Rep. Markey Blasts AT&T Data Caps

If AT&T's plan to begin capping broadband usage worries you, you're not alone.

Democratic Representative Edward Markey expressed his concerns over the proposed policy change, as reported by Hillicon Valley.

"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."

AT&T plans to cap DSL users at 150 GB per month, and U-Verse users at 250 GB per month, starting on May 2. Those who run over these caps three times in three separate months would be charged $10 for each 50 GB over the cap. According to the carrier, the caps would only affect about 2 percent of their users.

Some advocates fear that raising prices on higher rates of bandwidth usage has the potential to slow not only user adoption, but web innovation, calling such actions symptomatic of broadband's lack of real competition.

"AT&T's Internet overcharging is a poor solution to an unproven problem, and it will have a chilling effect on economic growth and innovation online," wrote S. Derek Turner of the Free Press in a press release. "AT&T claims that its caps and penalties will only affect a few users, but unless the limits grow rapidly along with usage, many more customers will soon be ensnared. When ISPs force their customers to watch the meter, experimentation, innovation and business will suffer."

Markey underscored the importance of web freedom in the development of Internet progress.

"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."

Comments

[brokerallen]

09:51 PM on 05/02/2011

AT&T and Comcast have found a way to control the internet. Very soon many of the things we value for free, like youtube, are going to cost a lot more. Even services like Netflix will become cost prohibitive because of the cost of data transfer. The greed involved in this is unbelievable. We must stop it. Raise heck with your Congressional Representatives to keep the internet free.

[DeadZones]

07:52 PM on 03/29/2011

The Real Reason Why is AT&T Capping Data Usage for DSL & U-Verse Customers.
http://www.deadzones.com/2011/03/why-is-at-capping-data-usage-for-dsl-u.html

[madHenry]

04:52 PM on 03/17/2011

5gb per day for a family with multiple teenage and adult users is a threshold meant to be breached regularly and AT&T knows it. And this 3-strikes business, it's just stupid. Why not 12 strikes, or 100, or...NONE!

[Vious]

03:47 PM on 03/17/2011

The idea that AT&T and others are being "hurt" by people hitting these caps is LAUGHABLE and have ZERO FACTS to back it up

It is the ISP's wanting MORE MONEY for LESS WORK. It should be ILLEGAL

[madHenry]

04:47 PM on 03/17/2011

Didn't you know? Electrons, esepcially American electrons, have gotten a lot bigger, just downright obese, in recent years. AT&T is just dealing with this electron obesity epidemic. Thank you for caring about me and my electrons so much, AT&T!

[Mr Miracle]

09:33 AM on 03/17/2011

One word: Greed

[rmonroe]

11:20 AM on 05/02/2011

This is why people should have paid more attention to the fight over net neutrality rules. Republicans duped their followers into thinking it was bad. Well this is what you get for being a mindless sheep. Unfortunately smart people(Democrats and Independents) knew better and fought for net neutrality. But in today's political climate we lost out to extremism like usual.

[Melanie Fuchs]

09:46 PM on 03/16/2011

AT&T became a huge corporation by being a monoply protected from competition by the government. It seems like they should owe the public something for that protection and for the big profits they have made. They should be regulated because of that. Our interest, the public interest that is, should be protected.

[HerodotusWept]

04:21 PM on 03/17/2011

"It seems like they should owe the public something for that protection and for the big profits they have made."

An American company "owe?" Pfft. Court orders and jail time isn't even enough to convince these "people" that they owe anyone anything other than a few years of slave level wages to as few employees as they can get away with, and then a pink slip the second they can move operations to China.

We need a Teddy or FDR to fix this mess, and instead we got a slightly more articulate version of Carter, but without the aversion to lying.

[secular first]

06:49 PM on 03/16/2011

I think it is a good idea to step back and really contemplate as to why At&t might be implementing this. As far as I see this is At&t and Comcast declaring war on the internet. Let's face it, we are getting to a "beyond cable" age. We, as consumers, don't want to have to pay for 100 channels to catch the 5 channels we actually want to watch. The internet gives us that choice to just watch the shows we want without all the clutter, and that choice hurts the cable companies' profit margins. So they decide to put a cap to force us to either keep with tv or pay more to stream our netflix, hulu, etc. I can easily say that I am one of those "2%" (let's face it, we all know that companies cook up numbers to help their case) due to my streaming and downloading. But what happens when we can stream more and faster information? Do you think the cable companies will increase the cap to keep with advances in technology? How about if they decide to systematically lower the cap for higher profit gain? What will stop them? That's why it's important to make sure they cannot be allowed to do this. If we give an inch they will take more and more until they take it all. Do we really want to go back to the dial up pricing plans of by minute usage?

[HerodotusWept]

04:24 PM on 03/17/2011

We don't, but the legislators that just got that $50,000 campaign contribution? Perhaps not so much... Hell, they are actually talking about making streaming a felony! I have little hope that a FDR or Teddy R. for our times will magically appear any time soon...

[madHenry]

05:34 PM on 03/17/2011

What? SENATOR Rand Paul doesn't fit the bill? Maybe Sister Sarah will aim one of her moose-hunting rifles at the ISP metering scheme? No?

[Denine Nelson]

06:09 PM on 03/16/2011

Since they already do this with their cell phone data plans this shouldn't be a surprise to anyone. Also with content providers asking consumers to pay more for content that used to be free, and ISP's complaining about bandwidth. I think the government definitely needs to step in and be the middle man, but as with everything else the gov will bend to the highest bidder.

[Rrhain]

05:00 PM on 03/16/2011

"The Internet has always been an all-you-can-eat electronic marketplace for consumers, innovators and companies large and small."

No, it hasn't. In fact, the exact opposite is true: The Internet has *never* been "all-you-can-eat." There have *always* been limits to how much traffic you can shove down your connection before your ISP tells you that you either need to pay more or go somewhere else. Pipe costs money. Fat, fast pipe costs more money. Your ISP needs to pay for its connections to the rest of the Internet and if you're hogging all the bandwidth, they'll charge you for it.

The issue is not that they're putting a cap on it (which there always has been) but rather that they're reducing it down.

It's very much like the airlines: The broadband companies are trying to nickel and dime the consumer in order to extract as much money as they can.

[HerodotusWept]

04:00 PM on 03/17/2011

"The Internet has *never* been "all-you-c­an-eat." There have *always* been limits to how much traffic you can shove down your connection before your ISP tells you that you either need to pay more or go somewhere else."

Bull. I don't know where you live, but I've been using the internet at a breakneck pace for well over a decade and this have never happened to me. AOL used to do a "minute-by-minute" plan, but dropped that the second they had competition from folks like NetZero (do we all still remember how actual competition works? I know it has been a while...).

This is such a blatant falsehood that it makes it very obvious who you work for...

[madHenry]

05:31 PM on 03/17/2011

I have had dialup and broadband service in South Carolinam, Virginia, Indiana and Illinois over the past 15 years or so. I suspect I have always been a moderately, heavy. But I have never EVER EVER been metered by my ISP. Who is this guy, a telecomm shill?

[Rrhain]

01:26 PM on 03/22/2011

(*chuckle*)

I was using the Internet before you even knew it existed. DYNIX, baby!

You're quite right that ISP's used to charge for your time (Compu$erve, anyone?), but you're arguing the wrong point. It isn't that you're paying a flat rate for access. It's that you don't put enough stress on your ISP's connection that they have paid attention to you.

Set up a server and connect it to your ISP. Put a blog on it and do what it takes to get it to be popular. How long do you really think it's going to be before your ISP comes knocking saying that you're overloading their system with requests and that you're going to have to pony up for a dedicated T1 line? Or that they can no longer support you and you're going to have to find another ISP? There's a reason that your upload speed is not the same as your download speed. There's a reason that your cable company has an option where you can pay more to have your download speed be faster.

The Internet has never been "all-you-can-eat." If you want fast, fat pipe, you gotta pay for it. And that's fine and makes perfect sense.

What the telecom companies want is to be able to charge twice: Once for access and again for content.

[jffrymg]

02:55 PM on 03/16/2011

I recently received an email from Comcast, actually several months ago, implementing a very similar policy. I am surprised they did not get called out.

[DNAtsol]

01:23 PM on 03/16/2011

Companies like Netflix will probably get into the fight to modify this. After all more money is made from streaming than sending out the dvd/BR. They have a vested interest in keeping these types of charges in check.

Use big business to fight big business I say.

[wonderYrednow]

01:27 PM on 03/16/2011

Like bringing a bow and arrow to a nuclear war. Netflix will be owned before you can say $.

[DNAtsol]

02:17 PM on 03/16/2011

try not to focus on the individual company..... I used "Netflix" as {name of well known content provider}.

Any content provider that streams is going to have an issue with the entity trying to control delivery of that content. Who will will the win? The bridge builder or the car maker? I don't know but in the mean time I will be begin to be able to get where I'm going faster and safer as a result of the competition between these two rather than a competition between two car builders or two bridge builders.

[HerodotusWept]

04:09 PM on 03/17/2011

You do know that Netflix is a multi-billion dollar company, right? That is quite big. Not to mention that once AT$T's competitors notice how much customer base they can steal by advertising "No Data Caps!" AT$T and Comcast will ether change this plan like TimeWarner did in 2008, or lose significant revenue and market share.

[Stewart Goss]

11:59 AM on 03/16/2011

You wanted net neutrality, you got it. Now you want companies to have unlimited bandwidth at no extra charge? Sorry folks, private companies can't run on a loss like government.

[wonderYrednow]

12:19 PM on 03/16/2011

You've been fooled, again.

[tgiovanni]

12:25 PM on 03/16/2011

I think its safe to say that ISPs like Comcast will never run on a loss. With $1 Bill in profits last year, and billions in cash reserve, they ain't exactly going broke.

But, you're right. A company should not operate at a loss. 15 some years ago when Comcast started offering hi-speed Internet, it was charging $35/month. At that time, a typical DS3 connection cost Comcast about $100k/month. Today, Comcast charges about $70/month, and its cost for a DS3 connection is $1700/month.

If you care about private companies and think it is OK for you to buy an overpriced product, hey - its your money. But, I would like to pay a fair price for that product. Unfortunatly, I can't pay a fair price, because ISPs are monopolies. The solution is to break their monopoly, allow healthy competition and then we'll have a fair price.

Remember when ATT was a phone monopoly and they would charge $5+/min (1980's dollars) for international calls, and today you can call for $0.05/min (today's dollars). That's the result of healthy market competition. And even at these cheap phone rates, the phone company is still profitable. Wow!

[wonderYrednow]

01:25 PM on 03/16/2011

Please let me use their money, pretty please. FnF'd for fair to imbalance.

[tgiovanni]

11:43 AM on 03/16/2011

ATT's slowest connection (1.5Mbit/s) can transfer 474.6 GBytes/month. Its fastest connection (24 Mbit/s) can do 7593.8 GBytes/month. The bill to the client: @1.5Mbit/s = $99.80; 24Mbit/s = $1533.76

Now, let's compare that to the cost of a DS3 connection (45 Mbit/s) which is about $1700/month retail to small businesses. I'm sure that ATT purchases connections that are much larger and cheaper.

The cost per Mbit/s of a DS3 = $37.78/month. This means that the cost to ATT to provide 24 Mbit/s to its customer is $906.67/month. So, ATT will overcharge its customer by about $627.09/month.

Ok, let's do another calculation.
If the monthly data use limit is 250 GB/month, the connection speed averages to 0.79 Mbit/s.
A DS3 (45Mbit/s) connection can accommodate about 60 users. If the average monthly bill for 60 users is $3000/month (30 users $65.00; 30 users #35.00), then ATT's revenue is $3000/month.
So, income is $3000, expenses are $1700; profit to ATT is $1300/month.

Instead of investing in additional infrastructure, ATT and other providers prefer to oversell their bandwidth as much as possible. When users complain about performance issue, they blame it on that 2% of "problem users" instead of blaming it on their unwillingness to upgrade their system. This gives the customers someone to "hate" - those pesky bandwidth hogs.

[wonderYrednow]

12:22 PM on 03/16/2011

You are on the right track, just multiply your assumptions by 100's if not 1,000's and you see where AT&T loves the Republics in Congress.