AT&T to Cap Data Usage May 2-Possible effect on Netflix/Amazon not immediately known - High-Def Digest Forums
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Old 04-12-2011, 02:10 AM
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Default AT&T to Cap Data Usage May 2-Possible effect on Netflix/Amazon not immediately known

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AT&T to Cap Data Usage May 2
11 Apr, 2011
By: Erik Gruenwedel

Possible effect on Netflix and Amazon not immediately known


As expected, AT&T will soon impose limits on the amount of broadband data — notably movies and TV shows — subscribers can download from the Internet on a monthly basis without paying additional fees.

AT&T's residential DSL plans will have a usage allowance of 150 gigabytes (GB) per month, while residential U-verse plans will have a usage allowance of 250GB per month.

The caps amount to about 100 hours per month of TV programming for DSL users and 200 hours for U-verse. The caps would limit users to 20 movie downloads in standard definition (25 for U-verse) and 10 (13 for U-verse) in high definition.

Caps also include the ability to send/receive 10,000 emails, 3,000 photos (4,000 for U-verse), 2,000 (3,000 for U-verse) songs and 5,000 one-minute YouTube videos (the same for U-verse).

Subscribers who exceed the limits will be billed $10 per month (following two monthly warnings) for each additional 50GB used.


The telco said it is capping non-business customers after it experienced a “dramatic increase” in the amount of data downloaded by select households. Indeed, AT&T said an increasing minority (just 2%) of its subscriber base was utilizing 20% of its total network. It said these frequent users could utilize the equivalent data of 19 standard-use households.

“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,” AT&T said in a statement.

Netflix CEO Reed Hastings in fiscal calls has reiterated concern regarding planned data caps domestically and in Canada. In a January letter to investors, Hastings said cost incurred by large ISPs (such as AT&T) delivering Netflix streaming from one of its regional interchange points “the last mile” to a consumer costs “less than a penny,” and is declining.

“There is no reason that pay-per-gigabyte is economically necessary,” Hastings wrote.

AT&T subscribers can monitor their broadband usage at www.myusage.att.com.
http://www.homemediamagazine.com/dig...ge-may-2-23620
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Old 04-12-2011, 02:15 AM
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What happens when consumers start getting extra fees from ATT at $10 extra a pop when they start using Netflix and Amazon streaming more and more?

Netflix in Canada just implemented a plan with easier to change video quality options with lower quality less bandwidth data requirements the default settings. That seems to be sensible to be rolled out here as well if more ISPs place restrictions or extra fees on consumers that start to be major Netflix and Amazon streaming users.
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Old 04-12-2011, 02:24 AM
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AT&T may be an interesting case study.

I am on Comcast. I use my broadband extensively for streaming video, gaming and work (uploading and downloading a crapload of data). During waking hours my broadband connection is being used about 80% of the time. We watch at least a couple of hours of video a day purely via internet (Netflix or VOD).

That said, I average about 10 GB up and 140 GB down.

I could imagine months where I hit at least 200 GB, but not really the 250 GB limit. If even 10% of their customers hit the limit, the "s" will hit the fan.

I have discussed this before, but ISPs have to realize that they cannot control consumer behavior. No one is going to stand up to defend them if people using their service legitimately are gouged on pricing. They are setting themselves up for scathing congressional hearings if it looks like people using their service for legitimate/legal uses are getting penalized for those uses.

That is a recipe for disaster. If they want to become utilities who charge a fixed rate above cost, their net revenue will drop dramatically. I am not sure if their cap is low enough to cause an uprising. It will be interesting to see the consumer reaction to this.
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Old 04-12-2011, 03:28 AM
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Cable companies have raised fees for years despite people bitching and congressional hearings.

Even though if may be far over their identifiable marginal costs the investment in infrastructure decisions are complex enough that ISPs may be able to plausibly maintain they need to do this even if the base motivation is to get more money.

Its especially easier to do it when it only applies to a few customers now as the case can be made somewhat that its only far for excessive users to pay more. But of course thats also allowing for more revenues from others when the laggards catch up to those usage patterns.

Whether or not its justified is one thing, but the impact on streaming and downloads is possible even if its a unjustified money grab from the ISPs because they can get away with it. Its kinda uncontrollable from Netflix's side as part of their business advantage is that they are relaying on ISPs and consumers to actually pay for the infrastructure and services they piggyback their low cost streaming upon. If suddenly consumers start to incur extra costs for use of cheap Netflix unlimited streaming its going to be a consumer issue that may make the use of Netflix streaming less desirable or may make high definition streaming even less desirable because of the bandwidth and data usage incurred. That would be a more significant issue over time.
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Old 04-12-2011, 03:28 AM
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Quote:
Originally Posted by PSound View Post
AT&T may be an interesting case study.

I am on Comcast. I use my broadband extensively for streaming video, gaming and work (uploading and downloading a crapload of data). During waking hours my broadband connection is being used about 80% of the time. We watch at least a couple of hours of video a day purely via internet (Netflix or VOD).

That said, I average about 10 GB up and 140 GB down.

I could imagine months where I hit at least 200 GB, but not really the 250 GB limit. If even 10% of their customers hit the limit, the "s" will hit the fan.

I have discussed this before, but ISPs have to realize that they cannot control consumer behavior. No one is going to stand up to defend them if people using their service legitimately are gouged on pricing. They are setting themselves up for scathing congressional hearings if it looks like people using their service for legitimate/legal uses are getting penalized for those uses.

That is a recipe for disaster. If they want to become utilities who charge a fixed rate above cost, their net revenue will drop dramatically. I am not sure if their cap is low enough to cause an uprising. It will be interesting to see the consumer reaction to this.
The aspect of this that you are missing here PSound is the precedent that the caps can set.

Here is the thing, as it stands today I doubt that many people will hit a 250gb cap even if they are frequent Neflix streaming users simply due to the rather heavy levels of data compression which Netflix uses to deliver their product.

When I had the service I tracked an SD episode of a TV show from the 90's streamed to my home at at average of 1.98mbps which means that the average "half hour" (22 minute) TV show required about 326 megabytes of data to DL.

That translates to 890 megabytes per hour (60 minutes) of SD content.

So even if someone were to watch 200 hours worth of Netflix SD content per month (possible but on the extreme outer curve) it would still only equal 178 gigabytes of data streamed.

Which means that is is very unlikely that a significant number of ATT customers are going to experience a situation where their Netflix usage slams them to the cap...

... for now.

However, if you factor in the data required for even the heavily compressed Netflix HD feed.. Then we start to have a problem.

I tracked their HD feed at an average of 5.8mbps which equals a much more substantial 960 megabytes downloaded for a 22 minute program.

This equal 2.6 gigbytes per hour (60 minutes) of "HD" content streamed.

(Sadly this puts their "HD" content in the realm of DVD quality but that is another issue entirely).

With that being the case, a customer could easily over run a 250gb cap with less than 100 hours of "HD" content and no other use of their internet service.

And while there probably won't be enough "HD" content available on Netflix or people even willing to watch that much streaming content this year, if your optimistic predictions for Netflix come true then such a thing could happen much more frequently in 12 to 24 months time.

However by that point, the data caps will have been entrenched in the system long enough that it will likely take more than customer protestations to get them lifted again.

This is almost certainly why ATT is setting them in place now in order to establish just such a situation for when and if companies like Netflix become a serious threat.
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Old 04-12-2011, 06:41 AM
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Luclin you nailed it on the last sentence.

I think, at best, if there's a cap, given HD, it should be 1 TB. 150 GB. is ridiculously low and they just want to do this to gouge people like with cell phone minutes. This bullshit didn't cut it there and it shouldn't cut it here.
Also I've seen quite a bit of HD content offered across the spectrum on Netflix, from movies and tv shows. Maybe it's just what I'm interested in though.
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Old 04-12-2011, 10:09 AM
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150GB/250GB is a pretty big amount of data. Anyone using more then that is likely a heavy downloader and falls into that top 2-4% of people who use an insane amount of data.

I'm a U-Verse customer, so 250GB is a huge amount for me. I don't even get near half of that and we stream Netflix/Hulu (and a few Vudu) movies several times a month. Would I like it to be Unlimited? Sure. But if I don't use anywhere near those caps, I don't really care.
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Old 04-12-2011, 10:27 AM
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Originally Posted by Kosty View Post
Cable companies have raised fees for years despite people bitching and congressional hearings.
In the case of video, there has always been a pretty good justification. The cost to carry channels is set by the content providers and has increased fairly steadily.

Broadband costs have been going down. The cost to deliver a a movie from a provider like Netflix which basically brings the content right to the ISP door is very low (1/100th of a dollar range).

There is zero justification for bandwidth caps that restrict video, except to protect monopolies on video provider services. ISPs do NOT want to go in front of Congress and have their cost structures investigated.

If ISPs want to go the route of metered billing, then fine. Let's get utility pricing at a cost-plus based per GB rate. That would be the worst case scenario for ISPs as their revenue would plummet. Even if I did use 200 GB per month $.20 a month (which would be about 400% markup for wholesale per/GB pricing), my monthly bill would still drop.

Folks who use their internet connection primarily for Facebook and email would end up paying less than a latte for their internet service.


The question is whether these limits are low enough to hit enough customers to cause an issue.
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Old 04-12-2011, 12:02 PM
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These companies are providing a service, no one is being forced to use them. Calling for congressional intervention is ridiculous . If it becomes an issue for enough people the issue will correct itself.
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Old 04-12-2011, 01:23 PM
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Originally Posted by GizmoDVD View Post
150GB/250GB is a pretty big amount of data. Anyone using more then that is likely a heavy downloader and falls into that top 2-4% of people who use an insane amount of data.

I'm a U-Verse customer, so 250GB is a huge amount for me. I don't even get near half of that and we stream Netflix/Hulu (and a few Vudu) movies several times a month. Would I like it to be Unlimited? Sure. But if I don't use anywhere near those caps, I don't really care.
Again, the problem will not be with your viewing habits "today", it will be with what they are like a year or so from now when/if streaming companies like netflix actually become a more integral part of the media landscape.

PSound has been claiming that they are going to be competing (at some point) with conventional cable/sat services for customer's entertainment dollars. However a 150/250GB data cap will kill that concept completely as 30 hours a week (4 hours of TV per day) of even Netflix massively compressed "HD" programming would blow past that 250GB cap every month and that is without the end user having any other bandwidth usage for any other purpose at all.
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