Cable Companies Follow Cell Carriers With Tiered Data Plans
October 2, 2012

Cable Companies Follow Cell Carriers With Tiered Data Plans

Enid Burns for — Your Universe Online

Now that most consumers are getting used to tiered data plans from cell carriers, cable companies are looking to follow suit. Comcast is leading a small contingent of cable companies testing tiered offerings to consumers in limited markets.

Comcast began its trial in Tucson and Nashville starting October 1, USA Today reports. The Comcast trial is for "usage-based pricing plans," which put a cap on the amount of data a customer can download. Under a usage-based plan, consumers will be charged for online activities such as email, web surfing, streaming video and other content, and playing video games, among other activities.

While the test is just now going into effect, Comcast announced its plans to test usage-based billing back in May. As part of the plan, Comcast said it will raise the data allowance to 300 gigabytes, which is 250 GB under the flat-fee pricing most current users face.

Cisco Systems says the average household worldwide used 26.2 GB of data per month in 2011, the USA Today article says. Cisco estimates that by 2016, that usage will go up to about 84 GB per month. The estimates are averages, and some households go well over that allotment.

A data cap of 300 GB is about equivalent to about 1000 hours of standard definition video from sources such as Netflix; 300 hours at "Best Quality" setting on Netflix; 130 hours of high definition video. With streaming music, the Philadelphia Inquirer's estimates that using Pandora's free version, which runs at 64 kbps, users can stream about 10,950 hours of music per month without exhausting the data cap. A premium version of Pandora or Rhapsody, which streams at 192 kbps, users can stream for roughly 3,650 hours without problem. Of course when users combine a few of these activities and add in web surfing, household data caps can easily go over the limit.

These days consumers are adding more and more devices to Wi-Fi, and these devices will eat into the monthly diet of 300 GB. Tablets, cell phones and even some appliances that connect online all factor in to the mix. With cell phone accounts turning to tiered billing with monthly allotments on data, many users switch their phones over to Wi-Fi when at home.

Comcast went ahead with its test in Tucson and Nashville. However when the company announced plans to move toward usage-based plans, several content companies such as Netflix and Hulu made appeals to lawmakers to block Comcast and other companies from implementing such limits on customers.

If the plan goes through, pricing will start at about $40 per month for 300 GB of data. Comcast will offer an allotment of 600 GB per month for about $200. The charge for going over data limits will cost about $10 for each additional 50 GB of data.

Comcast is not the first internet service provider to price plans based on data, but it is expected that Comcast will be the most likely to enforce overages. Cox Communications, Charter Communications, CenturyLink and Mediacom have monthly caps, however USA Today reports that those caps are often not enforced.