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AT&T Metered Billing Trial Hits Second Market
Beaumont, Texas users just have all the luck....
by Karl Bode 10:27AM Monday Dec 01 2008
The Beaumont Enterprise is the first to report that AT&T has extended their trials of metered broadband into the Beaumont, Texas market. AT&T began testing metered billing last month in Reno, where DSL customers now face caps ranging from 20GB to 150GB. Those customers are also being forced to pay $1 for every gigabyte over the cap they travel. Users are given an online usage tool to track their bandwidth consumption, and are sent alerts warning them when they've consumed between 60-80% of their allotted bandwidth.

Beaumont was chosen because it's already the site of a similar trial by Time Warner Cable, who we were the first to report is implementing trial caps between 5-40GB with overages between $1-$1.50 per gig. In both trials, the companies are not only testing the network and billing systems necessary to make such systems work -- but the marketing message. Convincing customers that already very profitable companies need to charge them more money for the same (or less) usage is, well, tricky.

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Time Warner Cable handles it by trying to convince locals that the new billing approach delivers guaranteed savings (see forum thread) while improving their Internet "experience" (see Beaumont Time Warner Cable website). AT&T, meanwhile tells the local paper that limiting your consumption and charging you more for bandwidth is actually about making broadband better and more affordable through targeting "abnormally high usage patterns":
"We have previously stated that some type of usage-based model, for those customers who have abnormally high usage patters, seems inevitable," Feldstein said. "This trial will help us evaluate ways of dealing with surging usage trends while continuing to meet customer needs for high-quality broadband at an affordable price."
While AT&T has been using an industry policy group and cherry picked data to suggest there's an unmanageable bandwidth crisis looming that requires a billing shift, network data from backbone operators doesn't support that, and AT&T has provided no raw data showing congestion problems of any kind. If last mile issues spring up, they'll be caused by AT&T's decision to milk copper instead of investing in fiber to the home. These trials don't just target high-consumption users, they take aim at everyone -- and for a very clear reason.

Like many ISPs, AT&T and Time Warner Cable are preparing for a future where competition from Internet video threatens their TV revenues. Through caps and more specifically metered billing, carriers understand that down the road -- they'll be able to monetize and/or deter the use of video content that isn't theirs, giving them a huge leg up in the Internet video battles yet to come. Luckily for both AT&T and Time Warner Cable, limited competition in Beaumont means most customers won't be able to vote against this idea with their wallet.

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2 recommendations

reply to FFH5

Re: BS

said by FFH5:

A specific internet vendor and NO internet at all are 2 different things. Very, very few would go without any internet access no matter what they say here. I am sure that point was obvious. To most anyway.
From what I can gather in previous discussions like this, you are a "let the market decide" and "vote with your wallet" disciple. Now you are actively discouraging someone from that course of action?

That disconnect is quite obvious, except for some.
There is no such thing as too much vacation, but I would wager that there is such a thing as too little.