Protests over low AT&T data caps, high penalties for violating them

Consumer protection groups take on FCC, AT&T, "inevitable duopoly" following merger

Consumer protection groups are asking the FCC to investigate "particularly aggressive" broadband usage caps AT&T put into effect at the beginning of last week, charging AT&T doesn't use the caps to manage bandwidth congestion, but to generate revenue through fines and fees.

AT&T sets data caps at 150 GB per month for DSL accounts and 250GB per month for subscribers to its U-Verse fiberoptic service, which offers speeds of up to 24 Mbit/sec downstream.

AT&T charges customers $10 for every 50GB of data over the limit.

On average, only two percent of customers will be affected by the data cap, according to AT&T. DSL customers average 18 GB of usage per month, it says. A Netflix movie stream uses about 2GB per hour, so watching Netflix movies or TV for two hours per night for 30 days would more than triple the average data use and take customers more than a third of the way to the data cap.

"In addition to concerns raised by broadband caps generally, such a practice produces a perverse incentive for AT&T to avoid raising its cap even as its own capacity expands," accordin got a letter to FCC chairman Julius Genachowski from the groups Public Knowledge and the New America Foundation's Open Technology Initiative.

Given the 18GB average monthly usage, PCWorld writer Jeff Bertolucci wonders, what's the point of a 150GB data cap?

It's the same as an all-you-can-eat shrimp special at a restaurant that stops you at three plates; that's all you can eat because that's all they'll give you.

"Not to be too cynical here, but it does sound as if AT&T and its fellow ISPs are hoping to cash in on Netflix' popularity," Bertolucci wrote.

If anything he's not being cynical enough.

The thing is, AT&T is documented as being really bad at knowing how much data its users are using.

The most extreme case is the guy who metered data flowing through his network and found AT&T's estimates overestimated his actual use by 4,700 percent one day, after under-estimating it by 91 percent the previous day.

That doesn't sound like AT&T is putting a lot of effort into accurate usage measures. Don't use that to assume it will listen receptively to complaints that it's overcharging you because it mis-counted your gigabytes, however.

Ten dollars isn't an extravagant price for 50GB, if you're buying portable hard drives.

If you're buying monthly Internet service, it's not only a high price, it's a sign you have a target painted on your back. It means you're a trouble-maker – the kind of subscriber who drives down its average per-customer profit margin by paying for a service and then insisting on using it.

I don't have much sympathy for that point of view, but the FCC does, largely because it's under the impression ISPs aren't already making a usurious profit margin on their wired broadband services and need to be protected from their own customers in order to have enough money to spend on network upgrades.

No one who has ever built a network or read a carrier's financial statements could believe that.

Unfortunately, the courts seem to, which can only indicate worse days ahead for both consumer and business ISP customers.

OTI – a non-partisan think tank on media and technology – issued a report April 21 warning that the pending merger between AT&T and T-Mobile – which the FCC appears to be in the process of approving -- makes it inevitable that the telecom market will be dominated by two major players – AT&T and Verizon.

The Justice Department is looking into the AT&T-T-Mobile merger.

The chances it will do anything about data caps is very close to nil.

Getting Justice or the FCC to do something about data caps will require more than just think-tank reports. It will require complaints from consumers and businesses to both agencies, as well as complaints to the carriers.

The momentum is in the carriers' court right now, but that doesn't mean it can't be shifted back to the customers' side.

Speak up.

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