Your home internet plan is starting to look more and more like your wireless plan.
And that could cost you.
AT&T announced on Tuesday afternoon that next month it will start to change up how the millions of people who subscribe to its U-verse broadband service pay for internet.
In short, the company is enacting what's called “usage based pricing,” which some refer to as “data caps.”
Usage-based pricing looks at broadband internet use at home the same way most US wireless plans look at mobile data use — if you exceed your plan’s allotment during a billing cycle, you pay more.
As Ars Technica's Jon Brodkin points out, AT&T U-verse subscribers previously had data caps, but the company didn’t enforce them. Tuesday's change extends the data caps, but AT&T also said it will start enforcing them now.
Keep in mind other internet providers, most notably Comcast, are already experimenting with similar plans. There's a good chance usage-based pricing will be standard for all wired broadband one day.
Here's how it works on AT&T, for example.
If you’re an AT&T U-verse subscriber and you go over the data allotment of your plan, then you’re charged an additional $10 for each bundle of 50 gigabytes.
The amount of data U-verse customers get varies depending on their plan, which is based on speed:
300 gigabytes may sound like a lot, but data can add up quickly when you’re streaming video, which is what takes up the most bandwidth in people’s homes. Netflix, for example, can use up to 3 gigabytes per hour for HD, and up to 7 gigabytes an hour for Ultra HD (4K).
AT&T says it will give plenty of warning to those who approach their allotment for the month, sending several emails updating you with your usage. It also has a tool online where you can monitor how much data you're using.
If you're a U-verse subscriber, there are two ways you can avoid data caps — you can pay $30 more per month for unlimited data, or you can subscribe to DirecTV, the satellite provider AT&T bought last year, or AT&T's U-verse TV.
AT&T’s move comes at a time when an increasing number of people are “cutting the cord” and getting their video entertainment online from services like HBO Now, Netflix, and Sling TV, rather than paying for an expensive cable or satellite subscription.
This is a move by AT&T not only to encourage you to sign up for DirecTV, but also make more money from cord cutters. After all, those who binge-watch and rely on streaming services will use more data, and there's a chance that they'll pay more in overage fees or in the $30 extra per month for unlimited data.
"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," Jan Dawson, the chief analyst at Jackdaw Research, an independent research firm, wrote in comments to journalists. "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."
AT&T’s move also comes as Comcast, the largest cable provider in the country, continues to "experiment" with data caps.
Brian Roberts, the CEO of Comcast, said at Business Insider' IGNITION conference in December that people should pay for broadband the same way you pay for electricity or gas — the more you use, the more you pay.
"Just as with every other thing in your life — if you drive a hundred thousand miles or a thousand miles you buy more gasoline," Roberts said.
"If you turn on the air conditioning at 60 versus 72, you consume more electricity," he said. "The same is true for [data] usage, so I think the same for a wireless device — the more bits you use, the more you pay."
