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AT&T Caps Netflix Streaming Costs At $68K/Yr

Posted by timothy on from the for-a-hamburger-today dept.

theodp writes "What would you say if you went to join a gym and were told that it could cost you anywhere from $360 a year to $68,000 a year for the exact same usage? Don't be ridiculous, right? Well, that's really not so different from what the potential costs of streaming video on an AT&T smartphone are. According to AT&T's Data Usage Calculator, 1,440 minutes worth of streaming video consumes 2.81GB, which — if you manage to keep Netflix fired up all day and night — would result in a $360 annual bill under the grandfathered $30-monthly-unlimited-data plan, or $68,376 under the new $20-monthly-300MB plan. Still, that didn't stop a spokesman from characterizing the new AT&T data plans as 'a great value' for customers."

25 of 433 comments (clear)

  1. So when did... by neonKow · · Score: 4, Insightful

    ...it become our God-given right to stream Netflix 24-7? And to get outraged that there is a bulk discount? AT&T has many, many issues already, so do you really need to contrive a completely unrealistic one to make a point?

    1. Re:So when did... by rtaylor · · Score: 5, Insightful

      It's large.

      My gym charges about $650 per year or $20 for a day. Some have a $10 for an hour fee.

      Are the $20/day people supposed to be outraged at paying $7300 for something I'm paying $650 for, or should they be happy they saved money for something they didn't really want.

      The $10/hour guy would pay $87,600 if they used it all day every day; but why would someone doing that be paying by the hour?

      --
      Rod Taylor
    2. Re:So when did... by PopeRatzo · · Score: 5, Insightful

      Maybe a better question is "how much does AT&T pay for that bandwidth for which they charge $20/250MB?

      The issue might not be who gets the discount so much as "why is AT&T price-gouging for something for which there is so little choice?"

      When you've only got a couple of choices, and AT&T actively works to keep the number choices limited, they have a privileged position. When a company is granted such privilege, they should be held to some responsibility, one of which is not to price-gouge.

      "Price-gouging" is defined as "a pejorative term referring to a situation in which a seller prices goods or commodities much higher than is considered reasonable or fair". Who wants to argue that $20/250MB is "reasonable"?

      --
      You are welcome on my lawn.
    3. Re:So when did... by John+Courtland · · Score: 4, Insightful

      Because their tax dollars helped build and subsidize the infrastructure that AT&T uses.

      --
      Slashdot is proof that Sturgeon's Law applies to mankind.
    4. Re:So when did... by Sentrion · · Score: 5, Insightful

      But corporate lobbyists also spent fortunes to get the government to subsidize their infrastructure. They are free to do what they want with what they bought and paid for. If you want your representatives to actually represent your interests then you should spend the same millions that the corporate lobbyists do. That is how our democracy works.

    5. Re:So when did... by mcgrew · · Score: 5, Insightful

      Not a God-given right, a CONTRACT-given right. I'm not paying by the bit for computer internet access, why should I pay it for internet access on my phone? And BTW, I have AT&T for home internet, the phone is Boost Mobile, unlimited everything for half the price of AT&T's cheapest phone data plan, even if you don't hit AT&T's caps.

      And I could watch TV 24/7 (well, ok, 16/7, stations didn't run late at night back before the stone age) for FREE fifty years ago. I'm still watching for free. Cable? Why? A hundred channels of crap I don't want to watch, most of which are on the internet hosted by their networks (I have kubuntu TV, my computer uses the TV as a monitor).

      Why do you expect me to pay for what was once free, and especially for what's free right now? No wonder everybody's broke, they're throwing their money away on bottled water, TV, radio, exercize, data, music... shit that they can get for free. What a bunch of maroons, as Bugsy would say! Pay five dollars for a goddamned cup of coffee when I can buy a two pound can of Maxwell House or Folgers for ten, and have a whole pot of coffee every day for a month? How fucking stupid would I have to be??? Kids, if you have money to waste, give your charity to the poor, not the rich bastards that own Starbucks and Comcast.

      --
      Free Martian Whores!
    6. Re:So when did... by Anonymous Coward · · Score: 5, Insightful

      Moreover, these Internets make heavy use of public resources. In the case of wireless, it is a public spectrum they are leasing. In the case of wired, they make use of the public right of way. The public has every right to see that its resources are used in a manner that maximize the public benefit, and corporations that cannot meet that challenge should not be allowed to use said resources.

    7. Re:So when did... by neonKow · · Score: 4, Insightful

      They might not have an unlimited plan anymore, but they're offering more than a single $10/hour plan. There are 3 GB and 5 GB plans in addition to the 300 MB plan, which are perfectly reasonable choices if you plan on watching a ton of Netflix.

      No one streaming Netflix 24/7 is going to be on the 300 MB plan, so the fact that it would cost $68K to do so on that plan is as stupid as claiming 100,000 instances of a song pirated is $300K in damages.

    8. Re:So when did... by John+Courtland · · Score: 5, Insightful

      Wait wait wait. So you're saying that AT&T should be granted a near monopoly in the markets it controls (via government-subsidized bootstrapping), and then not be beholden to the tax payers? I'm sorry but I don't think I can take you seriously.

      --
      Slashdot is proof that Sturgeon's Law applies to mankind.
    9. Re:So when did... by b4dc0d3r · · Score: 5, Insightful

      No, that's not a good question, unless everyone is asking it. Text messaging rides on the backs of empty space in the network ping, costing nothing to the provider. But rates have gone up from 10 cents to now 40 cents.

      People will pay whatever they value the service to be.

      I have fought this for as long as I could - I didn't buy a cell phone, I didn't have cable or satellite TV, I didn't pay money for anything I thought was overpriced. But everyone around me did. $500/mo apartment with $140 tv + internet package, and complaining about not having money.

      I told people where they were spending ridiculous piles of cash, they didn't care, they wanted the service. I tried to educate them, honestly I did.

      And your argument that choice is limited doesn't really hold up - Sprint has been offering "truly unlimited" plans. This is basic capitalism. No one cares what it costs to make something, only what they are willing to pay for it. And very few people like me are truly outraged anough to actually not purchase something, they grumble and fork over the cash.

    10. Re:So when did... by billcopc · · Score: 4, Interesting

      The key difference between your gym and AT&T, is choice.

      If you know you're going to hit the gym 5 days a week, you choose the plan that offers the best value, the yearly plan. Every gym user has an affordable option based on their needs.

      With AT&T, if you know you're a heavy user, the only thing you can do is brace for impact. Even the most "generous" plan is very tight - 5gb may seem huge to someone who reads the occasional email or googles trivia at the bar, but for a guy like me who often works over 3G on a laptop, I blow through 2-3 gb per day. Where is the 100gb for $70 plan ?

      Or, if we really want to point out the illogical price discrimination: why does unlimited data only cost $10 on a "standard phone" ? Are the bits any different from bits sent to a smartphone ? Are the zeroes and ones made from cheaper electrons ? Why should the device have any impact on a platform-agnostic network and its costs ?

      Telcos' business models are so full of holes, they need armies of full-time lawyers and spin doctors to keep the ship from sinking.

      --
      -Billco, Fnarg.com
    11. Re:So when did... by Bengie · · Score: 4, Insightful

      They pay for it because of a lack of choice.

      "all other providers (of which there are several) also charge similar fees": This argument only works if all providers have similar coverage/phone-selection/etc.

      There was a recent customer study that showed AT&T had one of the largest customer bases while having a customer satisfaction near 0/5. How does a company have horrible customer satisfaction while retaining its customer base? By having an "effective" monopoly. All the down sides of a monopoly without technically being one. Implicit anti-trust?

    12. Re:So when did... by Lithdren · · Score: 4, Insightful

      I'd be fine with this point of view if we were activly paying other companies to then compete with AT&T with similar tax subsidized plans.

      Instead we have companies like AT&T activly sueing competition from even getting started, and doing everything in their power to maintain that power. Power they have because we granted them a monopoly to get things going.

      Long as they want to be the only game in town, they damn well better be beholden to the tax payer that put them there in the first place. To claim otherwise is Ludicrous!

    13. Re:So when did... by wumingzi · · Score: 5, Informative

      Will I argue that it's reasonable? Errrm. Maybe. Before I start, two things:

      Disclaimer 1: I work in the backbone at T. My opinions are my own. Randall Stephenson gets paid more in a day than I'll make in my entire career to voice Ma Bell's opinions.

      Disclaimer 2: It's fairly hard to calculate what bandwidth costs. The capital expenditure of the large telcos to build their networks runs into tens of billions of dollars. The operational expenditure to keep it running once the costs are sunk is considerably less. We have people who think about this stuff. They don't talk to me.

      From the telco point of view, there are 3 segments to your Internet connection.

      There's the backhaul between the data centers and the Internet. I think most Slashdotters are fairly familiar with the economics there. That bandwidth is cheap as dirt.

      There is the cost of running a dedicated leased line to every fool tower in the US. Not as cheap as dark fiber, but still reasonably cheap.

      Then there is spectrum over the air. That's a very limited commodity. There is a lot of chatter as to whether T (or other telcos) are making the best use of the spectrum they have, but the fact is, we have a certain quantity of it. Once it's gone, there is no more. Neither T, nor VZ nor Sprint nor you or your mom can write a check to make more spectrum appear. It's the long-term opinion of T's upper management that users will exhaust the spectrum capacity we have.

      Another issue was that under unlimited data plans, a very small (i.e. 2% or less) of the customer base were using an inordinate (i.e. 50-60%) of the total bandwidth. Capping customers makes them mad and post angry messages on Slashdot. Thus, let marker forces take over. :-)

    14. Re:So when did... by cpu6502 · · Score: 4, Insightful

      The word you're looking for is not monopoly but cartel (companies colluding with one another to keep prices high). The record companies were prosecuted by the US DOJ for doing that with CD pricing.

      If you believe cellphone companies are guilty too of collusion, then maybe you should start building your case to prove it's true. Can you do that?

      --
      My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
    15. Re:So when did... by sjames · · Score: 4, Interesting

      The SPECTRUM is limited, and there is a hard limit on bandwidth somewhere in there, but we're nowhere near it. Double the number of cells and you very nearly double the bandwidth being carried in the same slice of spectrum.

      The people with the unlimited data plans you speak of using 50% of the bandwidth were the people who actually used their phones the way the commercials all show. If they can't actually support their entire user base enjoying movies and sports telecasts on their phones wherever they are, perhaps they shouldn't advertise it.

    16. Re:So when did... by spire3661 · · Score: 4, Insightful

      I shouldnt have to, that is the job of my government.

      --
      Good-bye
  2. Sounds like my utility company by SJHillman · · Score: 5, Interesting

    Utilities and the like seem to like to do crazy things with billing based on usage. My gas/electric company reads the meter every other month and estimates for the months they don't read based on past usage. I've had a number of months in the past year estimated gas use so high that they mark it as 0 use the next month when they read the meter (which means I'm still paying for gas I don't use because I really doubt it comes to exactly even every time). However, even on months where they bill me for 0 gas use, I still get a nice plump "delivery charge". Isn't this like FedEx sending you a bill because they could have delivered a package even though they didn't?

    1. Re:Sounds like my utility company by jeffmeden · · Score: 5, Informative

      I would get a hold of your local public utilities commission if this is really happening; that's certainly not the way that estimated usage billing should work and you are right that it's bullshit that they basically charge you for 2 months of usage up front and then ride out the cash. Sounds like they either have a super shitty estimation process or they are deliberately trying to pad their books to keep the cash flowing.

  3. Bullshit Strawman by Anonymous Coward · · Score: 5, Insightful

    Yes, because it's entirely reasonable that someone would sign up for the lowest possible data plan, and then use as much bandwidth as possible for every second of every day. Obviously, that plan is designed for people who intend to use streaming very little, if at all, and it is a very good value for those people. No, not as good a value as the old $30 unlimited, but that was obviously not sustainable as phone bandwidth usage increased massively. Remember when the $30 unlimited plan was created, Netflix for the phone didn't exist, and most phones struggled to stream very low res video.

  4. AT&T has a 3GB plan now by alen · · Score: 5, Informative

    3GB data for $30 a month

    article is FUD

  5. Re:not so fast there alarmast headline writers. by Anonymous Coward · · Score: 5, Insightful

    It's still way overpriced. It should be $1 for 1GB. We just need competition and the market will correct itself.

    Well, I think that your plan is overpriced. It should be $0.01 for 1GB.

    See how pointless it is when you make up numbers just to make yourself happy?

  6. Re:not so fast there alarmast headline writers. by jeffmeden · · Score: 5, Insightful

    The max cost need to be in there, and having to pay $70000 just because you forgot to turn off your phone is not a good thing. This is important because people do not see this problem, and tend to laugh at "losers" affected by it. Pressure should be on the Telcos to have fair pricing, not on the customers.

    So no it's not alarmist, it's trying to expose telcos for what they are, and hopefully change them.

    If you "forget" about your phone the battery will die after about 45 minutes of this kind of usage, so, not to worry! And for what it's worth this has been going on ever since the invention of long distance; you have always been able to dig a real deep hole for yourself. Say you call your aunt in Armenia and you both forget to put the phone totally back on the hook; one month later you will have an $86,000 phone bill. Think that's changed any? You can opt to purchase more affordable plans, which is no different than in this scenario, but if you choose to be completely dumb about it yes you can find yourself owing a LOT of money. That's the price of being a grownup.

  7. Re:not so fast there alarmast headline writers. by ifiwereasculptor · · Score: 5, Interesting

    They should prompt you for buying a new data allowance when your expires. And, ideally, they should charge you for Mb, not simply shove another 300Mb/1Gb down your throat. Sometimes you run into your cap on the last few days of the month and would rather simply wait for the refresh instead of paying 100% more for 10% more data.

  8. Re:As long as it's neutral by Anonymous Coward · · Score: 5, Insightful

    Wrong. These are regulated monopolies; we trust them with our very limited spectrum with the understanding that they will provide services that are in our best interest. This includes in terms of price.

    The gradual lessening of service per dollar is a genuine concern.