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Breaking News: AT&T Ending Unlimited Broadband Service for DSL/U-verse Customers May 2nd

Phillip Dampier March 13, 2011 AT&T, Consumer News, Data Caps, Editorial & Site News, Public Policy & Gov't 51 Comments

Broadband Reports has obtained a leaked memo stating AT&T plans on eliminating its flat rate broadband plans for DSL and U-verse customers effective May 2nd.

On that date, AT&T will limit its DSL customers to 150GB per month and its U-verse customers to 250GB per month in what will be the largest Internet Overcharging operation in the nation.  Customers who violate the usage limits will face a three-strikes-you’re-overcharged penalty system.  After three violations of the usage limit, customers will pay an additional $10 for each block of 50GB they consume.  Although that represents just $0.20 per gigabyte, less than some others have imposed, it is not pro-rated.  Whether a customer uses one or fifty “extra” gigabytes, they will face the same $10 fee on their bill.

Customers will begin receiving notification of the change in the company’s terms of service March 18.

AT&T claims only 2 percent of their DSL customers will be exposed to the Internet Overcharging scheme.

“Using a notification structure similar to our new wireless data plans, we’ll proactively notify customers when they exceed 65%, 90% and 100% of the monthly usage allowance,” AT&T’s Seth Bloom told Broadband Reports. The company also says they’ll provide users with a number of different usage tools, including a usage monitor that tracks historical usage over time, and a number of different usage tools aimed at identifying and managing high bandwidth consumption services.

“Using a notification structure similar to our new wireless data plans, we’ll proactively notify customers when they exceed 65%, 90% and 100% of the monthly usage allowance,” AT&T tells us. The company also says they’ll provide users with a number of different usage tools, including a usage monitor that tracks historical usage over time, and a number of different usage tools aimed at identifying and managing high bandwidth consumption services.

However, AT&T’s accuracy in measuring broadband usage is open for debate.  The company is facing a class action lawsuit over its wireless usage billing.  According to the suit, AT&T consistently inflates usage measured on customer bills.  No third party verification or oversight of usage meters is mandated — customers simply have to trust AT&T.

AT&T ran trials in Beaumont, Tex., and Reno, Nev., from 2008 with a range of usage limits.  Customer reaction to the trials was hostile, and the test ended in early 2010.  In December, FCC Chairman Julius Genachowski told providers the agency was not opposed to usage limits and consumption billing schemes, leading some to predict the green light was given to companies willing to test whether customers will tolerate Internet Overcharging.

AT&T claimed this weekend its new pricing was going to benefit customers.  So long as customers keep paying their bills, AT&T will not “reduce the speeds, terminate service or limit available data like some others in the industry,” Bloom said.

But the usage limits come at the same time Americans are increasing their consumption of online video and other high bandwidth services.  Usage limits which may appear to be reasonable at first glance become punishing when they do not change over time and customers increasingly risk exceeding them.  Once established, several companies have repeatedly lowered them to further monetize broadband service usage.  AT&T has delivered some of the lowest usage limits in the wireless industry, so it has faced customer criticism in the past.

Customers tied to existing term contracts may likely avoid the usage caps temporarily.  Others will not stick around long enough to find out.

“I will be canceling my U-verse service on Monday and go back to Time Warner Cable,” writes Stop the Cap! reader Jeffrey.  “I will never do business with a provider that imposes overlimit fees on usage that literally costs them next to nothing to provide.  It’s like charging extra for every deep breath.”

Some of our other readers are headed back to Comcast, which has a 250GB usage cap, or exploring DSL provided over AT&T lines by third party companies, which likely will not impose usage limits, at least for now.

“Charging 20 cents per gigabyte isn’t too bad, but you just know AT&T will lower the caps or jack those rates up,” our reader Ian writes. “It is very important to send AT&T a message right now we are prepared to quit doing business with them over this issue, or else we will be nickle and dimed to death by them tomorrow.”

Our reader Jared asks whether new legislation has been introduced to curb unjustified Internet Overcharging.  In 2009, then Rep. Eric Massa (D-N.Y.) introduced a bill to ban Internet Overcharging unless companies could prove it was justified.  At the moment, there is no new legislation, but when providers attempt to overreach and impose pricing the vast majority of broadband customers oppose, that could change.

At the moment, Stop the Cap! recommends AT&T customers begin to explore alternative providers and prepare to terminate their service with AT&T unless they scrap their Internet Overcharging scheme.  AT&T earns billions in profits from their broadband division and spends millions on lobbying.  With this amount of largesse, AT&T does not need this pricing scheme to remain profitable.

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john k
john k
13 years ago

call AT&T and let them what you think of there caps we have to let them feel heat from there customers that how twc was stopped in 2009

brcreek
brcreek
13 years ago
Reply to  john k

k

Honestly, calling AT&T will accomplish nothing but wasting time. The only way anyone is going to have a chance in fighting this is if they call their local members of Congress (and it’s still an incredibly slim chance) and demand that they impose laws for True Net Neutrality.

patriotaxe
patriotaxe
13 years ago
Reply to  brcreek

Al Franken (Dem/MN) remains our one, reliable champion of Net Neutrality. I’d suggest contacting his office first; chances are he’s already working on this.

StoptheCap
StoptheCap
13 years ago

How about this for an idea for new legislation – If cable companies introduce a “CAP” then they must refund unused data on a pro-rata basis to the other 98% of customers.

Cap’s should be made illegal wired and wireless

aaron
aaron
13 years ago
Reply to  StoptheCap

agreed

JoeIllinois
JoeIllinois
13 years ago

After years of denial by internet providers(that also sell pay TV service), isn’t this a recognition by AT&T that people ARE cutting the cord to watch TV online? (Sorry for stating the obvious here.)

Shouldn’t we expect other providers to fall in line with usage caps, since they’ll claim that they’re only following AT&T’s lead?

Greg
Greg
13 years ago

I’m not going to defend AT&T here, but it sounds better than Comcast. Last time I checked, Comcast may ban you from service if you exceed the 250GB per month cap. At least with AT&T, you’ve got the option to get more data if you’re willing to pay for it.

siouxmoux
13 years ago

Well ATT is about to lose another customer. If sonic net was available in west san jose. I would drop ATT UV Internet for sonic.net.

Austin
Austin
13 years ago

If this was for the consumers, 98% of people would have lower bills

If this was because of AT&T’s network being overloaded, then we would have heard AT&T tell us so a long time ago.

If this was for greed of investors… then well Its happening now… This…

David
David
13 years ago

Net Neutrality…Please…Netflix, Applie, Hulu, Amazon, Google are all getting a free ride on the infrastructure of AT&T. And their position is to not charge them but charge the end-user. So, that’s what is going to happen. You asked for Net Neutrality…You got it. The network is NOT free. AT&T wanted to increase fees to the content providers; but were refused by your FCC…So, if you don’t like it…right your congress person and ask for a Fair Net Neutrality legislation that isn’t 100% to the benefit of Google, etc.

Ron Dafoe
Ron Dafoe
13 years ago
Reply to  David

Your 100% wrong. All of those companies that you listed are also paying for their internet connections They don’t get “free” internet. it costs them and the money that they pay to whoever goes to the companies that they have agreements with. See, they have you so confused, you don’t even know how it works, or what exactly net nuetrality is. net nuetrality has nothing to do with Internet Overcharging. it has to do with the fair distribution of information of the internet. I suggest you read about net nuetrality, consumer internet, business internet, and hosting services to inform yourself… Read more »

Tim
Tim
13 years ago
Reply to  David

To echo Ron Dafoe, you are absolutely 100% incorrect. No one is getting a “free” ride here. Everyone pays for their bandwidth: consumers and content providers. This is especially true with the Comcast+Level 3/Netflix dispute. Comcast is wanting to double-dip by charging Level 3 more because it claims it gets more traffic. However that traffic, is traffic being requested by Comcast subscribers, which already pay Comcast for their connection. We all know what caps are for. They are not for grandma who checks her email once a week or to punish supposed data hogs, whatever that is. It is to… Read more »

Larry
Larry
13 years ago

For the past several months, I was toying with the idea of switching from Roadrunner on TWC to U-verse. Not anymore.

Arsta;
Arsta;
13 years ago
Reply to  Larry

Same.

I don’t think this cap is nearly as bad as what TW tried to do here, and yeah we owe Massa even in NC, but he was stupid to do what he did and get forced out.

He didn’t do us any favors there.

I still oppose this on principle. What needs to be done in NC is make sure Purdue knows about it for a potential veto and tounge-lashing on the cable bill- she needs something to get her re-elected right now (she isn’t very popular).

Duffin
Duffin
13 years ago

To those more conservative people (not on this site, just in general), how exactly are people supposed to “vote with their wallet” with stuff like this? Huh? In the article, a reader says they’ll go to Time Warner, but Time Warner has plans to do the exact same thing. When all ISPs are in cahoots to kill streaming video, how is the so-called free market supposed to work? You just want people to stop using internet? I think in this day-and-age, that’s nearly impossible. You can’t even apply for many jobs in person anymore. It’s all done online.

Duffin
Duffin
13 years ago

Philip, I was definitely amazed by how Spot the Cap was able to push Time Warner back, but the thing that worries me is the focus of Americans. As a whole, Americans are lazy and uninformed. So, yeah, we were able to organize the first time, but how many times are Americans going to want to rally before they just give up and deal with the unfair treatment? We’ve seen it many times before in our history much more than the times people banded together to stop an injustice. We’re seeing that even after being beaten down, corporations will just… Read more »

Arsta;
Arsta;
13 years ago

Would threatening and if need be cancelling phone service for this reason have any value?

I don’t have cable with AT&T, but have cell service through them (Real cheap plan, AT&T didn’t offer good broadband here, but “it’s coming” like it has been the past 3 years)

Tim
Tim
13 years ago
Reply to  Duffin

You are right. I am with AT&T Uverse and I am not happy about this but the only other game in town is Time Warner who tried and keeps saying that they are not done with caps at all. I think brcreek is on the right track. Personally I think the thing we really need to demand that all ISP’s sell a “dumb” pipe and open their lines to competition. It would bring us back to the dial-up days when anyone could start up their own ISP on the baby bell lines.

Duffin
Duffin
13 years ago

Yeah, I know you guys will keep fighting and have allies. I’ve just been completely discouraged in the governmental process due to all the ridiculous stuff that has been going on in congress the past few years.

Oh well, we’ll keep up the good fight until the end, I suppose!

J
J
13 years ago

Here we go again! It’s like 2009 all over again.

NetFlix, Vudu, Internet based TV, other live Internet events, PSN, XBox Live, the fact that most software publishers want to move to a completely online distribution is going to eat into this seemingly completely arbritrary 250 CAP pretty quickly … the idea of any sort of cap is completely short sighted.

Getting fired up again!

Steve
Steve
13 years ago

What can we do if there is no other provider in our area for broadband internet? No cable company services my area, and my only other alternative is sattelite internet (which sucks).

Isn’t this some kind of monopoly or unfair business practice when people are forced to accept a change like this and have no other alternative?

Oscar@SA
Oscar@SA
13 years ago

What about those of us who still have cable tv from our ISP (TWC)? If they are targeting online tv users, why do I have to suffer a cap if I am paying for tv service from them. if they are going to rape us with caps, at least have -> have tv service = no cap…
Pretty ridiculous… we do not need or want a cap on our service regardless of what we use… Where is my refund when I stay under the limit?

J
J
13 years ago
Reply to  Oscar@SA

Oscar – you almost had me thinking that might be a good idea, the problem being that it reeks of a sort of “tying”, when in fact everyone should get the same, uncapped service, especially when one’s Internet use is disproportionate to TV viewing.

Requiring that someone buy one service in order to “qualify” for another seems like tying to me.

Scott
Scott
13 years ago
Reply to  Oscar@SA

Once they implement caps, it doesn’t stop. My cable company originally had the plans you’re exactly describing. The unbundled internet plans were all expensive and capped pushing you towards their “triple play” bundled packages without caps. So customers thought fine, just pay the extra $70+ on top of your $60 internet and get uncapped internet.. It didn’t stop there, after a year or so of pushing people into the uncapped triple play package they did away with the unlimited internet for the bundled plan and forced CAPS on all plans with a $5 per gig charge. This isn’t about just… Read more »

J
J
13 years ago
Reply to  Scott

Could not agree more Scott! Upvote x 1000 … ^^^^^^^^^^^^^. You have articulated why the ONLY sensible argument is for NO caps. I would just add that – cablecos (especially TWC) tried to hoodwink people with bogus logic that bandwidth is somehow a “consumed” resource akin to water or natural gas, when nothing could be further from the truth. As soon as bandwidth is “freed” it is immediately available again and is NOT analagous to other types of “consumption”. I smell a new “explanation” brewing from the cablecos… [Y’know, in a highly speculative world in which I MIGHT agree with… Read more »

RAFAL
RAFAL
13 years ago

You’re righ about them lowering the caps eventually… Canadians got lowered to 25 gigs for $40 or so.. and $2.50 to $10 each extra gig after that. and we are fighting back. At least you got some competition to jump to… our big three teamed up and all charge the same…. PUSHING the Government to step in is the only chance. Good LUCK on your Fight

J
J
13 years ago

In having a look at some of the logos on the front page, I think I will tell everyone I know to subscribe to netflix, purchase a Roku box, and subscribe to Hulu Plus.

oh, and buy as much as you can from Amazon. Lol.

😉

Austin
Austin
13 years ago

Has AT& Explained why TV IP data does not count in the cap? Data is Data on the AT&T Uverse network. Its a Pure IP environment, all data should be treated equal.

Austin
Austin
13 years ago

So even if TV is delivered somehow slightly different down the same piece of fiber to the VRAD, and they win that argument… this avoids the point…

TV from AT&T’s VRAD to my house is all VDSL2 Data, and nothing more.

Most Cable Co’s are capping because of “Last Mile” Congestion. Which is a type of congestion that is physically impossible for AT&T to have.

So then logic points to This being a back-haul congestion issue. And if only 2% of people are using more than they would like, I cant imagine AT&T having back-haul issues.

Scott
Scott
13 years ago

If it hasn’t been stated already I wanted to make it very clear too that AT&T is essentially capping their competition. It’s clear this move is to block internet video provider competition along with increasing revenue. What hasn’t gotten much of a story is their U-verse TV side of the business that runs over the very same lines. The 250GB cap on their high-speed U-verse service EXEMPTS AT&T’s video over IP TV service’s bandwidth that travels over the same protocols and pipe as the IP based videos from YouTube, Facebook (soon), HULU, Netflix, Amazon.com, VUDU, and many other providers. AT&T… Read more »

Austin
Austin
13 years ago
Reply to  Scott

Exactly, better said than I could have.

Steve
Steve
13 years ago
Reply to  Scott

If that is the case, then they need to get off their lazy asses and upgrade some infrastructure! I’m getting penalized 100gb a month difference on my cap because AT&T can’t even offer thier crappy Uverse service in my area! Nice discrimination there…

Andrew
Andrew
13 years ago

I’m an AT&T U-verse customer with Charter as my only other option, though from what I can tell, they cap their service as well.

It would be great if there was some sort of petition where we could tell AT&T directly how we feel and how much money they will lose in revenue when we, their customers, jump ship over this issue. I spent over $5000 with AT&T last year in U-verse and wireless service alone — I’m sure the numbers will add up pretty quickly.

James Karvey
James Karvey
13 years ago
Reply to  Andrew

I’m willing to print and send letters to ATT. I asked a customer rep for the address for their Ombudsman but got the run around about shift changes and that their supervisor was available.

Just give me some addresses and I will start sending letters. Feedback. Feedback all along the spectrum from AT&T to our corrupt and useless representatives in government.

James Karvey
James Karvey
13 years ago
Reply to  Andrew

I’m with you. Just give me some addresses and I will start sending letters. Feedback. Feedback all along the spectrum from AT&T to our corrupt and useless representatives in government.

I’m willing to print and send letters to ATT. I asked a customer rep for the address for their Ombudsman but got the run around about shift changes and that their supervisor was available.
Try, try, again.

Andrew
Andrew
13 years ago
Reply to  James Karvey

I’ve got a petition started on Change.org. It may not do any good, but we cannot like AT&T pull the rug out from under us without a fight!

https://www.change.org/petitions/tell-att-that-data-caps-are-absolutely-unacceptable

Andrew
Andrew
13 years ago

I’ve got a petition started on Change.org. It may not do any good, but we cannot like AT&T pull the rug out from under us without a fight!

https://www.change.org/petitions/tell-att-that-data-caps-are-absolutely-unacceptable

Matt
Matt
13 years ago

in my area there two ISP cable and AT&T, cable co here has a 25gb cap on their system
this is bad on my part i play a lot of games online. I was told to forget trying to fight it i am flighting a battle that cant win. ATT thinks they can do any thing what they wont to the customer.
you have no rights to say anything becouse there new Terms Of Service. they can just cut you off
i have no one eles in my area. it seems like no one eles can come here.

Satori vonFaust
Satori vonFaust
12 years ago

Here’s my story – Been an AT&T internet customer (due to limited choices in my area) for several years first with wireless DSL (the laptop ‘fob’) then went to “naked” DSL after they changed my “unlimited” plan without notice leaving me with a HUGE bill. They guaranteed that the data usage on my “naked” DSL was “unlimited” and would always be that way. Well, as things turn out that was a lie. I just received a new router (01/12) and inside the box was a slip telling me that I now had a 150gb cap. When I called about this… Read more »

Pymm West
Pymm West
12 years ago

Sounds just like ATT. They do anything they want or don’t want to do. If you don’t like it where you going to go. Why in the world did the feds allow ATT to get in with satellite service. Your story is so common around the country. My son-in-law and daughter just got rid of their ATT service since they have access to other internet options. Lucky ones. And for very similar reasons.

Me
Me
12 years ago

These are onerous (google it if you don’t know what it means) conditions laid down by AT and T on purpose to artificially deflate prices. In reality your price will go up probably unless you are a really light internet user. That’s just my opinion. Don’t we already have enough to worry about in life, let alone that we need to worry about going over the limit?

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