AT&T Imposes Data Limits on Broadband Customers

AT&T has a little surprise in store for its home broadband users. It will begin capping data usage and charging extra for those who go over the limit. AT&T is no stranger to the data cap notion, having already slapped data limits on its cell phone customers.

AT&T says a small number of customers have been using too much data, causing problems on the network and slowing down service to other users.

So, starting May 2, subscribers to AT&T's basic DSL Internet plan will be limited to 150 gigabytes of data per month, while subscribers to its faster U-Verse plan will get 250. Anyone who exceeds the limit three times will be charged $10 for each additional 50 gigabytes.

The company says the limits will currently -- emphasis on currently -- accommodate more than 98 percent of its 17 million customers.

What the company didn't say is that it and other major cable and telecom carriers are not very happy with the trend towards “cord-cutting,” the term the industry uses to describe the increasingly popular practice of watching movies and TV shows via the Internet instead of via cable or over-the-air broadcasts.

Since all of the major carriers provide cable-style TV packages, they're not exactly enthused about consumers simply going directly to the source of their favorite programs and movies, cutting the cord to the middleman in the process.

Trouble brewing

AT&T's move isn't going over too well in some quarters. Rep. Ed Markey (D-MA), who has played a major role in telecommunications legislation, expressed chagrin.

“I am concerned that charging more for increased usage would raise prices for some consumers and potentially lead to lower broadband adoption levels," he said. "This would undermine our broadband goals as outlined in the National Broadband Plan while undercutting our global competitiveness, and I will be closely monitoring this decision."

Internet providers have until recently priced their services according to speed – one price for 15 gigaHertz, another for 30 and so forth. Recently, carriers and their public affairs mouthpieces have started calling this “all-you-can-eat” pricing and casting snide glances at heavy Internet users and content providers, insinuating that they are somehow hogging resources by using what they have already paid for, a trend Markey finds troubling.  He said  AT&T and the other big carriers could stifle innovation by placing caps on usage.

"The Internet has always been an all-you-can-eat electronic marketplace for consumers, innovators and companies large and small," he said. "Such freedom has made the Internet the most successful commercial and communications medium in history, helping to fuel our economy, spur investment and create jobs."