Wednesday, March 16, 2011

AT&T shoots self in foot, reloads

AT&T has made a major announcement that represents a significant degrading of the quality of their internet services. Starting May 2, AT&T will begin capping the bandwidth for all of their internet offerings. Many in Lawrence are already familiar with caps such as these, as Knology (previously Sunflower Broadband) has implemented them for years.

Needless to say this announcement hasn't gone own well amongst AT&T's customers.

AT&T's excuse, that such draconian new restrictions are needed to prevent "network congestion" has been ably debunked - likely the real reason for AT&T's move is that many customers are downgrading their U-Verse television service and preferring to get content via sources such as Netflix, Amazon, iTunes, and Hulu. Bandwidth caps are a dagger aimed at the heart of services such as these - after all, who's gonna watch TV via Hulu and HD movies via Netflix when they have to keep a careful eye on the meter? Much easier to just upgrade your U-Verse TV plan (which isn't subject to the cap - how convenient!)

Anyway, for those of us in Lawrence, U-Verse has suddenly become much less competitive with Knology. Let's stack up how the top of the line plans for both providers now compare.

Knology GoldAT&T U-Verse Max Turbo
Download speed50 Mbit24 Mbit
Upload speed1 Mbit3 Mbit
Bandwidth cap250 GB/month250 GB/month
Bandwidth meterUpdated hourlyUpdated every several days
Base price$60$65
Overage Fees$25 per 50 GB$10 per 50 GB
GraceUnofficial, can call CS to get overage reduced3 overages allowed over account lifetime before charges begin to accrue
Bandwidth trackedUpload and downloadUpload and download

(sources: public web sites from AT&T, Knology and first-hand sources from both companies)

So, basically, with AT&T, you get faster upload and cheaper overage fees although you pay a slightly higher base fee and have slower top download speeds. Knology gets you faster downloads, but it will be more expensive if you go over your cap. As a side note, AT&T's metering is a joke - it will only be updated every few days, making it almost impossible to figure out what might be using bandwidth. Knology's meter is update in near realtime, making it a useful tool. Of course, in both cases, the meter's accuracy is "in the clouds" - unlike, say, your electrical meter, there is no independent body which calibrates and audits the meter. Do you trust AT&T (or Knology) to keep accurate track of your data usage?

Either way, the only winner is the service provider, and you, the customer are the loser, because you can't take advantage of new innovative video services or important security measures like online backups without the anxiety of watching a meter run and the risk of billing surprises.

What will the Broadband Observer do? Probably stick with U-Verse....for now. All things being equal, still like the higher upload speed and slightly lower overage prices. However, Knology could upgrade their upload speed by flipping a switch, and will probably adjust their overage fees to stay competitive. When they do so, AT&T will likely be kicked to the curb at our house.