AT&T to Limit Internet Access and Charge Overage Fees

Starting May 2, AT&T will begin implementing monthly usage limits for its U-Verse and DSL users and charge $10 fees every time a customer exceeds the cap.

According to Broadband Reports, DSL customers will have a 150GB monthly usage limit, while U-Verse subscribers will get 250GB. AT&T will impose the $10 fee for every 50GB over the limit a customer uses.

The telecommunications giant says that their average DSL user consumes approximately 18GB a month, so the new fees are only likely to effect about 2 percent of their customers. The first three overage fees will be waived.

“Just one of these high-traffic users can utilize the same amount of data capacity as 19 typical households,” an AT&T statement read. “Lopsided usage patterns can cause congestion at certain points in the network, which can slow Internet speeds and interfere with other customers’ access to and use of the network. Our new plan addresses another concern: customers strongly believe that only those who use the most bandwidth should pay more than those who don’t use as much.”

AT&T also told Broadband Reports that it will give customers a tracking device to monitor usage over time and tools that will help identify services that use up the most bandwidth, such as the OnLive HD game streaming platform AT&T made an investment in, in September 2009.

Other bandwidth-hungry online services include video streaming company Netflix, where three hours of HD video would use up all 150GB available to DSL customers; Nielsen ratings show that the average American watches a little over five hours of television every day. Video conferencing, file sharing, torrent downloads and watching 1080p-resolution HD videos on YouTube would also become difficult to do without racking up extra fees.

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AT&T conducted cap-and-fee trials for two years, limiting DSL users to a range of caps from 20 to 150GB and charging $1 for every 1GB overage, but the company ended the operation in 2010. At the time, many users began filing complaints with the Better Business Bureau against AT&T for false advertising, saying that they had been promised unlimited services when they signed on.

S. Derek Turner, research director at media reform group Free Press, called AT&T’s most recent venture “a poor solution to an unproven problem.” The move will have “a chilling effect on economic growth and innovation online,” Turner said. “When ISPs force their customers to watch the meter, experimentation, innovation and business will suffer.” Turner also said that AT&T’s overage plan is punitive considering it “bears no discernible relation to underlying costs, which are estimated to be mere pennies per gigabyte.”

Rep. Edward Markey (D-Massachusetts) also expressed his worry over the potential repercussions of AT&T’s usage caps. “I am concerned that charging more for increased usage would raise prices for some consumers and potentially lead to lower broadband adoption levels,” Markey told The Hill. “This would undermine our broadband goals as outlined in the National Broadband Plan while undercutting our global competitiveness, and I will be closely monitoring this decision.”

With this move, AT&T will join Comcast as another ISP to impose usage fees on its customers. Comcast endured backlash from subscribers after the company failed to warn them of the upcoming limits in 2008 and throttled data on its network to prevent file sharing.

AT&T insisted that it is “committed to providing a great experience for all of our Internet customers.”