Broadband caps are spreading across the U.S., and even if Comcast did recently raise its cap of four years from 250 GB a month to 300 GB, the growth of usage based broadband is a negative and insidious trend that could hurt our ability to innovate. So I’ve documented which ISPs have caps, and how they have structured them in the chart below, as a way to help people understand who is capping their service and why. The chart contains the top ISPs, and covers more than 80 percent of actual subscribers.
What we talk about when we talk about caps.
The rise in caps has let ISPs influence the internet in subtle ways — most of which seem harmful to innovation. The first is to take away the idea that wireline broadband is an unlimited service, despite the ability of smaller ISPs to build out networks that don’t come equipped with caps. As you can see from the chart below, most of the ISPs are implementing overage charges associated with their caps. This isn’t really about managing their networks for congestion. If it were, they’d implement a different type of pricing model that cost users more to surf at peak times. No, this is about protecting their entrenched TV businesses as well as keeping the price for service high, despite the decreasing costs to send traffic over the network.
It’s also about grabbing more of the profits from the growth in internet services such as Netflix and Google, although caps take out those frustrations on users as opposed to the over-the-top providers. Instead of providing faster speeds for users and encouraging the growth of services that would require users to upgrade to those speeds, ISPs have taken their control of the last mile and are charging for bytes. So instead of paying more for better service, customers will pay more for what they use. This is a model that works for certain industries (think gasoline and electricity) but when it comes to encouraging more usage and innovation on the internet, the utility model seems short-sighted. Other ISPs may be thinking this same way.
For example, what if Intel had told game developers or Microsoft not to write software that would stress its chips — or penalized programmers for every megahertz of performance they used over a certain threshold? We’d end up with crappy software running on slower machines. Instead Intel encouraged people to write software for its chips and invested billions in making them faster so people would upgrade. Along the way it opened up market after market for the PC. Utility industries aren’t typically hotbeds of innovation.
The Federal Communications Commission, which is charged with tracking the spread and quality of U.S. broadband, has so far been quiet on this issue, not even collecting data to track how the shift to capped broadband has affected users, much less the industry. That may be changing. But it’s time that we ask if we want the internet to look like the utility or a source of continued innovation.
|Comcast||300GB per month||Comcast suspended its cap in May 2012 after raising it to 300GB. It’s unclear what form the cap will take.||none||Comcast is testing an overage fee that lets you pay $10 for 50 GB more.|
|AT&T||250GB or 150 GB per month||Subscribers to AT&T’s faster Uverse product have a 250 GB cap while those subscribing to basic DSL have a 150 GB cap.||none||Customers pay $10 for 50 GB|
|CenturyLink||150 GB per month to 250 GB per month||Plans with speeds of 1.5Mbps have a 150 GB cap. Plans with speeds greater than 1.5Mbps have 250 GB cap.||none||None, you’re cut off.|
|Cox||30GB-400GB per month||Faster tiers have higher caps.||none||None, you’re cut off.|
|Charter||100GB – 500 GB per month||Faster tiers have higher caps.||none||None, you’re cut off.|
|SuddenLink||150GB to 350 GB per month||Faster tiers have higher caps.||none||Customers pay $10 for 50 GB.|
|MediaCom||150 GB to 999 GB per month||Faster tiers have higher caps.||none||Customers pay $10 for 50 GB.|
|Cable One||1GB, 50 GB and 100 GB per month||Caps depend on the type of plan one chooses; Economy, Preferred Upgrade, Elite Upgrade||Usage from midnight to 8AM doesn’t count against the cap for Preferred and Elite upgrade. Economy users can download from noon to midnight without it counting against the cap.||Economy users pay $10 per gigabyte. Preferred and Elite upgrade users pay .50¢ for each additional GB.|