AT&T Set to Trial Usage-based Internet Pricing This Fall

. Monday, June 9, 2008

John Donovan, AT&T chief technical officer, has indicated that AT&T will begin testing usage-based internet pricing starting this fall. Donovan asserts that the tests of usage-based pricing is not an attempt to make more money, but is simply required to add more network capacity.

Donovan told in an interview, “It's almost a taxation issue. Traffic on our backbone is growing 60 percent per year, but our revenue is not.” From that simple statement it’s hard to support Donovan’s previous claim that the testing of usage-based Internet pricing isn’t an attempt to make more money from its users.

Donovan says that usage-based pricing trials are an attempt to encourage more efficient use of a customer’s bandwidth capacity. To a users that may simply sound like another way to say the ability to punish heavy bandwidth users.

Donovan mirrors statements made by Time Warner when it tried to justify the abhorrent new usage-base pricing of its trial in Beaumont, Texas with regards to the small percentage of customers that use the majority of its bandwidth.