Rumor has it that AT&T wants you to LEAVE!

On a recent episode of TWIT, my favorite pundits were discussing the rumor that AT&T will begin throttling its top 5% heaviest bandwidth users on October 1 (see ArsTechnica). Is this evil?

Unfortunately, no, it’s just business. Maybe it’s more like Ferengi business than we care for but it is business nonetheless.

They teach this in business school. I will never forget the day in business school when we discussed how many banks will intentionally try to irritate their least profitable 5% of customers so that they will leave. AT&T, 5% and banks 5%? Coincidence? No, I think there is an M.B.A. or two behind this plot.

It just makes sense. If it were your business wouldn’t you be tempted to do the same thing? Suppose you have 1 million customers. You charge each of these customers $100 per month for their cell phone plan. But you notice that about 50,000 of them are costing you $150 per month. You are losing $2,500,000 off these customers every month! Wouldn’t you be happy if these customers went to your competition?

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