Comcast Suspends Data Cap, Prepares for Tiered Pricing
Comcast users outside two as-yet-unnamed markets will have unlimited data usage during the testing of Comcast's new data pricing model.
Comcast customers finally have something to be thankful for. The largest cable ISP in the United States is switching its 250GB monthly data cap for a tiered model with a higher cap and a method to purchase extra data.
Comcast has long been accused of trying to force the internet into being a secondary service to its cable television business. Netflix CEO Reed Hastings is among the critics who accuse Comcast of using the data caps to protect its cable television business from the threat of free or cheaper alternatives online, such as Netflix, Amazon, and YouTube.
Comcast executive VP David L. Cohen said in a conference call with reporters that a cap which causes users to be denied service if they exceed it sends the wrong message, especially since it only affects a “small percentage” of their customers, though the company declined to elaborate on what that percentage is. He continued, saying that they “want to send a signal to customers that our network is robust and has tremendous capacity. We don’t want customers to have a sense that [they] can’t use this app on the internet.”
Comcast is preparing two trials in different markets. Both trials will impose a 300GB cap with a $10 charge per 50GB beyond that, but one trial will increase the cap with faster tiers of internet service. “This will effectively offer unlimited use of service,” bragged Cohen. “Customers can buy and use as much data as they like.”
Cohen then admitted that Comcast doesn’t want its users to think the network has unlimited capacity. The cap is being raised a mere 50GB and the company is committing considerable time and effort into monitoring customer usage for an early warning and automated billing system. This comes at a time when more and more people are ditching cable television in favor of online video. This trend will cause data usage to continue to grow over time, as video streams consume a lot of bandwidth. A feature-length HD movie can use more than 3.5GB of bandwidth, for instance.
The dirty little secret is that this trend is actually a good thing for Comcast. The price of moving data across networks continues to fall, and Comcast is paying a smaller and smaller percentage to move data into and out of its networks. This begs the question of why Comcast is even bothering to keep a cap, which they declined to explain in a clear manner. This leaves two possibilities: either Comcast is truly having an issue with a small percentage of its userbase using too much bandwidth and are looking for a less draconian (read: PR nightmare) system that cuts users off of the network, or they are laying the foundation of a future where they stand to rake in exorbitant profits from a large percentage of users regularly passing their data cap and having to pay for extra data.
Comcast may also be attempting to draw attention away from their new XBox service, which allows their customers to stream the company’s cable offerings through their Xbox using the IP protocol. Critics complain that this violates the FCC net neutrality rules, since the data cap doesn’t apply to this service, but Comcast claims that they’re in the clear because it isn’t “technically” competing with online video services because they’ve allocated a new slice of their cable pipeline to the product.
Until the trials finish, Comcast customers will have no data caps, though local traffic congestion measures, where speeds are throttled for heavy data users when local networks become congested, will remain in effect, so customers should download to their hearts’ content.