48 Comments

Summary:

Comcast is expanding its usage-based broadband trials. Given the larger roll out, it looks like a 300 GB cap plus a $10 overage fee that gets you 50 more GB is the winner.

Comcast
photo: AP Photo/Douglas C. Pizac

We may be living in an era of growing gigabit connections, but Comcast will not go gently into that dark night of broadband-only subscriptions replacing its lucrative triple play. The nation’s largest broadband provider (with 20 million subscribers) appears to be rolling out a trial plan that offers a 300 GB cap on service with a $10 overage fee for every 50 GB above that.

Or put another way, Comcast wants to charge 20 cents per gigabyte when it comes to overage fees, which translates roughly into 40 cents per hour of HD television streamed via the internet. That might not be enough to stop you from watching Netflix, but at least Comcast makes a little more off the transaction. Depending on speeds you might pay more or less than this before you hit the cap. Basically what Comcast is doing here is threefold:

And it’s not alone. Caps are on the rise in the U.S.

Broadband caps have grown to cover more Americans. They often come with meters.

Broadband caps have grown to cover more Americans. They often come with meters.

Here’s what we know. DSL Reports said that a Comcast user in Atlanta received a note telling him of Comcast’s new plan, one that the cable giant has slowly been rolling out in southern states. From DSL Reports:

The 300 GB has been in trials in Nashville for some time, but back in August Comcast expanded these trials into the Central Kentucky, Savannah, Georgia and Jackson, Mississippi markets. In October, the cap trial expanded into Huntsville and Mobile, Alabama, as well as Charleston, South Carolina. Generally less competitive Southern markets have been targeted for the trial so Comcast can minimize the number of departing customers.

This steady expansion of the 300 GB cap implies that Comcast may have moved from trialing a new cap to deciding which cap to implement. Charlie Douglas, a Comcast spokesman, says that this is just a continuation of the trials and the first one that will be conducted in a large, urban market. So far, he says that 98 percent of users would never hit the cap and that median usage is now at 16 GB to 18 GB per month.

Back in May 2012, Comcast abruptly eliminated its 250 GB cap (that was introduced back in 2008) amid allegations that it was violating network neutrality by exempting certain types of content traveling over a set number of devices from its data cap.

After changing its policy (and avoiding the network neutrality conversation completely) Comcast introduced a variety of new plans in test markets.

Look, I’m sick of writing this same story about how caps aren’t necessary, how they act as a curb on innovation, how they protect a television business that won’t adapt and how the cable companies don’t actually have a profitability problem when it comes to investing in their networks. What’s happening here is a five-year erosion of unlimited broadband brought about by a fundamentally uncompetitive market. And this massive shift on broadband policy was utterly ignored by the FCC, which refused to even gather data about caps for years.

Comcast doesn’t even attempt to justify caps anymore, because why should it? Consumers need broadband access to do their jobs, complete their education and engage in a variety of leisure activities. Cable broadband of the sort that Comcast offers is far faster and better than the DSL or copper-based fiber to the node options that telcos are providing, so anyone who needs speed will likely have to deal with Comcast.

And in areas where municipalities are deploying gigabit fiber, Comcast is going to try to influence laws, back sympathetic politicians and engage in the rhetoric that anyone using 300 GB is a bandwidth hog, as opposed to an early adopter or an indication of our future bandwidth needs. So as Comcast’s new pricing plan spreads across the south, don’t hunker down and accept this behavior. When Time Warner Cable tried to implement a far-more punitive usage-based pricing plan, users revolted.

State politicians were called and got involved and companies and news outlets raised an outcry. Perhaps Tom Wheeler, the new FCC chair wants to take a look at broadband caps and their effects and rationales given the U.S. broadband market. As Microsoft and Sony gets set to release new game consoles with online delivery of games that can range in size from 10 to 50 GB in size, perhaps they should step up and ask if users should pay a $10 broadband tax on a game download over and above what they already pay for broadband service.

We tend to see these trials and new caps and feel a moment of outrage, but what we need is a sustained policy conversation and pressure from both consumers and the industry affected. And since everything is going over broadband pipes, increasingly that industry is everyone.

This story was updated at 12:30 with Comcast comments.

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  1. I hope people wake up to this and can get comcast to reverse this policy.

    1. Sure. And healthcare.gov can be fixed, too. And don’t forget free ice cream for everyone.

      Running a network isn’t a hack, or writing in the inverted-pyramid.

      It involves systems that have FINITE limits. NOT INFINITE. As in, duh.

      The Google twins, before they tried grabbing copyrights they did not own, unleashed a demo at Stanford. It consumed — by itself — 28% of S.U. computing resources. They got a lecture and warning from the VP of I.T. for Stanford.

      Hey, Stace — other people have rights, too. Really.

      1. “and engage in the rhetoric that anyone using 300 GB is a bandwidth hog, as opposed to an early adopter or an indication of our future bandwidth needs. ” So russpoter, what you are saying is we should have capped it at 1GB long ago because “other people have rights, too.” And with that, removed the responsibility to “keep up” from the providers altogether. By all means, let’s shield them.

      2. You clearly have absolutely no clue how large-scale networks work. Leave the decisions to the IT crowd who actually know what they’re talking about.

      3. russpoter must work for Comcast or is very ignorant of how cheap network upgrades are.

        Hey, genius. How much do you think internet traffic was increasing 20 years ago? How expensive was it to upgrade back then compared to now?

        This is the kind of simple minded fool who thinks network traffic is precious.

        Sure it is not infinite, but theoretically, they can keep expanding the capabilities cheaper and cheaper every year.

        I mean dude- you sound like one of fools who were spouting same bad logic about dial up service and how broadband would never over take dial up because it cost too much.

        God! People like you DESERVE to get ripped off and often.

      4. Russpoter get a clue. Your argument is flawed. The reason the system is FINITE is the cable companies themselves lobby for an FCC mandated MONOPOLY. So now they can PRICE GOUGE vs true capitalism which could solve this problem.

        1. Ingemar Kenyatta Durty Monday, December 30, 2013

          Is this true capitalism like the ‘true socialism’ the Castro fanboys talk about?

          Capitalism is what brought us the caps. Capitalism is what brought us the corrupt politicians that don’t care about the caps. What is this ‘true capitalism’ rhetoric we are now using to defend the flaws? Data caps and other corruption, this IS capitalism.

  2. Just when I thought that I couldn’t possibly hate Comcast more than I already do, wrong again.

  3. 300GB won’t go very far when you’ve purchased a nice new 4k TV set, and are trying to watch p60 high motion sports events (needing high bandwidth to minimize encoding artifacts). Similarly, when Hollywood gives in and starts to distribute 12-bit high quality color (perhaps at 48fps progressive), 300GB will be a drop in the bucket.

    Existing Bluray use relatively efficient codecs and require 20 to 30GB or so to deliver clean 8-bit 24p 2k. Even with the added efficiency of HEVC (ostensibly a doubling over AVC/VC1), 4k p48 or 12-bit color will require at least 60GB (probably 100+ for high quality; and high quality is why you just spent multiple thousands of dollars on a 4k TV set!). You won’t get to view too many programs at high video fidelity under your 300GB cap.

    Monthly bytes-sent usage caps are just a tool to slow adoption of technology that legacy cable-TV HFC infrastructure can’t easily support (and to generate cash when consumers finally cable-cut and buy content from Netflix, or directly from the movie studios and producers).

    In almost all markets, there is only a single residential internet service provider that can sustain very high bit rate downloads/streaming. And that provider is imposing financial burdens to protect its turf. Consumers in most markets have NO ALTERNATIVE. The FCC and government officials are once again failing to protect the american public.

  4. What we need is public ownership of broadband delivery … it is really the best way. There is no need for a company like Comcast to be abusing their monopoly power.

    1. I wholeheartedly agree. Google needs to roll out Fiber to more cities ASAP.

      1. Oh please! Why in the world would we want to trade one evil company for another evil company! We need public ownership and or open competition in the broadband space instead of these ridiculous anti-competitive monopolies granted by our politicians.

        1. Great article! I agree with the need for a publicly sponsored minimum broadband service. I see this as not unlike public ownership of shared highways.

          1. Public ownership of the Internet similar to the highways is not going to be a winning strategy. A better analogy would be a government run utility – but all those are metered/usage based and not pleasant service. But the highway analogy is a great way to view the Internet. Where I live the highways are horribly congested and it doesn’t matter how much capacity you build – it just fills up. Our freeways have 55 MPH onramps only to run into a 5 mile per hour traffic jam. We implement traffic meters and pacing on the ramps and interchanges – still congested. It is the “traggedy of the commons” – without disincentive or cost for a resource it is always over-consumed. A government run service would never invest in the backbone and peering enough to provide you with enough capacity to fill your 1Gbps access links and consume 1TB per month. The people wanting unlimited caps are like the people wanting to drive down the highway shoulder as if it were their own private lane bypassing the traffic jam. Can’t stand those people.

        2. Do you know just much Dark Fiber there is in cities like Atlanta? 15 years ago Bellsouth rolled out IFITL which for a while was wonderful until the company lost some very good techs at the top.

          You can thank both political parties for the mess that is the United States of America’s broadband.

          Every year this nation falls behind in broadband technology only because of the restrictions that Comcast and Verizon have convinced the tech illiterate in local, state, and Federal governments.

          We should be seeing company after company pushing fiber that last mile to homes, but they cannot. AT&T owns most of the Dark Fiber that has just been sitting here in Metro Atlanta.

          It is a crime. I was one of the first homes to have Fiber run to my home in the 1990’s. Amazing how that died so fast until you realize we have the same group of people who used to charge us for long distance and dozens of other fees to just make calls that cost nothing to them.

          What Comcast is trying to do here hearkens back to those days.

          I just fired their phone and tv service in my home. I will use their internet at a higher tier to raise that cap to 900GB a month. But I will now stream everything from now on.

          Comcast needs to trim that fat at the top. Those multi million dollar salaries would go a long, long ways in upgrading their archaic and poor, poor, poor internet backbones.

  5. “We feel we’re not making enough money despite being most people’s only choice. Oh, I know! We’ll just regress Internet quality to the 1990s, and these poor fools can’t do a thing about it!”

  6. Two diverging points here. 1. There ability to install caps. 2. Anticompetitive nature of broadband service.

    Dealing with point 1 first, it’s hypocritical to not talk about wireless providers who’ve been doing usage based pricing for years. Where is the outrage with them?

    Point 2, lack of broadband competition is a problem, but cable companies have spent billions on capital expenditures to get the network where it is today. Barriers to entry for competitors are IMMENSE, and technology doesn’t really allow for easy entrants.

    Finally, by default, this blog caters to tech enthusiasts who will use a lot of data and don’t want to pay more. However, the vast majority don’t use as much data and shouldn’t be asked to subsidize your usage. The reality is that Comcast wouldn’t be doing this if it didn’t make sense for the majority of their users.

    1. Wireless providers are feeling the pressure on usage based pricing as well because their infrastructure is being commoditized as well. This kind of play by Comcast opens the door for them to replace them with wireless services that are improving every year. The main problem for them isn’t technology but the slow and silly FCC that stifles wireless innovation.

      If they have many other customers that are only using 5-10GB per month than but still paying the $40-60 for connectivity then they have plenty of revenue streams to cover the supposed 1% that use significantly more data. They have the hardware to do proper qualify of service queuing and congestion management so this is all about money. They need to run a more efficient operation.

    2. ” However, the vast majority don’t use as much data and shouldn’t be asked to subsidize your usage. The reality is that Comcast wouldn’t be doing this if it didn’t make sense for the majority of their users.”

      This has got to be the most ignorant, naive statement on this topic. Nobody is subsidizing the usage of anyone else. With the infrastructure in place it doesn’t cost more to transfer 400GB a month than it does to transfer 100GB a month. Even though we call it the internet super highway it’s not like a car where is costs more gas to travel further.

      1. I love tech guys debating this because they have tunnel vision on the topic, and no other evidence factors in. You’re wrong about people using more data not costing ISPs more. They have to implement data management hardware/software to manage the network effectively. Plus, they’re trying to ensure a quality experience for everyone, not just the 1% of bandwidth hogs. We’ve all experienced times of heavy traffic when speeds are slower, and the caps are meant to alleviate this pressure.

        Are the caps only to manage the network, of course not. It’s also economics. The demand for broadband is there, and they know that people using more than 300GB a month are probably the ones who are will to pay for extra. They know that limiting video consumption over IP will benefit their traditional viewing experience. All self-serving motives.

        I think the bigger question is do they have the right to impose caps, and the answer is an unequivocal YES. Until the market bears it out, or the government gets involved, they have the right to impose caps, and will.

    3. > it’s hypocritical to not talk about wireless providers who’ve been doing usage based pricing for years.

      Wired != wireLESS. They’re two totally different businesses who each have totally different laws governing them. Comparing them is stupid and distorts the issue.

      > lack of broadband competition is a problem

      There was supposed to be competition, but the majors played dirty and squeezed the little guy out. I worked at an ISP startup from ’94-’97, and I can tell you first hand the bells refused t open their networks as the LAW required.

      > cable companies have spent billions on capital expenditures to get the network where it is today.

      This is a steaming load of BULLSH!T, and proof that you’re either grossly ignorant, or a paid shill. Since 1994, *EVERY* American with a phone or cable has paid collectively over ~$350 BILLION in those ‘fees’ that get tacked onto your bill every month.

      “estimates have pegged a nationwide Google Fiber deployment at somewhere around $140 billion.” – Forbes: http://www.forbes.com/sites/timworstall/2013/04/09/google-fibers-great-but-why-were-all-not-going-to-get-it-shows-the-american-economic-problem/

      We’ve all paid for gigabit fiber to our homes THREE TIMES OVER already, so where the F#CK is it? Better yet, where’s my refund?

      >Barriers to entry for competitors are IMMENSE

      More bullsh!t. If it’s so hard, why is anyone doing it at all?

      >technology doesn’t really allow for easy entrants.

      LIES and FUD.

      >this blog caters to tech enthusiasts who will use a lot of data and don’t want to pay more. However, the vast majority don’t use as much data and shouldn’t be asked to subsidize your usage.

      Do you have *ANY* idea how cheap bandwidth is these days? Amazon VERY successfully turns a PROFIT selling bandwidth from their S3 service at $0.120 per GIGABYTE!!! The REST OF THE WORLD has vastly superior internet at a fraction of the cost we pay here, and there is absolutely NO technical nor business reason that it’s not possible here.

      http://aws.amazon.com/s3/pricing/

      > The reality is that Comcast wouldn’t be doing this if it didn’t make sense for the majority of their users.

      The reality is that Comcast wouldn’t be doing this if it didn’t make sense for the majority of their SHARE HOLDERS.

      ftfy

    4. #1- People have been complaining about the outrageous mobile prices for data for the same number of years there has been data on cells phones. I ABSOLUTELY HATE all of the telcos who say 99% of people will never hit the cap, so people won’t even notice, blah, blah.

      #2 – please stop even trying to justify a company who knows they have a monopoly in areas and know that people are using more data, so they raise prices so they can charge more later. – “Comcast wouldn’t be doing this if it didn’t’ make sense for the majority of users”??? Let me fix that, Comcast is doing this because they want to make sure they continue to make billions in profit and slowly try introduce metered pricing to screw people later om.” -there fixed that for you.

      It doesn’t take a brain surgeon to see that people can barely afford to buy cable and internet. When you try to save money, you can’t because you are FORCED to buy bundled garbage to have 200 channels to watch ten. Then you can’t just buy internet unless it is double the price without cable channels, or a phone nobody needs.

      When Cable allows people to choose exactly what they want and charge accordingly, which would save millions of people money, by not buying something forced on them, then talk to me. Until then, these companies only care about their profits at the expense of ripping people off.

  7. Richard Bennett Saturday, November 9, 2013

    This story always goes the same way:

    1. Carrier X imposes a data cap 15-20 times higher than median usage level.
    2. Carrier-hater Y complains that Holodeck over IP will certainly be held back by the data cap.
    3. Policy wonk Z asks: “What makes you think the data cap won’t get bigger in the future?”
    4. Carrier-hater says: “Carrier’s cap protects its lucrative TV products”
    5. Policy wonk says: “Carrier makes more money from IP than from TV, but your momma doesn’t care about IP.”
    6. Carrier hater complains about customer service, monopolies, spying, and “The President’s Analyst” etc.
    7. Wonk says “A 300 GB cap which isn’t imposed until the user exceeds it for several months in a row isn’t going to prevent anyone from playing X Box.”

    Seriously, how many times are we going to play this game?

  8. I remember AOL had to drop their cap plans to compete with ISP’s. Now AOL’s service has dried up and ISP’s no longer have them as competition. I bet that data cap isn’t in place in the same city Google has their fiber internet services.

  9. It’s fun arguing against a Straw Man, isn’t it?

    Of course, it all comes down to first principles.

    If you think the market will self-correct, then you have no problem with carriers doing what they claim they need to do to maintain their networks and plan for the future.

    If you’re more of a market skeptic (I am), then you may worry that broadband caps are just monopolistic rent seeking, and argue that these caps are more evidence that the government needs to step in and do some combination of promoting competition, supporting municipal broadband services, and regulating broadband price schemes.

  10. The number of ISPs that have caps will grow until it’s almost 100%. Internet service providers should be classified as utilities and therefore their rates should be approved by government agencies after public hearings.

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