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Is AT&T Hinting At Usage-Based Pricing This Fall?
Some confusing comments at FCC broadband hearing....
by Karl Bode 09:02AM Tuesday Jul 22 2008
At the FCC's hearing on broadband yesterday in Pittsburgh, AT&T Senior Federal Regulatory Vice President Robert Quinn said the company would be changing the way they advertise their broadband tiers. According to Quinn, the new system will change AT&T's practice of marketing their DSL tiers as "up to" the maximum potential speed. I've obtained a copy of Quinn's speech from the meeting, and this is part of what he had to say:
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"When AT&T provides broadband service by speed, it will do so in discrete, non-overlapping tiers. We will strive to provide service within the speed tier purchased by the customer and, if we find that we are not providing service within the ordered speed tier, AT&T will take action either to bring the customer's service within the ordered tier or give the customer an option to move to a different tier."
As it stands now, customers order the "up to 7Mbps" tier, only to find out that copper condition or loop lengths limit them to 3Mbps. Instead, users will be offered 1.5Mbps or 3Mbps speeds first without the "up to" qualifier, then bumped to a faster speed once they're sure you qualify. That's a nice shift for clarity's sake, but some of Quinn's statements raise alarm bells. This is the paragraph of Quinn's speech that has me most interested:
To assist our customers, AT&T will clearly identify any limitations on the amount of usage that may apply to a customer’s service plan.
To assist our customers, AT&T will clearly identify any limitations on the amount of usage that may apply to a customer’s service plan. AT&T will also provide them with information about the impact of bandwidth-intensive applications on their usage so that they may select the service plan that best meets their needs. As our service plans change to reflect evolving Internet usage patterns we will clearly communicate those changes to our customers.
That certainly sounds to me like part of this fall's pricing change could involve putting usage caps on different tiers. But despite Quinn's clear reference to keeping tabs on the "amount of usage," and hints that users will be corralled into different tiers based on that usage -- AT&T spokesman Brad Mays tells me that neither caps or metered usage are part of the equation. Yet.

"AT&T's comments have nothing to do with the amount of broadband a customer uses or the price they pay for it," insists Mays. "Rather, we plan to improve how we communicate with customers about broadband speeds."

So were Quinn's references to tracking usage volume made in error? I'm not so sure. Regulatory lawyers are usually very carefully measured wordsmiths. Obviously, users should welcome the elimination of the "up to" marketing misnomer, but given AT&T's recent statements that they'll be testing usage-based pricing this year, and that such pricing is "inevitable" -- I'd keep a close eye on these upcoming package changes.

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San Ramon, CA

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reply to battleop

Re: Thanks bittorrent!

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Uncle Paul


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FCC I have a question

With the new telecom giant in the room now, I was wondering... when does all the competition and lower pricing start? I just want to know for budgeting reasons and all....