Apparently the 5% of AT&T subscribers that upload and download from the web on a regular basis have become “bandwidth hogs”, taking up 50% of AT&T’s network capacity.

Therefore, in an attempt to curb this trend, AT&T Inc., the largest internet service provider in the country, has begun to limit the amount of data that subscribers can use each month.

Now, don’t get too worried, these restrictions, which started on November 1st, only apply to AT&T subscribers in Reno, Nevada. But if all goes well, AT&T may broaden the download limits to other areas.

In addition, the limitations will depend completely on download speeds. If you are using the slowest DSL service, users can download 20 gigabytes per month at 768 kilobits per second.

Your limits will increase with download speed, sometimes up to 150 gigabytes per month at 10 megabits per second. In order to even fill that amount, a subscriber would have to download consistently at max speed for 42 hours.

So, while the everyday normal email checking and web surfing won’t take an AT&T subscriber into the realm of their maximum limit, those users who use programs like NetFlix on a regular basis, may find their monthly movie fix limited; a monthly cap of 60 gigabytes allows for 3 full length movies per month.

Comcast Corp., the nation’s second largest internet service provider, who also happens to be AT&T’s biggest competitor, officially began a similar program in August with limits of 250 gigabytes per subscriber.

In many other industrialized nations, internet providers are heading in the opposite direction – offering greater capacity to meet growing demand. And when usage caps are necessary, the limits are exponentially greater than here in the U.S., as Betsy Schiffman at Wired’s Epicenter blog points out:

In Japan, which boasts one of the most advanced fiber-optic broadband markets in the world, one carrier recently implemented a usage cap, but it was 30 GB per day — roughly an-eighth of Comcast’s total monthly cap.

AT&T says anyone who goes over 150 gigabytes will automatically be enrolled in the download cap. Go over your monthly allotment, and you’ll get a warning the first month, after that you’ll be looking at $1.00 per gigabyte overage charge.

You can track your gigabyte usage via AT&T’s website in order to ensure you aren’t hitting your limit. And, if you have fulfilled about 80% of your download fill, AT&T says it will send you a complimentary note informing you that you’re getting close to your maximum download capacity.

AT&T hopes that by placing these limitations they will be able to find a solution that allows them to equitably provide affordable broadband services to all customers.

So, is AT&T making a bad move here, by potentially stifling the flow of innovation from web-based companies, most of which rely on the unlimited set price?

Or, is this a smart move for these companies so that they can set future customers expectations?

Personally, I am not a fan on having limits on something that many people rely on, and will most likely come to rely on even more in the future.

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