Back at the beginning of March 2011 we let you in on the news that AT&T was going to start instituting data caps for all of its customers – well that day has come.
Up to 16 million broadband users on the AT&T network will, starting today, restrict the amount of of data, that’s downloading and uploading, they user per month. For the DSL customers that data cap will be 150 GB and then 250 GB for UVerse customers.
Of course this is happening just as video is being pushed as the ultimate case use for the average internet user. The thing is that even moderate use of Netflix will eat up the majority of caps long before the end of the month. For video content producers this is even worse because all that video you are uploading to places like YouTube is going to be counted against your data caps.
Now toss in all these cloud based services like Pandora, cloud backup services, and multiple gadgets that are accessing the web. All that activity is going to take ever increasing bites out of your data caps.
Of course the companies like AT&T that are trying to foist these data caps on their customers are crying the blues over the cost of providing their broadband service as the reason for going this route. However as Ryan Singel at Ars Technica points out this is a ridiculous argument
The drive to cap usage is ostensibly a way to reduce costs. But in reality, it’s not about the cost of data—bandwidth costs are extremely low and keep falling. Time Warner Cable brought in $1.13 billion in revenue from broadband customers in the first three months of 2011, while spending only $36 million for bandwidth—a mere three percent of the revenue. Time Warner Cable doesn’t currently impose bandwidth caps or metering on its customers—though they have reserved the right to do so—after the company’s disastrous trial of absurdly low limits in 2009 sparked an immediate backlash from customers and from DC politicians.
The real problem ISPs want to fix is congestion due to limited infrastructure. Cable customers share what are known as local loops, and the more that your neighbors use their connection, the less bandwidth is available to you—-a situation that becomes painfully clear in the evening when cable users see their throughput fall.
The blunt force approach of a bandwidth cap does have the advantage of making users think twice about streaming HD movies from Netflix. That is, perhaps not coincidentally, doubly to the advantage of most big ISPs because they’d rather have you spending money on their video services than a third party. Bandwidth-intense services threaten to turn the likes of Comcast, AT&T and Time Warner Cable into utilities—a dependable business, but not one that has the huge profit margins these companies have come to enjoy.
In the end the whole idea behind data caps is nothing more than trying to maximize profits while doing a little as possible to improve the customer experience; but it is thinking like that which is seeing the US slide down the rankings of broadband providers worldwide.