Your home Internet will soon work a lot more like your phone's data plan, if it doesn't already.
AT&T, the second-largest broadband Internet provider in the US, is imposing "data allowances" on its customers. U-Verse customers now face limits between 300GB to 1TB depending on the their existing plans, AT&T said. This should be enough for 100 to 400 hours of high-definition video streaming per month, the company estimates.
That may sound like plenty. And AT&T isn't the first to experiment with data limits for home Internet service. But it's the kind of quiet change that signals a broader transformation. In the near future, the Internet that you get at home is going to start looking a lot more like the Internet you get on your phone. And that could result in a massive increase in costs for broadband subscribers.
Here's how it could add up.
Previously, U-Verse customers had a hypothetical 250GB cap, but that cap wasn't enforced. Now customers who go over will have to pay $10 per extra 50GB, and those who want unlimited data will pay $30 extra per month. Customers who also pay for a television service from AT&T--either U-Verse TV or DIRECTV--will get unlimited data for free.
Meanwhile, the country's largest broadband provider, Comcast, has been testing a 1TB data allowances in about 15 different metropolitan areas. Customers who go over their limits will be charged $10 for every extra 50GB they use, or pay an extra $50 for an unlimited plan.
The changes might not have a huge effect in the short term. According to a Comcast announcement, the average Comcast customer uses only about 60 gigabytes of data per month. The problem is that today's average use and tomorrow's average use could look quite different once services like Netflix and Amazon Prime start offering more content in 4K resolution. The more customers shift their attention from pay television to streaming video services, the more data they'll use. Unless data limits increase along with usage--or Comcast decides not to expand its test--AT&T and Comcast's new pricing schemes could add up fast, especially in households with multiple people watching different streams at once.
Increased prices could mean more than a strain on the monthly budgets of existing customers. They could mean the difference between having Internet access and not having it. A plurality of households surveyed by Pew Research cited cost as the main reason that they did not have high-speed Internet connections. Meanwhile, the number of households with broadband connections dipped slightly, from 70 percent in 2013 to 67 percent last year, while the number of households opting to pay only for mobile Internet access but not fixed-line Internet access grew.
Ratcheting prices up further will only increase the digital divide, but the difference won't just be between those who have Internet access and those who don't. The cost of data limits could also divide the population between those who can take full advantage of high-bandwidth applications like streaming and video conferencing, and those who have to curb their usage for fear of incurring overage charges.
To be sure, it's not hard to see why Internet providers want to charge customers based on usage. The new plans would seem to allow them to charge customers who just can't get by on less than a terabyte of data more money for the exact same level of service, while at the same time encouraging everyone else to use less data. But even leaving aside questions about the accuracy of data meters, neither of those scenarios offers any benefit to customers. Comcast admitted in an oft-cited technical paper that heavy Internet users don't affect the performance of their neighbors' connections. Instead, the company has framed the issue as one of fairness.
"The idea is those who use more pay more," Comcast spokesman Charlie Douglas told WIRED last year.
More than just leading to higher monthly bills, critics argue, these data limits discourage cord-cutting—that is, canceling your pay TV package and just watching streaming services like Netflix or Sling TV. Data rate hikes could also create special advantages for providers' own streaming services. Comcast, for example, exempts its Stream TV service from its data limits, a practice known as "zero rating." Meanwhile, AT&T plans to offer a streaming service called DIRECTV Now later this year.
Cord-cutting can already be expensive once you add up the costs of streaming video subscriptions, pay-per-view streams, and paid video downloads. Adding data overage fees to those costs could be just enough to persuade people to stick with traditional pay TV.
The Federal Communications Commission is already considering whether zero rating and data caps are anti-competitive. The agency's net neutrality rules don't ban either practice but do grant the FCC the right to make case-by-case decisions.
That said, the FCC's authority to regulate broadband providers has faced increased pressure since the agency issued its net neutrality order last year. Just last week House Republicans unveiled a budget proposal that would slash the agency's budget and prohibit it from enforcing net neutrality rules until after a series of court cases have been decided—the latest in a series of attacks on the agency.
It's not all bad news for cord-cutters and data gluttons, however: the FCC and the Justice Department have banned Charter from charging "usage based prices" for seven years under the terms of its merger with Time-Warner Cable. But that's cold comfort seeing as the resultant cable giant—which will displace AT&T as the second largest broadband provider in the country—has no plans to compete head-on in markets where Comcast dominates.
In the absence of real competition, the days of data-counting look like they're coming soon. Then again, just a couple years ago net neutrality looked like it was about to go the way of the 3.5-inch floppy. Then a broad coalition of activists and policy makers pressured the FCC into re-regulating Internet providers and passing fairly strong net neutrality rules. Broadband caps could help Internet providers find cracks in those rules. But fighting higher monthly bills is a cause voters can probably get behind.
