AT&T uses federal subsidies to offer expensive, slow broadband

by Steve Blum • , ,

Never give a sucker an even break.

AT&T’s federally subsidised wireless Internet service is costly, compared to what wireline customers pay. The fixed wireless service has supposedly been offered in Georgia for a couple of months, and AT&T announced it was expanding it to rural customers in eight more states immediately, with nine others, including California, slated to get it by the end of the year. It’s difficult to tell whether or where AT&T is actually delivering it, though. Entering zip codes into its “Check Availability” web page gets you a “AT&T Fixed Wireless Internet isn’t in your area yet” response, even in previously launched Georgia counties.

Pricing and service levels are reasonably clear though, at least as clear as such things ever are. If you want the nominal 10 Mbps download/1 Mbps upload speeds that AT&T is required to provide where it’s getting federal Connect America Fund (CAF) money, the rack rate is $99 to have it installed and then $70 a month for the first 160 GB of data. Every 50 GB (or fraction thereof) of data over that cap will cost an extra $10, up to a a maximum overage charge of $200.

It’s costly bandwidth, compared to the standalone ADSL2-based wireline service I get from AT&T. I pay $57 a month for “up to” 12 Mbps download speed, with a 1,024 GB cap and no currently defined upload speed. Do the math: customers getting the federally subsidised wireless service would have to pay $250 per month for the same amount of data I get, at a lower advertised speed.

Signing up for bundled DirecTv service or for a term contract can bring the monthly price down, but that’s true for wireline subscribers too.

There’s also reason to question whether AT&T will actually deliver on the required 10 Mbps down/1 Mbps up service level. As is typical, the AT&T web page touting the wireless service qualifies its promise of “at least” 10/1 by adding “data speeds can vary depending upon various factors”. Right. Like trees, weather, and your neighbors streaming House of Cards on Netflix.

AT&T and Frontier Communications have scooped up the CAF money on offer in California. Frontier hasn’t provided any information yet on how or if its federally subsidised service will differ from the norm, but it’s clear that AT&T is using the money to lock rural Californians into service – for decades to come – that’s slower and more expensive than what their urban and suburban cousins enjoy.