AT&T Follows In Comcast's Shoes, Rolls Out Bandwidth Cap Trial

As of Nov. 1, new AT&T High Speed Internet customers in Reno will receive a bandwidth usage amount ranging from between 20 GB and 150 GB per month, depending on their broadband speed tier, the company announced.

Sometime later this year, existing AT&T High Speed Internet customers in Reno will become a part of the trial if their monthly usage exceeds 150 GB in one month, and will be capped at that level, the company said.

In addition, once customers are part of the trial, they will receive a one-month grace period the first time usage is exceeded. After that, customers will be charged one dollar for every gigabyte over their determined usage amount.

AT&T outlined its plan in the letter to the Federal Communications Commission and said that it will provide customers with an online usage metering tool that displays a running total of the amount of data the customer has transmitted during a given month.

The company will also send written notices to customers when they reach 80 percent of their monthly usage tier to remind them of the usage tier and the additional charges that apply for exceeding it, but will not impose any additional charges at that time.

"Only after the second time the customer exceeds the applicable monthly usage tier will the customer be subject to additional per-gigabyte charges," the company said.

"Finally, in the event a new or existing customer does not want to participate in the trial, we will permit the customer to cancel their broadband Internet access service without an early termination penalty."

Although it was scheduled to go into effect Saturday, Nov. 1, news of the trials was not widely reported until Tuesday, and AT&T said it has sent out customer notifications.

The San Antonio-based conglomerate said it wanted to evaluate a usage-based model that could potentially help address "today's trend of explosive bandwidth usage. The trial may be extended to one other market by the end of the year."

On Oct. 31, AT&T electronically submitted a letter to the FCC reiterating its bandwidth cap plans that were submitted in a docket earlier this year.

"We have previously stated that some type of usage based model, for those customers who have abnormally high usage patterns, seems inevitable," the company said in a statement.

"A small group of customers are using the majority of bandwidth on our network. In fact, almost 50 percent of total bandwidth is used by just 5 percent of customers—customers, for example, who are uploading and downloading the equivalent of more than 40,000 YouTube videos or 40 million e-mails a month," the company said. "This kind of heavy usage has an impact on all of our customers."

Without a doubt, AT&T caps are sure to rile customers. After much wrangling with the FCC, last month Comcast was reviled after it went ahead with its long planned network traffic management plan that caps bandwidth at 250 GB per month.

Comcast, the country's second largest ISP (according to ISP Planet Research), said that bandwidth hogs will be slowed during times of congestion, but other subscribers would not be affected. The company said that subscriber traffic would return to normal priority status once heavy hitter's usage drops below a set level in a particular time interval.

As to whether it's the chicken or the egg, growth vs. greed, it is interesting to note that according to findings from ISP Planet Research in August, the second quarter of this year "was the worst quarter for subscriber growth in the seven years we've been tracking these numbers. For the first time ever, the subscriber total of the ISPs on our list declined."