AT&T's Broadband Caps Go Live This Week And Are The Opening Salvo In An All-Out War On Cord Cutters

from the tightening-the-noose dept

For a company that just spent $69 billion on DirecTV to unlock “amazing synergies” across the TV, wireless and broadband sectors, AT&T’s latest quarterly earnings subscriber tallies landed with a bit of a thud. The company actually posted a net loss of 54,000 video subscribers, a net loss of 363,000 postpaid phone subscribers, and a net gain of just 5,000 broadband customers during the quarter — suggesting that any “synergies” AT&T envisioned are going to be somewhat slow in coming, if they arrive at all.

That AT&T spent $69 billion on a satellite TV provider on the eve of the cord cutting revolution — especially given its fixed broadband network lags cable speeds and is in desperate need of upgrade — turned numerous heads on Wall Street. But skeptics haven’t yet really keyed in to the cornerstone of AT&T’s plans or its ultimate secret weapon in the war on evolving markets: usage caps.

We’ve long noted how usage caps are little more than anti-competitive weapons and glorified price hikes levied on uncompetitive broadband markets. And this week, AT&T formally took aim at millions of you with the launch of usage caps on all of the company’s broadband customers. Starting this week, U-Verse customers now face caps ranging from 300 GB to 1 terabyte depending on speed — caps that users can avoid if they’re willing to pay an extra $30 per month. Things are worse for DSL customers, who face a fixed cap of 150 GB and need to pay $10 for each additional 50 GB of data consumed.

But usage caps don’t just have the benefit of letting duoplists like AT&T and Comcast charge customers more money for the same exact product. In addition to using caps to punish cord cutters, AT&T hopes to (ab)use usage caps to prevent cord cutting altogether. The company has announced it’s eliminating caps entirely for customers who subscribe to DirecTV service. In other words, you can avoid aggressive price hikes on your broadband line — if you pay even more money for a TV service you may not even want. AT&T’s doing something similar in wireless, where customers can now only get unlimited data — if they subscribe to DirecTV.

So while the merger may not have provided notable “synergies” yet, the long play is that it gives AT&T the ability to effectively abuse the lack of fixed-line competition — to drive captive, capped customers toward AT&T TV services. And as the justification for usage caps has been increasingly debunked, ISPs have stopped really justifying the moves at all. AT&T’s statement on the matter barely even tries to give a reason for the new limits:

“We want to continue providing a great experience for our Internet customers so we?re giving U-verse? Internet customers more choices and more data, including an unlimited data option available to any U-verse Internet customer.”

And here’s the thing: AT&T’s only just getting started. Leveraging its NFL Sunday Ticket platform acquired in the merger, AT&T says it wants to launch not one — but three nationwide streaming services later this year in a bid to become the streaming video provider across the United States. And should the FCC’s net neutrality rules fail to stand up in court (and perhaps even if they do), guess who’s streaming video service won’t count against any of these usage restrictions?

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Companies: at&t, directv

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Comments on “AT&T's Broadband Caps Go Live This Week And Are The Opening Salvo In An All-Out War On Cord Cutters”

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That Anonymous Coward (profile) says:

But Uverse is the bestest thing since sliced bread.
It lets us shut down our POTS system, because we got several states to agree to allow us to do that if POTS numbers dropped we can exit providing POTS. We don’t need that sort of oversight of our crappy service, we need our next generation fiber network, still delivered on the same aging copper we’ve been let rotting to drive people off of it.

So what if poor people can’t afford our service.
So what if our service fails in a power outage, consumers can spend money to buy their own backup battery.
So what if our 911 implementation is still screwed up & might give wrong information.
They can get our spotty last gen prepaid phones and pay out the nose for access that we nickel and dime away.

Shitty company makes things shitter to drive profits because what they looted from for the USF just wasn’t enough.

Anonymous Coward says:

Re: Re: regulators are vigilant

On the flip side this is a perfect textbook example of what we already know to be true from economic theory. Little competition is socially bad. Something like this would make a great case study for anyone taking an economics course to show real world examples of economic theory in action. So at least something good can come out of this in the form of academics and education.

andrew norton (profile) says:

at&t is at&t

I’ve spoken with a bunvh of directv support people recently. Most are being let go by the end of the year (not renewing the contract with asureon for us call center staff) and since the 15th m5th, theyve been saying “thank you for calling AT&T” ibstead of directv, despite it still being directv, and them having no at&t access. Made a lot of people angry and confused. The workers impressions are also that people are generally distrustful of at&t so the support calls now start badly because of the death star taint.

Sir Wooginowski says:

Even more sinister for DSL when considering the meter

I’m one of the unfortunate ones in a reasonably populated area that can only get standard DSL from ATT. I’m on the 3Mbps/512Kbps plan. My meter has been in effect for the 150G limit for well over 2 years. A few times I’ve gone over and gotten billed (which I call, complain, and get reversed).

Adding insult is the meter is looking at the traffic at the DSLAM, not from the CPE equipment. With ATT DSL, they use PPPoE over ATM as the network transport. The short of it is that this adds about 15-20% overhead to the packets sent to your modem. Since ATT does not over-provision to provide advertised speeds (my modem locks at 3008/514), I can at most receive 2.6Mbps/460Kbps for speed. BUT because of the overhead (on average 18%) and measurement made at the DSLAM, I cannot consume a full 150G worth of traffic before hitting that cap. I can only consume 127G before going over.

So, I cannot ever achieve the advertised speeds, and I also lose about 23G worth of transfer before hitting cap. This is so lost on the customer service reps I’ve given up trying to explain.

Innovation from ATT.

Sir Wooginowski says:

Re: Re: Even more sinister for DSL when considering the meter

Funny enough, it is accurate. When comparing the traffic on a billing period between my router and their meter, it’s almost spot on when I factor in the overhead. The problem: it’s measuring and calculating traffic improperly because that overhead is not factored in. It’s just another creative way for ATT to advertise something for some price and then have a below-the-line “fee” (less speed, less cap) for it.

nasch (profile) says:

Re: Re: Re: Even more sinister for DSL when considering the meter

Funny enough, it is accurate. When comparing the traffic on a billing period between my router and their meter, it’s almost spot on when I factor in the overhead. The problem: it’s measuring and calculating traffic improperly because that overhead is not factored in.

I wouldn’t call that “accurate”.

John85851 (profile) says:

How to get outrage

I think a good way to generate more outrage from customers is to put the usage caps into terms they understand. After all, what’s 300G or 1T a month?
Explain that it’s 20 30-minute shows on Netflix or 10 full-length movies. Then explain that people will get charged fees if they happen to binge-watch a TV show all weekend long. Is watching all 13 episodes of “Fuller House” worth a $30 overage fee?
(Okay, 300G of data may be a lot more than 20 30-minute shows, but you get the idea.)

Anonymous Coward says:

Re: How to get outrage

It’s less than that if you consider regular internet usage. Web browsing + regular downloads & updates are going to take away from that. Plus if you live in a household of more than one person that’s the collective usage for everyone.

I think everyone knows its bad it’s just that politicians are so bought and paid for these days that it doesn’t matter. The government doesn’t care about the people.

Anonymous Coward says:

I’ve currently got ATT DSL, mostly because I’m not a heavy user at home (don’t game, modest streaming/downloading) so it’s been sufficient. However, ATT (and their pesky Uverse/DirectTV sales people who keep knocking on my door – to the point I got a bit exasperated with the last guy who just didn’t get that I didn’t want their stupid dish on my house, on a pole in the yard, or anywhere else on my property) are driving me towards getting TW internet – the only other game in the area. (Of course, I’m not sure if I’m going to end up in the Frontier or the Charter block yet…)

Anonymous Coward says:

We cut the cord about a year ago. Our data usage at its lowest each month is about 320 GB. Fortunately we’re on Time Warner Cable* that has no data caps – yet. I can’t help but feel that this AT&T program is a blatant anti-trust violation through steering or tying or some other grounds.

*”Fortunately we’re on Time Warner Cable” – words never before or ever again said by any sane human being.

Violynne (profile) says:

Starting this week? Maybe I’m missing something here, but the 300GB cap has been with us since day 1, and that was over two years ago.

Maybe it’s for those “unlimited” accounts still floating around?

At any rate, it’s not like any of this matters. It’s just another fine job by a monopolistic industry who requires us to grease up and take it where the sun doesn’t shine.

At least they’re not charging us for the lube… yet.

Anonymous Coward says:

Re: Starting this week

The U-verse caps have been unenforced until now. Previously, if you went to try to view your data usage on AT&T’s site, you couldn’t. Now you can. I was using well over 500 GB per month for nearly a year since I had the misfortune to move into an apartment complex where AT&T is the only wireline provider.

Uriel-238 (profile) says:

The bigger picture

Is it super creepy to anyone else how it seems to be the common norm for our businesses to regard the people, including their own customers, as a hostile, belligerent force?

In contrast to us being the people to whom they want to serve their products (in exchange for our money), they feel our wallets are something they can take for granted or could if only they could manipulate us to open them up and let them take what they want.

To me, this is super creepy.

Anonymous Coward says:

AT&T has a new plan. If you receive DSL, in most cases you can change to the Extreme ISP. Extreme has no caps. When you sign up you find out the finer details. .

You HAVE to use their router, either by monthly rental or paying $100 for the router, without monthly rentals.

They charge $100 if you are not there when they come to install. Installation is normally $199 but free during a short period that just happens to coincide with the cap initiation.

Only credit/debit cards are accepted for payment.

When the truck shows up to install, guess whose truck shows up? AT&T of course.

In speculation, it looks like AT&T is setting up for it’s next big layoff of billing employees.

Dave Cortright says:

Sign up for instead has an offering called Fusion Fiber to the Node (FTTN) that is really just a rebranded Uverse. But importantly they DO NOT have caps, AND they offer VPN service that you can use to prevent AT&T from snooping your traffic and handing it over to the government, MPPA, or whomever else they are in bed with.

Nothing ulterior here. I’m just a satisfied customer. But if you do sign up and use my ID (dcortright) as the source, I will get a referral bonus and I’d be most grateful. 🙂

ljnova (profile) says:

Screw the customer
Make money no matter what.

On May 23rd 2016, AT&T has decided that it is not enough that the company is raking $20 billion a year in profits, so they decided to implement usage based billing on all of their services including their sub-par last mile DSL that is inferior to the next generation internet demands.

Karl Bode of, Steve Blum of and Phillip Dampier of have documented and reported time and time again that AT&T (and Verizon) wants OUT entirely of the fixed wireline business.

It is fact that has been well documented and reported and the way that these companies have been lobbying for that to happen is having model bills authored by these companies have written to our legislatures across the country using a secret group called the American Legislative Exchange Council also known as ALEC.

Also, AT&T just recently has successfully lobbied to stop municipal broadband in the state of Tennessee EVEN if their service is lousy, sub-par, and very expensive. As a FORMER AT&T customer of 7 years my last mile DSL went from $25.00 a month to $84.00 on the last two bills before I told them to go to hell. Did I also mention that AT&T also has implemented “usage-based billing” with a cap of 150 gigabytes per month on that sub-par connection which never reached 6 megs by the way, with a charge of $10 for every 50 gigs a subscriber goes over.

AT&T billed me even when I shut off my modem. Their website is so badly designed, difficult to navigate and the so called “usage meter” was inaccessible 95% of the time.

And during the 7 years I was a customer I would call up and ask when AT&T is going to bring U-verse to my area and each time they told me they have no plans to expand that service.

Just curious : how many will take before those supporters of ISPs ripping off people finally spill over when you cannot justify this form of extortion over wireline?

How much longer are we going to continue tolerating this bullshit from ISPs

1. Metered broadband,
2. data caps,
3. high prices for very low unreliable speeds,
4. dropped connections,
5. forced modem rentals,
6. no option to use alternative hardware,
7. proprietary hardware,
8. monopolies,
9. duopolies,
10. the banning of municipal broadband,
11. protectionist laws designed to keep competition out such as google fiber,
12. the taking of taxpayers funds to supposedly help underserved areas,
13. CEOs salaries in the millions versus badly neglected networks

Am I missing anything else?

How much of this bullshit do we need to continue to put up with before we finally as a collective say we have had enough of?

I’d like a refund on the lousy service I received.

AT&T, Comcast and other scumbag ISPs have figured out why spend any money to provide broadband everywhere when it is much cheaper and cost effective to bribe local officials to write protectionist laws and stop any others from bringing better services to unserved or underserved communities, and they do it under the false argument of “state’s rights” using ALEC.

Take a look at this :

» ··· 590.html

This second article details that the phone companies have manipulated the accounting of lines-in-service to only include a small subset, specifically, basic POTS, plain old telephone service lines, while leaving out that the majority are business broadband and data lines, known as “special access”. Special access are also the wires used to connect the WiFi hot spots and cell sites as almost all wireless selfies or videos end up on one of these wires.

In fact, in 2015, the FCC found that special access services was a $40 billion market—but listed zero access lines. :

» ··· 592.html
» ··· 370.html

These three articles show how Verizon wants to shut off these lines that are very critical to communications infrastructure not just voice, but actually data, alarm systems, banking, ATMS, POS systems…ect using the excuse that no one uses them as landlines anymore.

AT&T has been announcing to the press about fiber deployments, YET Notice that nowhere in any article mentions locations or who ACTUALLY has fiber. Uh-huh. I have a bridge to sell you too.

»/…/C ··· ould-Let…

Here’s a question for Randall Stephenson :

How’s that $65 billion Direct TV acquisition working out for you?
Or that data caps scheme you decided to impose on your customers to create value?
Or how about that bill you sponsored in Sacramento California where you want your company to walk away from last mile wireline and force people on your sub par wireless expensive capped service that is inferior and cannot deliver streaming services forget 4K?
And by the way, where is that gigapower you constantly tell the media about but not many people have?

The California PUC may not allow AT&T to shut off the legacy copper, but AT&T could come back and say “we will sell it”
and look at the potential buyers : CenturyLink, Fairpoint, Frontier, Windstream
and then there are the smaller ones : Sonic, DSL Extreme, Toast and maybe Earthlink

OR AT&T could spin off its entire wireline into a separate company altogether (from AT&T wireless) and sell it by chunks or as a whole. Plenty of scenarios of how this could play out.

An AT&T CWA employee told me that AT&T is fed up dealing with last mile wireline customers. He is made it very clear to me that they do NOT want the last mile wireline anymore and by 2020 all of it will be sold off. So IT IS happening. I’m hoping it is Frontier or Windstream.

CenturyLink is still dealing with issues associated with the acquisitions of Embark and Qwest. Fairpoint is in talks of a possible sale or buyout OR they could grow with more acquisitions.

» ··· 23431602

Look at Connecticut for example. It is well known that AT&T (as well as Verizon, Sprint, T-Mobil) still serves that state with cellular wireless service despite AT&T’s sale of their entire wireline operations to Frontier. Former Frontier CEO Maggie Wilderotter has publicly stated that she and Randall Stephenson negotiated that deal years ago before finally closing at the end of 2014. So the possibility of another deal like this is not far fetched. Remember, Frontier wants these networks because they know that wireless is not a substitute for wireline.

Wilderotter and now the current Frontier CEO Dan McCarthy have also said that AT&T and Verizon are their biggest customers. The MA Bell giants pay Frontier (and other fixed telecom/broadband providers) to use their network as middle mile and backhaul to deliver services.

Stephenson may not have a choice as public officials may force him to sell off the unwanted wireline as a condition of his desire to want a full wireless network at least here in California. The man is many things but one he is not is stupid. Stephenson knows that these copper assets are still worth a lot of money. It would not make financial sense for AT&T to simply shut off the unwanted copper and still hold onto the properties while paying taxes for them. That also does not reflect well on any company’s balance sheet. Either you convert the assets to utilize for something else or transfer them to another company that will make use of them. In these two scenarios either way you come out making a profit. That makes sense
even from a business standpoint.

Wait for AT&T to have a big expense from a merger or buying a huge amount of spectrum and they will use Frontier like a “purchase eraser” on a credit card so that they can hide the effect that this has on earnings. Wall Street Analysts fall for it every time, or maybe they think that everyone who lives in an underserved area should move to San Francisco. Frontier wins from this too because they can momentarily look like they aren’t bleeding customers to death by buying a fresh crop of them.

How ironic as there’s another spectrum auction coming up. This is NO coincidence.

Wireless is not and will never be a substitute for wireline. With the rise of more IOT devices and streaming video that are following the footsteps of Netflix not to mention 4K and eventually 8K, there is simply no way that wireless can handle those demands.

»/…/A ··· Attempts…

We need fixed wireline, Period.

So if you don’t want the copper fixed wireline networks anymore, hand the assets over to someone else who does.

Anonymous Coward says:

First World Problem (mine)

I’m sooo over listening to AT&T (or Comcast) about anything. I managed to get out from under their evil aegis a while back by changing residence.

In the weirdest turn ever, Google just installed fiber in my apartment, at no cost to me and with zero obligation to sign up. Now I have to choose! My current, pre-Google-availablity providers (both of which I employ and neither of which is AT&T or Comcast) offer access that performs at about:

– provider 1: 65Mbps down, 4Mps up for $39.99 a honeymoon,
12-month period and 59.99 thereafter;
– provider 2: 15Mpbs down, 1Mbps up for $29.99 forever
(required by lessor).

Google offer three plans (if I elect):

– plan 1: 100Mbps symmetrical up/down for $50/month;
– plan 2: 1Gbps symmetrical up/down + 1TB cloud storage for
– plan 3: plan 2 + TV stuff that doesn’t interest me at all
for $130/month.

In addition to plan 3 for its stupid TV tricks that don’t appeal (I cut THAT cord a LONG time ago and continue to discover new ways recover missing access for free), I can immediately rule out plan 2, since I don’t game or have a need for ten 4K streams at the same time…three to four is over-enough. What makes my decision hard is that I don’t anticipate ever needing 100Mbps upload rates (don’t game NASCAR, etc.). The 100Mbps downloads are about what I need entirely to avoid local congestion, but that’s what I get now. Don’t know about honeymoon periods yet or other upcosts of Google’s plans yet – more research to be done.

Oh, well, twenty years of Operation Research will give me the optimal choice, whether I love the actual, final resolution or not.

Really, is mine not THE MOST first world problem EVER?!

JackHerer (profile) says:

Competition competition competition

Just another example of why the is broadband market needs effective competition. Where I live in the UK there is a highly competitive broadband market, I can choose from at least 20 . I have added broadband unlimited downloads at 16 maps down and 1 maps up and it costs £10 ($15) a month. That’s pretty much the most basic service, if I wanted the top package I can get 200mbps unlimited for £32 ($48) a month.

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