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Citing a need to curtail network congestion, AT&T is imposing bandwidth caps on all its broadband subscribers. Henceforth the ISP's DSL subscribers will be limited to 150GB of bandwidth per month, while U-Verse subscribers will be capped at 250GB. Customers who exceed the bandwidth cap more than three times during the life of their account will be charged an overage fee of $10 per additional 50GB of data. 

In making this change, AT&T joins Comcast, which limits all of its subscribers to 250GB per month, as well as Time Warner with its 100GB cap. Like Comcast, AT&T is assuring its customers that the cap will affect just a very small percentage of its users-those who use "a disproportionate amount of bandwidth," which typically means peer-to-peer users. Interestingly, research reports that P2P use is in decline. Its study found that in the fourth quarter of 2010 only 9 percent of Internet users in the U.S. used peer-to-peer networks, compared to 16 percent in 2007. What's more, of those using P2P, downloads per person dropped from 35 per quarter in 2007 to 18 per quarter in 2010 

Indeed, critics of AT&T's bandwidth cap point to the fact that claims of network congestion aren't backed up with data that can be validated: We just have to take the ISP's word for it. Furthermore, if congestion actually is an issue, the costs of relieving it can be relatively inexpensive, involving centralized upgrades to the ISP's multiplexer and backbone, as opposed to upgrading individual last-mile lines. Given that AT&T's wireline operating expenses are shrinking, according to public record, couldn't the company, which reported $20 billion in net profits for 2010, afford a bit more investment in its network? 

Or maybe the caps have to do with another issue entirely: an issue known as Netflix. In March, an NPD Group study said Netflix owns 61 percent of the digital movie market share thanks to its Watch Instantly streami service. Comcast's on-demand digital video takes a distant second place with 8 percent. And everything else falls behind that. Linley Group analyst Joe Byrne sees a connection: "AT&T, Comcast, Verizon, and the other large ISPs depend on their video services (U-Verse, FIOS, etc.) for profits and thus have a vested interest in limiting their customers' access to other sources of video. Hence, these ISPs concoct schemes such as caps that curtail video consumption under the guise of fairly delivering service." It's worth noting that AT&T says the cap will not apply to U-Verse subscribers' IPTV traffic, which the company says travels on a dedicated portion of the line. 

If the caps aren't intended to thwart cable cutters, they raise still other questions. While it's true that very few people currently consume more than 250GB of bandwidth per month-or even 150GB, for that matter-is it farfetched to think that someday more of us could? Streaming a two-hour HD movie uses approximately 3.5GB of bandwidth, according to Netflix. TV shows use a third to half of that. No biggie, right? Then consider all the other online services we use regularly-Facebook, YouTube, Steam, etc.-and how new ones are being introduced all the time, like Amazon's tantalizing Cloud Player. In fact, we're continually being persuaded to store more of our stuff in and perform more of our activities on the cloud. Now multiply that usage by the number of people in your household. Suddenly it seems conceivable that AT&T is laying the groundwork for the majority of us to pay overage fees.