The Extreme 305 tier will cost $299.95 per month and will be available in most major markets in its Northeast division. Concurrent with those speeds, users will also get Wi-Fi at 155 Mbps throughout the home, and Charlie Douglas, a Comcast spokesman, says future in-home routers for the Extreme 305 tier will eventually use the new gigabit 802.11ac standard. Current Wi-Fi gear from Comcast uses 802.11n.

But even as it pushes ahead with faster tiers, Comcast is still testing variations on its broadband cap that it first launched in 2008. At the time, the cap was a straight 250 GB per month, but as usage grew and more users hit the cap, Comcast raised the limit to 300 GB per month in May and said it would test out new variations of the cap.

The first of those appeared in Nashville, Tenn. last month with Comcast charging users $10 for a bucket of 50 GB over the 300 GB cap. That rate is fairly common among the ISPs who cap their service — AT&T and SuddenLink charge that much for users who exceed the cap. The Tucson cap is another variation of a common cap — users who subscribe to faster tiers will get higher caps. Here’s what it looks like:

• Economy/Economy Plus, which costs $39.95 unbundled, has a cap of 300 GB
• Internet Essentials, a $9.95 plan offered to select low-income homes, has a cap of 300 GB
• Performance Starter, which costs $49.95 unbundled, had a cap of 300 GB
• Performance, which costs $62.95 unbundled, has a cap of 300 GB
• Blast, which costs $72.95 unbundled, has a cap of 350 GB
• Extreme 50, which costs $114.95 unbundled, has a cap of 450 GB
• Extreme 105, which costs $199.95 unbundled, has a cap of 600 GB

However, because of the pricing in place around the service and the cost of buying a 50 GB bucket, users don’t really get an advantage from switching to a higher tier in order to avoid a cap. In fact, the pricing really doesn’t offer any incentive to choose a higher-speed tier for those solely worried about a cap.

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The cable provider was ordered by the agency to provide access to “a reasonably priced broadband option to consumers who do not receive their cable service from the company” under the Commission’s Order approving the Comcast-NBCU transaction in 2010. To further show its ire with Comcast, the FCC also said Comcast would have to provide the stand-alone reasonable broadband-only package for another year — until February 21, 2015.

As part of Comcast’s 2011 agreement to buy NBC Universal the FCC tacked on several conditions that ranged from not prioritizing Comcast or NBC traffic over other packets on the Comcast network, to requirements that Comcast allocate channels for minorities. Comcast has touted its success including a new channel from Sean “Diddy” Combs, but entities ranging from individual technologies to Michael Bloomberg have complained.

In this case the FCC investigated complaints that alleged Comcast was hiding its “Performance Starter” service from customers. From the FCC release:

Under the order the Commission required Comcast to offer standalone broadband services on terms equivalent to packages that bundle broadband and video cable service. Comcast was ordered to offer a broadband service with a download speed of at least 6 mbps at a price no greater than $49.95 for three years. The Commission also prohibited Comcast from raising prices on the required broadband service for two years. Finally, Comcast had to “visibly offer and actively market” standalone broadband Internet access service to highlight the availability of this special service and other standalone broadband services.

Comcast didn’t admit fault as part of the settlement, but it did lay out some cash and pledge to make its cheaper stand-alone service more visible. It will train its call agents, make sure the offering is visible on its web site and it committed to a major marketing campaign around the Performance Started service for 2013. Ironically this comes at a time when Verizon is pulling back on offering stand-alone DSL.

However, the actions taken by the FCC may help convince folks like Senator Al Franken who wrote the DoJ and FCC a letter claiming that the agencies were letting Comcast run roughshod over its conditions. This move is one small step toward showing that the FCC isn’t some toothless regulator beholden to the very industry it regulates.

Update: Here’s Comcast’s response:

“Comcast has incorporated the extensive commitments and conditions from the NBCUniversal transaction into the DNA of our business practices, including the commitment to offer standalone broadband Internet. We are proud of our standalone broadband offering of ‘Performance Starter’ service – we rolled this product out in just one month, the fastest Comcast has ever deployed a brand new service simultaneously throughout its footprint.

As is often the case with services associated with government orders, the FCC had questions on how the service might have been rolled out in a different or even better way. We are pleased that Comcast and the FCC were able to address such issues cooperatively and constructively in a consensual manner. We look forward to continuing to offer and market Performance Starter in additional ways and with additional outlets. We believe this product offers a choice consumers want in the marketplace.”

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He lists several examples where the agencies have delayed their response to complaints about Comcast behavior, explains that those complaints are a direct result of Comcast’s growing power as a content owner, a distributor and last mile pipe owner, and then points out that Comcast’s actions are anti-competitive and are exactly what the agencies were trying to prevent when they imposed those conditions. The bulk of the letter concerns disputes on what content Comcast offers to its pay TV subscribers and where certain content is placed in various cable tiers.

However it also brings up the problems we have already laid out with regard to Comcast letting certain providers of its Xfinity service bypass the Comcast bandwidth cap. There is also the matter of  Sony’s decision to hold off on offering a streaming video service due to concerns about the inherent advantage Comcast has in delivering its own online video. For details on the conditions Comcast is violating as well as a technical breakdown of why Comcast is basically lying to consumers and regulators when it says the Xbox traffic is different and thus shouldn’t count against the cap, check out this post.

As a a parent, Franken’s letter strikes a familiar chord. Franken is basically telling the agencies that they are allowing their spoiled and ill-behaved child to walk all over them and the innocent bystanders that are consumers, and maybe they shouldn’t give it what it wants this time around because Comcast is likely to hurt consumers again. From the letter:

If your agencies are going to approve large telecommunications and media mergers based in part on the conditions that are imposed on the transaction, the public needs to be assured that your agencies are carefully monitoring and reviewing these transactions to ensure corporations are complying with the obligations you imposed.

Much like you want to applaud the person who steps in front of a rampaging child in a restaurant and tells him or her calmly to sit down and stop screaming, while the child’s’ parents ignore their kid’s behavior and continue their dinner as if Junior weren’t driving other diners crazy. At least in that situation anyone has the power to stand up and stop the errant child, but unfortunately when it comes to Comcast, the number of participants who can shake some sense into the child or the parents are few. Hopefully Franken’s letter has some effect.

Image courtesy Shutterstock.

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The chart so far looks very similar to the results of last year’s second quarter, which was the first down quarter in the pay TV market’s history. SNL Kagan reported that the pay TV industry lost 216,000 total subscribers in that quarter, with cable companies losing most of the pay TV subscriber base and satellite and IPTV providers unable to make up the difference.

Some caveats: Two major public pay TV operators — Cablevision and Dish Network — have yet to report their earnings, so this chart could look slightly different next week once we see how many subscribers they’ve gained or lost. It’s possible that Dish net adds could push the number positive. At the same time, there are a number of smaller, Tier 2 and Tier 3 cable operators that don’t publicly report their numbers. So we probably won’t actually know for sure if the industry lost subscribers again until later on in the month, when SNL Kagan updates its quarterly report.

Also, operators like to remind us that the second quarter is historically a very weak quarter for cable companies, as most networks take the summer off and play mostly reruns — and who wants to pay for that? But SNL Kagan already reported declines in pay TV subscribers throughout the top 15 DMAs in the U.S. in the first quarter. And a seasonally weak second quarter, combined with a down economy and rising cable programming and equipment rates, will likely lead to lower subscriber numbers when the final numbers come out.

With that, the question of how online video services affect customer willingness to pay for a cable subscription will also likely re-emerge. Most pay TV operators have held fast, saying they’re seeing no real effect from the emergence of services like Netflix or Hulu. And even Netflix has focused on what it calls the trend of “cord mending,” trying to downplay the threat that it might be to the broader TV industry.

That said, it’s clear there is some cause for concern within the industry, specifically as broadcasters begin thinking about adding TV Everywhere-type authentication to their online video services. Fox announced last month that it will soon require pay TV subscribers to log in to view its shows the day after they air; viewers who aren’t cable subscribers (or who don’t subscribe to partnered distributors) will have to wait 8 days to watch its broadcast shows online.

When the plan was announced, Fox affiliate sales chief Mike Hopkins said that concern about cord cutting was one reason the broadcaster decided to implement TV Everywhere-type authentication. It’s still an open question, however, whether restricting access to its content will act as an incentive to keep viewers subscribing to cable, or if it will ultimately drive them to piracy.

Photo courtesy of (CC-BY-SA) Flickr user Akarsh Simha

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