AT&T Brings Down the Broadband Overage Hammer

AT&T today announced that it would begin enforcing the cab on U-verse broadband usage it’s had in place since 2011, and at the same time raised the cap while providing new options for buying unlimited broadband. The comments below may be attributed to Jan Dawson, Chief Analyst, Jackdaw Research. Jan can also be reached at or (408) 744-6244. 

AT&T’s announcement is another sign of the ways in which it intends to leverage its DirecTV asset to cross-sell services. The offer of unlimited broadband for those who take either U-verse or DirecTV on the same bill as U-verse broadband is clearly intended to incentivize subscribers to both take that bundle of services and to consolidate their billing relationship with AT&T. However, the enforcement of the usage cap is a sign that AT&T doesn’t want customers cutting the cord on pay TV and then using their broadband for significant video consumption. AT&T says around 4% of its customers will fall afoul of the new caps, and there’s likely a very high correlation between these customers and those who don’t take pay TV and instead consume mostly Internet video. That online video habit will now either cost them $30 for unlimited broadband or an upgrade to a more expensive broadband package with a higher cap.

AT&T is spinning this move as being about choice, but there continues to be no evidence that modestly heavy usage of broadband plans actually incurs more incremental cost or puts any strain on landline broadband networks, especially those of recent vintage like AT&T’s U-verse. As such, it’s going to be hard to sell this to consumers as anything other than a money grab on AT&T’s part.

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