AT&T to try limits on monthly Internet traffic
Posted November 4, 2008 11:40 a.m. EST
Updated November 4, 2008 12:14 p.m. EST
NEW YORK — 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.