is just ridiculous for the same level of service.

  • Dukefan53 Nov 4, 2008

    Time Warner needs to concentrate on better service. My so-called "Turbo" roadrunner at 10MB is more often 5-6MB ! We pay enough to them to use all the bandwidth that we desire. 5MB per month would be a joke when we are streaming movies.

  • jse830fcnawa030klgmvnnaw+ Nov 4, 2008

    ohmygosh, that's great in concept but the reality is that it does not work on the Internet. If AT&T filters out all of the spam junk e-mails and rogue Internet traffic eating my Internet bandwidth (like port scans, etc.), then may be this concept would work since I will actually have a quality service to the Internet. My (now AT&T) DSL's available bandwidth had diminished since AT&T acquired Bellsouth by over 25% per my calculations. This does not include the amount of junk that my firewall and spam filter has to block from the Internet.

    I agree with jkinghorn ... I believe AT&T just wants to make more profit without investing in upgrading their infrastructure from all of the Baby-Bell acquisitions.

  • ohmygosh Nov 4, 2008

    You use more gas you pay for it. I'm all for having the piggies pay more.

  • jkinghorn Nov 4, 2008

    This has little to do with increasing service quality and everything to do with creating a new revenue stream.