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Charter Follows Comcast With Broadband Usage Caps

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Charter Cable (s chtr) plans to start enforcing monthly data caps on its users in December, according to a company spokeswoman. The cable operator will also implement a congestion management plan similar to the one Comcast (s cmcsa) designed after it got in trouble with the Federal Communications Commission for blocking P2P files in 2008. Charter spokeswoman Anita Lamont emailed me and said Charter will likely post this information to subscribers within the next week (hat tip to DSL Reports who first reported the change was coming).

Here’s what Charter customers can expect:

  • Subscribers to its Lite and Express services will be capped at 100GB of bandwidth per month.
  • Subscribers to the Plus and Max services will be capped at 250 GB per month.
  • Subscribers to its Ultra60 service will be capped at 500 GB per month (previously the Utra60 tier was unlimited)
  • Charter will not charge overage fees for those who exceed the caps, but their account may be suspended

Charter will start notifying excessive users next month to “make them aware of their usage patterns, to help identify possible causes (e.g., unsecured wireless routers or viruses) and review security options with these customers to reduce the risk of unauthorized Internet use,” said Lamont via email. Eventually (Lamont didn’t say after how many times) that user’s account would be suspended. Unfortunately, for those who get these calls, Charter doesn’t yet have a tool to help those customers measure their use, but is working on one. However, when Comcast implemented its caps, it too lacked a measurement tool, and getting one out was a long process, so Charter subscribers may have to wait a while. Lamont expects one next year.

Lamont said that 98 percent of Charter’s 5.2 million customers will be unaffected by the decision to enforce the caps (Charter actually first included caps in its acceptable usage policy in February 2009). However, demand for broadband is increasing every week as folks use more online applications and consumer video from the web. For example, streaming a movie on Netflix (s nlfx) uses about 1 GB per hour, so that equates to about 100 hours of Netflix streaming video each month. Services such as Netflix and Hulu Plus that involve high-quality video streams are only becoming more popular and pervasive as more consumers connect their televisions to the web. We made this argument back in 2008 when Comcast implemented its 250 GB per month cap and continue to believe that such caps could act as a threat to innovation.

Currently Charter says the typical U.S. residential Internet customer consumes between 15 and 20 GB worth of data on a monthly basis when taking both uploads and downloads into account. Lamont writes, “The usage thresholds defined within our AUP greatly exceed current typical residential use and accommodate future growth.” I reached out to Comcast to find out if changes in user habits had led to increased consumption on its network, and spokesman Charlie Douglas said that the usage was still pretty much the same on its network with the median download for a customer being between 2 GB and 4 GB per month. That’s a wide discrepancy between Charter’s data and even the Cisco (s csco) data that shows worldwide household Internet consumption is 14.5 GB per month.

Charter will also introduce a congestion management policy with a protocol-agnostic approach that’s applied only during periods of congestion (Charter notes that congestion is rare on its network). The policy will affect only the heaviest users (less than 1 percent) in small time increments. Those affected will have their bandwidth limited, but no Internet activities will be blocked. For Comcast’s similar policy see our coverage here.

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11 Responses to “Charter Follows Comcast With Broadband Usage Caps”

  1. I agree and disagree with the caps.

    Since I’m a cable modem user, I have to share my bandwidth with my so called data gobling neighbors…yes, the one that lives next door and spends all day downloading P2P content on his 15 servers…Yes, my network acutally speeds up when he’s not at home. He should have to pay for putting stress on the network just like I would have to for putting 15 Margaritta machines outside by my pool and making his lights go dim when I’m sucking the power during all night rage parties..LOL

    Now, Charter or any other cable company will have to start figuring out a way to make money since more and more people are cancelling their cable programing service ($75 month).I can watch all my shows online (Hulu and Netflix), so I’m real close to cancelling the “TV” side of Charter service. This is a growing trend. Just like the “home” phone is becoming a thing of the past. I dropped my home phone years ago, cable TV is next…but I still need the Internet, and Charter KNOWS this…and like any other company with a vampire like business attitude, WILL profit off our high-usage…and that usage will keep growing and growing…HELL, my dam refrigerator has a Wifi option..WTF??

    Yes, for those of you that like to correct my spelling or grammer..go ahead..there’s always one idiot that get’s clowned on a forum and has to complain about it…I’m sure I mispelled something.

    I’ve traveled around the world on business and this is normal….

  2. I think the difference between electricity and cable is the ability to measure usage. Electricity equates to kilowatt hours which results in more coal (pick your source) being burned. There is a price attached to that coal and therefore a proper costing system can be appropriated. However, in cable, a standard measure for usage is hard to determine. Therefore, how can a variable cost be associated with cable usage?

  3. I think the difference between electricity and cable is the ability to measure usage. Electricity equates to kilowatt hours which results in more coal (pick your source) being burned. There is a price attached to that coal and therefore a proper costing system can be appropriated. However, in cable, a standard measure for usage is hard to determine. Therefore, how can a variable cost be associated with cable usage?

    Don’t get me wrong, I agree with goldflowpoints that a usage charge would be appropriate as it is in any industry. It regulates the service to accomodate the 98% of customers to have fair access as to not be interrupted by the 2% hogging bandwidth. The matter is the arbitrary usage measures that the cable companies have initiated. Are they accurate and reprsentative of overall customer usage? With new technologies being implemented, the amount of customers utilizing streaming data will increase dramatically. Without a proper cost measuring process in place, “normal” customers are likely to recieve exorbitant bills. (It seems the definition of a “normal” or “average” customer will soon be redefined in the internet community via netflix, hulu, etc..).

    As for Stop the Cap, it seems oddly similiar to those fighting copyright protection rights of musicians over P2P file copying. Which ultimately broke down to someone wanting something for free. Although, I would support their overall mission to protect customers from a corporation becoming abusive. Freedom of Speech.

    Oligopolies are annoying, no doubt about it. However, with the increase usage of fiber optics, wireless telecommunication, and satellite, I find the cable companies will have less of a competitive advantage to take advantage of customers and their limited options.

    As for the account suspension, I am not sure how that is going to result. To suspend for 6 months as the next post demonstrates, immediately eliminates 6 months of future cash flows. This could only be justified if the expense of providing service to this customer has a present value exceeding the net present value of future cash flows. I wonder how the stockholders feel about this?

    2 cents.

  4. Well, living in Wisconsin, and having Charter, my cap went into place starting on November 12th. I am sitting at 25 Mbps and have the 250 gig cap. Since they do not offer the so-called Ultra60 in my area which would give me the 60Mbps and 500 Gigs, I am stuck. I am one of those crazy users who will go over that 250 gigs before the month is up. I can not even pay extra to extend my cap. The best I can do is go to a business account, which right now sits at $249/month for 25Mbps, which includes no cap.

    After talking to numerous people on the phone, they are basically using the 3 strike rule. They will let me know 3 times that I went over the limit, and on the 4th time they suspend my account for 6 months.

    Going from unlimited to a cap really feels like I am sitting in the “internet taxi cab” where the meter is always running, and I now question everything I do.

  5. Actually, we were the first to report the coming enforcement of caps at Charter.

    Stop the Cap!’s the coordinating center for consumers livid about usage caps and working together to fight them. We were successful in beating back Time Warner Cable’s usage caps in April 2009 on behalf of consumers and we invite Charter customers to get involved in the fight.

    Phillip Dampier

    • Phillip, my position is that it sounds reasonable for the cable companies to charge more or less based on speed and quantity of data so long as they do not discriminate based on the content of the data. For example, when I consume more electricity or gas, I expect to pay more for it. Why should it be different for the internet? Should not a heavy gamer or movie downloader, who puts a heavy load on the network that potentially impacts the experience for the majority of lighter users, pay more for such heavy use? I assume Stop the Cap does not agree with this, and I wanted to know if you could help me understand why. Thanks.

  6. Way to completely misunderstand the difference between a median and a mean, Stacey. Cisco doesn’t mention the median user at all in their study. There is no reason the average can’t be 14.5 GB while the median user remains at 2-4 GB. In fact, Cisco pretty much agrees with Charter by saying 1% of users represent 20% of traffic.

  7. once usage is sold in tiered capped plans it becomes in the interest for the cable companies to have heavier users. therefore at least to me it would make sense for them to do away with the speed tiers since faster access likely translates to more GB’s that bump customers up to higher cap limit plans.