AT&T's (NYSE:T) 250 GB data usage cap for its U-verse customers is a pretty liberal topper... for the moment. You'd have to be rolling an HD movie a day, every day of the month, through Netflix (NASDAQ:NFLX) to even tickle the 150 GB cap that AT&T's DSL customers are looking at starting in May.
The telco says it currently expects only about 2 percent of its customers to be worried by the usage cap.
Nevertheless, the concept isn't going to be well received by consumers, caps never are.
And, according to Sanford & Bernstein analyst Craig Moffett, cable companies won't be far behind in setting up similar strategies, with Charter, Cox and Time Warner Cable the "likely first movers."
Operators have been reluctant to roll out caps, or even tiered data plans, worried that to do so would further accelerate churn among subscribers. There are few things consumers like to hear better than "unlimited" when it comes to Internet usage, and when you take that away, even when it doesn't have an immediate impact, you can be sure more than a few of them will take a little more interest in their bills.
Time Warner Cable tried a data cap a couple of years ago, but found the brouhaha from politicians and customers more than it wanted to handle at the time. And, of course, this isn't AT&T's first rodeo, either; In 2008, the service provider conducted DSL metered billing trials in Reno, Nev. and Beaumont, Texas. They quietly let those die.
Industry analyst Dave Burstein didn't waste any time calling out AT&T on its decision to cap usage, contending that the telco was being disingenuous: "Congestion is minimal," he tweeted. That may be so. With the average consumer using just 18 GB a month, AT&T's bandwidth cap may be a moot point for most consumers right now, but the company--think Apple's iPhone here--has had more than its share of network issues.
There's no doubt that the company is looking way downrange on this one, and maybe it's the idea of a "data cap" that has everyone up in arms. Perhaps AT&T would have been better off calling a "spade" a "spade" and simply instituted data tiers.-Jim