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Update: Suddenlink Usage Cap Numbers Arrive, Company Declines to Comment

Phillip Dampier September 30, 2011 Broadband Speed, Competition, Internet Overcharging, Suddenlink 11 Comments

Suddenlink serves portions of these Texas communities

Stop the Cap! has learned Suddenlink will establish usage allowances nearly identical to AT&T for their broadband customers, with a $10 overlimit fee for each 50GB customers manage to exceed their limits.

Suddenlink officials have declined to comment on Stop the Cap!’s report published yesterday.

The usage caps, which will first be implemented on customers in Amarillo, Tex., are as follows:

  • 150GB per month for customers subscribing to “lite” tiers of less than 10Mbps, similar to what AT&T limits its DSL customers;
  • 250GB per month for 10, 15, or 20Mbps customers, similar to AT&T U-verse;
  • 350GB per month for premium-priced 50 or 107Mbps service packages.

Suddenlink says they expect less than 1% of their customers to exceed the monthly limits.  If they do, they will receive warnings three times before the overlimit fee is imposed.

“It could have been worse, but there doesn’t seem to be any justification for these limits other than the fact their biggest competitor in Texas — AT&T — has them,” says Amarillo resident and Stop the Cap! reader Angel.

“It’s another example of what happens when you live in a country that allows broadband duopolies,” Angel says. “Just like with cell phones, as soon as AT&T does something, their competitors follow suit and the customers are stuck paying more and more for less and less service.”

Angel says the first time he is billed an overlimit fee of any kind, he’ll downgrade his broadband service.

“Why pay for premium priced speed tiers when usage caps make them not worth the extra money?”

Currently there are 11 comments on this Article:

  1. Baxter says:

    Well, It def could of been worse, I could def live with this, at least for now, we dont netflix or stream that much and when we do on the 10mbps we get about 110gb so that def leaves quite a bit, and not to mention I can get all the computers and devices in the house to use opera to compress the data, and what not

    for the regular user thought they might find this a hassle

    also on a side note, I could think of one reason why suddenlink is following AT&T’s model, most of the places in texas is covered by one or the other and sometimes both and im not talkin about a few markets either, here where i live at&t has been tryin to get us and the small town all with them offering 15 dollar a month service but with a cap, suddenlink could be putting these numbers cause it would keep people from leaveing the company to move to AT&T, cause we all know DSL has no chance against cable as far as speeds are concered but they can get offly close

  2. Ian L says:

    A few notes:

    1. Suddenlink business class is more expensive but capless, just like Comcast Business Class.

    2. By the time you go overlimit twice, on Suddenlink you aren’t required to pay anything extra. On Comcast your service would be suspended.

    3. Downgrading if your usage is above SL’s thresholds may hurt you more than help you…a little over 250GB on a 10/15/20 Mbps tier would run you $10 above the tier price, whereas that same amount on a “lite” tier (1.5 Mbps down, 256 kbps up in Amarillo if I remember correctly) would be $30 above the tier price. In most cases, the price delta between 10 Mbps service and “lite” service is less than $20.

    That said, SL’s 20M tier ($60-$80) may be more than $20 cheaper than its 50M or 107M tiers, depending on what package you get. But the price difference for someone going 51+ GB over their cap on 20M would be minimal vs. just upgrading to the faster tier.

    10M vs. 50M OTOH…yeah. 10M is going to be cheaper at any usage level.

    4. Overages mean that SL can subsidize network upgrades by using $$$ from the users who make them required. Everything in SL’s network has finite capacity at some point, with the last mile being the most finite in most cases (eight DOCSIS channels = ~300 Mbps of downstream capacity) so, given the option of significantly lowering speeds or keeping high speeds and instituting caps (to deal with potential heavy users), what would you do?

    With no caps, someone downloading hundreds of gigs of video via BitTorrent or Usenet on their 107M connection would face no penalty for grabbing more than one-half of a node’s available capacity at a time during peak hours…every day. Versus someone who uses their 107M connection to download “only” 200 hours of 720p video, plus other web surfing activity.

    5. If you would like to compete with Suddenlink by offering unlimited for-residential plans at lower prices than SL charges for unlimited-for-business plans, this is an excellent market opportunity. Assuming of course that you can make money with customers that, for example, use more than 250GB on average on a $40 per month connection.

    • Ian L says:

      To be clear, if SL’s caps were half of what they are, or if their overages were 50 cents per GB instead of 20 cents, I’d have more of an issue with their way of doing things. Neither of these conditions exist.

      • Scott says:

        Neither exist *now*…

        This new metering along with stopping further expansion/investment is their new profit center.

        Time has shown again and again they will tweak their plans as necessary to continue to increase their revenue by reducing limits or increasing pricing the penalize customers much more than you’d see on a consumer friendly unlimited plan that doesn’t have you counting your megabytes.

    • Ben says:

      Since the O.P brings up comcast, more notes: comcast business service is cheaper AND faster than Suddenlink (including a $5 router rental I pay 104.95 for 22 Mb down, 5 Mb up) from suddenlink for business service of that speed (20/5 in SL’s case) I’d pay $349.95. The only service that is close to comcast’s speed while still being broadband to me is the 129.95/month 8/1 service. Though it’s worth pointing out you *CAN* pay 69.95 / month for 6/0.75 service….

      Go competition. Oh wait, there isn’t any… wonder if I can buy a house outside suddenlink’s service area…

  3. truthmonger says:

    Its beyond absurd that a terrestrial provider would cap your data or charge overages. Throttling is the only fair solution for the so-called 1% of heaviest users. AT&T has this policy for wireless, which has far greater limitations on network capacity (you can’t create more airwaves, sadly). I realize that there will always be those who will abuse any resource, but the root problem is not the supposed 1%. I’m getting very tired of companies basing their entire growth strategy on rationing services instead of reinvesting in their infrastructure. History has shown that this kind of profiteering inevitably cripples a business and leaves it at competitive disadvantage. But then, we are talking about utilities that can legally buy off governments to insure their monopolies.

  4. Russ says:

    This just goes to show how ignorant the average consumer is. Bandwidth costs ISPs a lot of money. Most of them offer it at or below margin to remain competitiive in multi-ISP markets. If an average customer had to pay what it should really cost for bandwidth through their local Internet carrier including the markup necessary to turn a profit, they’d be appalled. Time to grow up, everyone.

    • Bandwidth costs, to quote an industry executive, are “incremental” and make up only a tiny part of the cost to deliver broadband service. Those bandwidth costs, on a per GB basis, are plummeting, as are the capital costs to maintain broadband networks. Usage is up, but so are broadband prices.

      The average cost for most providers is on the order of pennies per gigabyte. A 2009 study found Comcast charging $40-50 a month for service that cost them $8 to provide. Just this month, Bloomberg News declared broadband delivers a consistent 95% profit margin to providers.

      It is patently false to claim providers offer broadband service “at or below margin.” In fact, and major cable operators acknowledge this openly, broadband is now their most profitable service by far. The rest of the world illustrates just how true this is. In countries in Europe and Asia, broadband service delivers enormous profits at much faster speeds at much lower prices.

      You need to become a regular reader here. We source our facts. It is time to begin doing your own research and learn what even the industry acknowledges: broadband is a money machine.

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