AT&T Follows Comcast's Lead, Now Charging Users $30 More To Avoid Usage Caps

from the what-competition? dept

Wed, Mar 30th 2016 6:34am — Karl Bode

Last fall, Comcast added a new wrinkle to its plan to impose arbitrary and unnecessary usage caps on the company's broadband customers. It began charging users a $30-$35 premium if users wanted to avoid caps, effectively turning the idea of unlimited data into a luxury option many could no longer afford. Caps continue to be a great way to impose price hikes on uncompetitive broadband markets, charge more money for the same service, with the added bonus of both curtailing -- and cashing in on -- the growing use of Internet video.

And because the broadband market is so uncompetitive, AT&T this week effectively just came out and decided it would follow Comcast's lead. In a blog post, the company announced that it's bumping the usage caps on its U-Verse broadband customers, but it's also going to be following Comcast's lead and charging users a $30 premium if they want to avoid them entirely. That is, unless you sign up for AT&T or DirecTV (now owned by AT&T) TV services:

"On May 23 we will introduce a new unlimited data option for our U-verse home Internet customers. Customers who subscribe only to our home Internet service who anticipate they will use more data than their new higher monthly data allowance – or who don’t want to think about how much data they are using – can sign up for unlimited home Internet data for $30 more a month. If you have AT&T U-verse Internet and DIRECTV® or U-verse TV service and pay for your services on a single bill you will automatically get unlimited home Internet data at no additional charge – a discount worth $30 a month.

What sweethearts! To soft sell the idea, AT&T emphasizes that they're raising the company's previous caps, but it forgets to mention (and most news outlets aren't noticing) that it had never bothered to enforce caps on U-Verse previously, effectively making these new caps. And like other ISPs before it, AT&T tries to argue that the caps aren't a big idea because most of its customers won't run into them:

"Today, our home Internet customers use just over 100 GB of data per month on average. So even with our smallest U-verse Internet data allowance of 300 GB the average customer has plenty of data to do more...If you don’t have unlimited home Internet data and you exceed your data allowance at any point during the billing cycle, you will receive increments of 50 GB of additional data for $10 each. The usage of approximately 4% of AT&T U-verse Internet customers currently exceeds our new higher data allowance.

The fact that the majority of your customers won't hit the caps now doesn't mean they won't in a year or two. It also doesn't magically explain away the reality that usage caps on fixed-line networks simply aren't necessary. They exist solely as a way to take advantage of uncompetitive markets, charging users more money for the same product. They're also an ingenious, anti-competitive way of protecting legacy TV revenue from Internet video. But an ISP can't come out and just say that, so AT&T sells it as a way for consumers to have "more choices":

"We want to continue providing a great experience for our Internet customers so we’re giving U-verse® Internet customers more choices and more data, including an unlimited data option available to any U-verse Internet customer."

Again, forcing customers to pay more money for the same service isn't giving consumers more choices. All AT&T's doing is imposing a glorified price hike. That's after the company announced it would be charging users a different $30 fee to opt out of AT&T snoopvertising, making privacy a luxury option just like unlimited data. It's yet another example of how the only real competition in the broadband industry -- is a competition over who can screw a captive market the hardest while with a straight face proclaiming they're improving the "customer experience."

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Filed Under: broadband, fees, usage caps
Companies: at&t, comcast

36 Comments

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Ninja (profile), 30 Mar 2016 @ 6:59am

So now AT&T customers have to pay $30 not to be monitored and sent unwanted ads and another $30 to be exempt from the caps on top of their regular broadband bills.

Sounds reasonable when you think Comcast charges $60.000,00 for the privilege of not providing any goddamn internet at all.

Looks like some wacky races where the winner is the one who gets their customers back to stone age first.
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limbodog (profile), 30 Mar 2016 @ 7:04am

I can't wait to Blockbuster these guys
It's gotta happen eventually. Monopoly abuse always backfires sooner or later.
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- Uriel-238 (profile), 30 Mar 2016 @ 2:09pm
  
  Re: I can't wait to Blockbuster these guys
  I think they're waiting for the classic responses:
  
  Phase one: Bricks.
  
  Phase two: Molotovs.
  
  Phase three: explosives applied to the infrastructure.
  
  It would be hilarious if the revolution starter that way.
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  - Anonymous Coward, 30 Mar 2016 @ 11:32pm
    
    Re: Re: I can't wait to Blockbuster these guys
    What a marvellous start to a revolution, allow another tyrannically group to seize power by destroying the means by which the citizens could organize to decide their own fate,
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    - Uriel-238 (profile), 31 Mar 2016 @ 1:08am
      
      Are all revolutionary groups tyrannical?
      It's not the people's infrastructure, and until the people seize it for themselves it won't be used to allow the people to organize.
      
      That's the problem with privately controlled infrastructure, is then that private sector can decide the rules by which people are allowed to use it.
      
      Case in point, booby-phobic facebook (who isn't afraid of terrorist beheadings or cat slayings).
      
      Think Comcast or AT&T are going to provide service to anyone who might challenge their authority?
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Anonymous Coward, 30 Mar 2016 @ 7:11am

If so few people will ever go over their data cap of 300gb and tend to use only 100gb, then why dont the companies just absorb the few that do? I would think there is a lot of people who are just giving back that extra 200gb that they are not using.
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- murgatroyd (profile), 30 Mar 2016 @ 7:53am
  
  Why would you absorb it when you can make $$$ off of those users? These companies will do anything they can to rake in more cash, regardless of whether or not there's an actual technical reason for the additional charges.
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- Ninja (profile), 30 Mar 2016 @ 8:00am
  
  Re:
  I don't know if they are trying to pretend there's any reason to impose caps anymore but the old trope was about network capacity. Even if you consider such bullshit it means the overwhelming majority of their users use only 1/3 of their capacity which means there must be more than HALF of the goddamn network available even if you include the 4% in the number.
  
  But I don't think they care to pretend anymore. The FCC seems to be the only one that can't see this as it is: plain old robbery.
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Anonymous Coward, 30 Mar 2016 @ 7:14am

Fees = Failure on the horizon
I think we are seeing these companies pulling this garbage because they can see what is coming down the line. It is a self fulfilling prophecy. They will cause their own demise because they are afraid of their own demise.

Eventually, some wifi/5g etc... type of service that we all carry will make dedicated broadband lines unnecessary just like the pots services.
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- Ninja (profile), 30 Mar 2016 @ 7:55am
  
  Re: Fees = Failure on the horizon
  I really doubt it. In terms of stability I sincerely doubt wireless will ever outpace wired connections because physics. Maybe if you talk about availability you could argue wireless may help, specially on places where laying the cable network is not feasible.
  
  Other than that, a good wired network with wireless APs is much, much better.
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  - Anonymous Coward, 30 Mar 2016 @ 9:07am
    
    Re: Re: Fees = Failure on the horizon
    If laying cable/fibre is not feasible, high bandwidth wireless is even more impracticable due to its line of sight limitations. Large bodies of water, where you cannot see the other side, desert areas and mountains can be a bigger problem for wireless networks than they are for cable networks. Any longer range high bandwidth network needs repeaters, and these need power. Laying cable allow the power to be supplied via wires in the cable, which makes cable better for spanning large distance where there is no power infrastructure, like oceans, mountains and deserts.
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    - Anonymous Coward, 30 Mar 2016 @ 9:33am
      
      Re: Re: Re: Fees = Failure on the horizon
      Self fulfilling prophesy.
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- Anonymous Coward, 30 Mar 2016 @ 8:58am
  
  Re: Fees = Failure on the horizon
  High bandwidth wireless is limited to line of sight connections, which means that mesh networks can work well where there are high population densities, but it is useless without an infrastructure to cover longer haul connections. This infra structure can be a chain of microwave towers, and/or fibre connections.
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Anonymous Coward, 30 Mar 2016 @ 7:17am

All these companies merge with the claim that merging will enable better advancement, innovation, customer service, and prices. Then, shortly after they merge, stuff like this happens.

and the government wonders why consumers are fed up with these mergers and all the empty promises involved. Because when they happen this is what happens.
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Anonymous Coward, 30 Mar 2016 @ 7:19am

I'm waiting for all the other unchallenged providers to follow suit now.

I bet these things don't apply to areas covered by Google Fiber though.
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- Anonymous Coward, 30 Mar 2016 @ 7:24am
  
  I won't be holding my breath
  I'm waiting for all these mergers to result in all the consumer benefit these companies keep promising ...
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- Ninja (profile), 30 Mar 2016 @ 8:06am
  
  Re:
  I bet these things don't apply to areas covered by Google Fiber though.
  
  Why would you pay $30 to avoid magical caps and another $30 to retain your privacy if you had both included in Google Fiber? Point is: if there is competition they simply CAN'T get away with such practices without simply going bankrupt after everybody tells them to take a hike.
  
  But the market is competitive and no American needs more than 4mbit, right?
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kallethen, 30 Mar 2016 @ 7:27am

I will give them credit for one thing: Their usage caps at least are higher on the higher speed tiers.

That said, it's still BS.
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- Ninja (profile), 30 Mar 2016 @ 7:56am
  
  Re:
  And you can still blow past the caps within a few days of heavy use. So even the credit is very lousy.
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Anonymous Coward, 30 Mar 2016 @ 7:41am

Innovation at its best
It's a good thing we don't regulate these guys, they are finding innovative ways to rape people.
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Anonymous Coward, 30 Mar 2016 @ 8:26am

Hate Crimes?
The preceding Techdirt story headline is 'Congressman Wants To Make Attacking A Cop A Federal 'Hate' Crime'

How long before we can charge ISPs with hate crimes against US customers (which has the inevitable effect of diminishing US competitiveness ie is aiding and abetting terrorism and enemies of the United States. Traitors and Haters!)
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Anonymous Coward, 30 Mar 2016 @ 8:32am

Stop Digging!
I recently contact AT&T about this. The poor rep, didn't learn "If you are in a hole, you stop digging in said hole."

The agent Said, "2% of Our users go over the caps." The blog said "4%." The agent believed I was a non-TV subscriber which meant I was subject to the caps (I am a TV Subscriber). HILARIOUS times was had.
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Anonymous Coward, 30 Mar 2016 @ 9:37am

I live in a small town. There just isn't much choice in who you get your service from. Then too, you have to factor into this, that the service I get now, can't be increased in speed because the infrastructure is not there.

To add a near double the price to avoid the caps, just isn't worth it, no more than PPV is worth it. First time I break these caps, I will do the same thing I've done for PPV. I will terminate the service as just not being financially worth what you are getting in return. I have enough troubles with justifying paying what I am today with no caps for what I am getting. Couple this with once every 5 or 6 months my service goes out for a week or so because of corrosion according to the service rep that has to come from another town to fix it.

I just can't see paying more while already being dissatisfied with what I am getting for the price I'm paying.
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That Anonymous Coward (profile), 30 Mar 2016 @ 10:03am

Of course the cap for regular DSL users is only 150GB with the $10 per 50 over. No way to pay more to avoid the cap. Unless of course you want to sign up for Uverse, and then get the hard sell to 'bundle" to get a better deal.

Of course the first thing they want to bundle is phone, because they are trying very hard to get the subscriber counts on copper down so they can exit that market entirely. I mean its not like they got a bunch of laws changed to allow them to exit POTS when subscriber numbers dropped. Of course the copper lines won't go to waste, as thats how they deliver Uverse to many of their customers. But I'm sure they will be 'sold' at a loss to another 'company' under the umbrella and still have as little spend on maintaining them or expanding capacity.
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- That Anonymous Coward (profile), 30 Mar 2016 @ 11:13am
  
  Re:
  Just noticed this as well...
  The cap on the extra 50GB for $10 for DSL is $200
  Only $100 for Uverse.
  
  Yep totally not trying to move people over, nope nope nope.
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Johnny5k (profile), 30 Mar 2016 @ 10:16am

This applies to:
Customers who subscribe only to our home Internet service

Whenever I've signed up for either company's Internet service (the only two options I have), they give me a "deal" on the first year, where it's actually cheaper to bundle basic TV service than to get naked broadband. So they can continue to pad their tv subscribers numbers and deny cord cutting.

Of course after that first year the promo expires, and all the sudden the price jumps about 100% because of the tv service. That's when I either drop the TV service or switch to the other company again. So with these new caps, if you call them up after the promo ends, I'm guessing they'll gladly sell you basic tv service (pretty much the same you can get OTA) for less than or equal to that $30-$35 fee, "to avoid overage fees," so either way, they're going to get your money, and they can keep saying, "See! An overwhelming majority of our broadband customers also subscribe to tv service!" and continue to put their heads in the sand about cord cutting.
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Anonymous Coward, 30 Mar 2016 @ 10:25am

Scam
Introduce an arbitrary problem, charge to circumvent it.
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- Ninja (profile), 30 Mar 2016 @ 10:44am
  
  Re: Scam
  Malware ransom?
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  - Anonymous Coward, 30 Mar 2016 @ 12:04pm
    
    Re: Re: Scam
    ...or business model if your an ISP.
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    - Anonymous Coward, 30 Mar 2016 @ 12:04pm
      
      Re: Re: Re: Scam
      Forgot large incumbent with little competition.
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Anonymous Coward, 30 Mar 2016 @ 1:40pm

Makes you wonder if all the CEOs meet together periodically and over cigars and alcohol dare the other to screw their customers harder.
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Uriel-238 (profile), 30 Mar 2016 @ 2:05pm

Oligopoly
Because we her at your local high-speed internet and cable provider don't believe in customer satisfaction. We believe in money. Pools of money.
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That Anonymous Coward (profile), 31 Mar 2016 @ 4:27pm

What I can't figure out is why I can buy DSL from a reseller on the same ATT infrastructure and have no caps & a lower price.
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- Uriel-238 (profile), 31 Mar 2016 @ 8:57pm
  
  Me neither...
  But I get the t_mobile infrastructure with tethering / hotspot at a lower price from a contracting company.
  
  Dunno how it works but I'm totally not complaining.
  
  Still a data cap. Without one, I'd consider forgoing home service (also third-party ADSL on AT&T copper).
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Rekrul, 6 May 2016 @ 10:43pm

What I want to know is how "unlimited" the unlimited option is. I mean, does the contract literally say that unlimited means you have unlimited data? Or does it have a clause saying that "unlimited" means you have "unlimited" until AT&T decides that you've transferred too much data in a given month?
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erickz, 14 Aug 2016 @ 7:26pm

I am very upset about the data allowance with at&t. I called charter and unfortunately they want $7000 to run a line to my house because i live on a private road. Their service is all around me and the only service i can get is at&t.
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