Data Caps May Be Comcast's Response To Proposed Net Neutrality Rules
May 16, 2014

Comcast Could Impose Data Caps On Its Customers

Peter Suciu for - Your Universe Online

Those who use massive amounts of data will simply have to pay more. That is in essence what Comcast told its customers on Thursday. The nation's largest Internet service provider (ISP) and cable giant also responded to the Federal Communications Communication's (FCC) net neutrality proposal – and the two events could be closely tied together.

Comcast is currently seeking the FCC's approval for its $45-billion buyout of Time Warner Cable, a move that would make the Philadelphia-based company the most dominant provider in the United States with more than 30 million cable TV, and high-speed Internet customers across the country – including top markets such as New York, Los Angeles and Chicago.

"Comcast remains committed to a free and open Internet and [is] working with the FCC on appropriate rules for all players across the industry," Comcast Executive Vice President David L. Cohen wrote Thursday in a blog post.

The other take away on this is that Comcast's Cohen, speaking at the Moffett Nathanson Media & Communications Summit on Wednesday in New York, suggested that within five years all Comcast customers could once again have monthly bandwidth caps imposed on home broadband usage.

Cohen, however, suggested that most users would not use up the allotment and have to pay more.

"I would also predict that the vast majority of our customers would never be caught in the buying the additional buckets of usage, that we will always want to say the basic level of usage at a sufficiently high level that the vast majority of our customers are not implicated by the usage-based billing plan," Cohen said in a statement as reported by Digital Trends. "And that number may be 350 — that may be 350 gig a month today, it might be 500 gig a month in five years, but it will never — I don't think we will want to be in a model where it is fully variablized and 80% of our customers are implicated by usage-based billing and are all buying different packets of usage."

According to reports, Comcast is currently running several pilot projects in select markets in the United States to test its bandwidth caps. These include options that allow users to combine download speeds with bandwidth caps, and the higher the speed the higher the bandwidth cap.

In another test case, one that Comcast executives prefer, all users would have 300GB per month of data – and the company would charge $10 for every extra 50GB used after that. These test cases are not actually new, as PC World reports the cap pilot projects have been ongoing since 2012.

Comcast didn't provide an option for ultra high-usage customers, and instead those who went over limits received warnings. Too many warnings and users face seeing their account suspended for a year. The Internet and cable provider also experimented with bandwidth throttling for heavy users in 2009, PC World reported.

This move could be most worrisome to those so-called "cord cutters" – users who opt to ditch cable TV for streaming services such as Netflix and Hulu.

Forbes contributor Amadou Diallo, a self-proclaimed cord cutter, did note that the vast majority of cable customers fall far below a 300GB threshold, and that an FCC study conducted in 2012 found that a typical consumption rate is around 40GB per month..

However, for those cutting the cord, they may be faced with paying more to watch video content via streaming services. Diallo noted, "The upcoming onslaught of 4K streaming options will only increase data usage."

According to a new Sandvine study, cord cutters are in fact using more Internet data than other users. The study found that in North America those subscribers who exhibit cord cutting, are dominating network usage – consuming on average 212GB a month, more than seven times the 29GB of data a typical subscriber uses. That is equal to 100 hours of video each month.

The Sandvine study also found that streaming video content now accounts for the majority (54 percent) of total monthly network traffic.