AT&T Surcharge
Posted on June 12, 2008
My good friend AT&T Inc., the country’s largest Internet provider, is considering charging extra for customers who download large amounts of data. (Grrrr!)
The top 5 percent of AT&T’s DSL customers use 46 percent of the total bandwidth, according to a company spokesman.
Overall bandwidth use on the network is surging, doubling every year and a half. But I recently wrote that is what should be done - the bandwidth should be used and technology should provide more. What would have happened if the 286 or 386 computer developers (Intel, specifically) had said we’re not going to make any faster chips available? What if they had said a small percent of users are the ones using the most so we’re stopping all that right here? What kind of computer would you have today?
So AT&T is going ahead with plans to increase network speeds and at the same time saying there’s too much bandwidth being used so they’re going to surcharge it. Isn’t the purpose of increasing speed to increase bandwidth usage?
All of this then simply comes down to the plan of how do we raise rates next? Except this time, they are singling out blocks of users - the ones that are driving them to new technology. When we all reach the level of complacency, they will then be able to collect their fees with no need to improve their technology.
Most cable companies have official or secret caps on the amount of data they allow subscribers to download every month. Time Warner Cable started a trial earlier this month in Beaumont, Texas, under which it will charge subscribers who go over their monthly bandwidth cap $1 per gigabyte.
Cable companies are at the forefront of usage-based pricing because neighbors share capacity on the local cable lines, and bandwidth hogs can slow down traffic for others. Phone companies have been less concerned about congestion because the phone lines they use to provide Internet service using DSL aren’t shared between neighbors.
Download caps could put a crimp in the plans of services like Apple’s iTunes that use the Internet to deliver video. DVD-by-mail pioneer Netflix just launched a TV set-top box that receives an unlimited stream of Internet video to a TV set for as little as $8.99 per month. If they were delivering DVD quality movies, those today (if you disregard Blu-Ray), fit on a DL DVD which holds almost 9 gigabytes. I can guarantee you nobody is going to pay for a movie and then pay 9 dollars more to their ISP to watch it.
So on the basis of the Time Warner plan, and possibly AT&T’s also, depending on how much they charge, those companies have become guilty of using their position to put other companies out of business, stifling possible competition. This would work something like an embargo tax except in this case it would be a blockade.
Regulator time…..
» Filed Under AT&T, Cable, DSL, Internet
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