Chicago (IL) – AT& is expanding its bandwidth throttling experiment with Beaumont, Texas being the second test market after Reno, Nevada. Time Warner Cable was the first to set caps in the region to a data transfer volume of up to 40 GB per month and other major ISPs are running similar tests across the country. The ISPs generally claim that the purpose of these "experiments" is to protect average subscribers from a minority that consumes most of the available bandwidth. At least that is the official explanation.
There may be metered Internet access in your future. Last month we reported that AT&T first started limited bandwidth as an experiment in Reno, Nevada. The company caps the available data transfer volume bandwidth for new and existing subscribers in the region to 150 GB and charges $1 for each extra GB sent, regardless of the connection plan.
Apparently, the first test has been a success and convinced AT&T to expand the test to new broadband subscribers in Beaumont, Texas. The terms are the same as those in Nevada region. The company will not charge extra for the first month of excess usage. Consider it as a get-out-of-jail-free card. Exceed your limit the second time and you will be paying extra from thereon. AT&T is offering a web-based tool that tracks the bandwidth usage in real time and the company will call 70% of the limit is reached. These calls may help to prevent some angry calls to customer service, but their purpose certainly is also to tell customers that they may be watching too many videos.
While Comcast is threatening that it may ditch consumers who are exceeding a bandwidth limit of 250 GB per month, AT&T said it will not be terminating service agreements because of heavy use. Not really a surprise, since those extra GB are extra money. In the end, that HD movie that is streamed when a user is over the bandwidth limit may bring another $5.
In fact, bandwidth capping may deter consumers from using HD video streaming services: A family that is sharing the Internet connection across multiple PCs and is streaming content to different screens may easily hit and exceed that 150 GB limit every single month.
Bandwidth throttling not only allows ISPs to squeeze every cent out of its aging infrastructure, but, in theory, creates a foundation to monetize their own IPTV services, creating a potentially unfair competitive advantage over rival HD video streaming services. It will be interesting to see how this scenario will develop.
When the Federal Communications Commission (FCC) ordered Comcast to publicize its network management policies that involve bandwidth throttling, we learned that the company has been capping the bandwidth to 250 GB for some time now. Comcast said it would terminate the service to customers who exceed the 250 GB limit twice within six months. FairPoint Communications is considering caps as low as 5 GB per month.
Time Warner Cable was the first major ISP in the U.S. that implemented bandwidth caps. The company set the cap in the Beaumont region between 5 and 40 GB and is charging “new customers” between $1 and $1.50 per GB sent or received beyond the limit. The ISP even lured existing subscribers to upgrade to a "Price Lock" bundle which guarantees a low price for the combined cable, Internet and phone service for the next 12 months, but enrolls them into a 20 GB monthly cap with $1 per GB overcharge rule. Time Warner Cable may be particularly interested to set low limits to protect its cable TV service and deter customers from using HD video streaming services on the Internet.
Verizon recently said it does not plan to throttle bandwidth at this time.