Will AT&T Put the Squeeze on HD Streams?

Well, it had to happen. After a week’s worth of fun stories about streaming HD content, reality comes crashing in. AT&T announced today that it is testing tiered broadband access in Reno, Nev., joining a growing list of ISPs around the country that are metering bandwidth.
GigaOM has the full story on AT&T’s new metered service. From my colleague Stacey’s post:

AT&T says it will have tiers ranging from 20 GB per month to 150 GB per month with a $1 per-gigabyte overage fee for new customers. Later this year, existing AT&T High-Speed Internet customers in Reno will become a part of this trial if their monthly usage exceeds 150 GB in one month. These customers will receive a usage amount of 150 GB per month.

While ISPs claim these bandwidth restrictions are meant to ensure better network management, it’s more about protecting their own video businesses. According to Dave Burstein at DSL Prime, a third of AT&T’s downstream traffic is now web audio-video, and that traffic is growing at a faster pace than overall traffic. Stacey asked AT&T spokesperson Seth Bloom whether the telco was worried about drawing the ire of the FCC because much of the traffic AT&T is concerned about competes with its U-Verse service; Bloom did not have an answer.

Metered broadband wouldn’t pose as much of a nuisance if the world of online delivery was only in standard definition. But now that more services like Netflix (S NFLX), Xbox and Apple (s APPL) are upping their HD offerings, caps become more important.
What’s unknown at this point is how low video-delivery companies like Netflix will get their bit-rates. The lower the bit-rate, the more content users will be able to squeeze in under that cap, and before extra fees get tacked on.
Roku, the maker of the Netflix Player set-top box, said over the weekend that it “will be using Advanced Profile encodes which will deliver HD at substantially lower bit-rates than what Xbox is offering.” This reinforces what the company had told us before — that it’s not concerned about bandwidth caps because new technologies allow for higher-quality at lower bit-rates. These advanced compression techniques, however, will have some impact on the quality and whether the content will truly be in HD.
Comcast customers just spent their first month under a 250 GB bandwidth cap, but with these new HD streaming services rolling out over the coming months, this will be the time to see how many people start hitting their limit.