by Bill Snyder

New Comcast data caps spotlight disturbing trend

Oct 07, 2016
CarriersConsumer ElectronicsInternet Service Providers

The age of data caps and metered broadband is here, though Comcast, the largest ISP in the United States, admits network capacity is not a problem. More companies are likely to follow Comcast's lead, and that's terrible news for consumers.

(Editor’s note: This post has been updated to include information on Cox Communications’ monthly data caps. Changes are marked in bold.)

More and more Comcast customers today are restricted by data caps, even though the company admits its decision to impose those caps is driven by the potential for profit, not network congestion. Comcast, the largest ISP and cable company in the country, this week said it plans to impose data limits in 23 additional U.S. markets, across 14 states, starting on November 1.

The caps are high — 1TB of data — but they open the door for lower caps later on, based on logic that is, to say the least, suspect. And as more and more ISPs rollout data caps, they’re becoming the norm, which is a worrisome trend.

Data caps are so controversial that when Time Warner Cable, Charter Communications, and Bright House Networks merged, the U.S. FCC forbid the conglomerate cable provider from imposing data caps for seven years. Before they merged, a U.S. Senate subcommittee accused two of the companies of overcharging customers by millions of dollars a year.

AT&T, which sells Internet service under its Uverse brand, limits customers to 300GB, 600GB, or 1TB, depending on the plans they choose. Yet another ISP, CenturyLink, is “experimenting” with data caps in some markets. And Cox Communications quietly updated its website to indicate that all data tiers now have a cap of 1TB per month, with the lone exception of its “Gigablast” gigabit tier, which now has a 2TB monthly cap.

Comcast data caps bad for all ISP customers

Data caps are becoming the norm, and that’s very bad news for consumers, who increasingly choose to stream video instead of paying exorbitant fees for pay TV. No other reason exists to impose such caps than the desire to increase profits. Here’s how Comcast justifies its data caps: “Our data plans are based on a principle of fairness. Those who use more Internet data, pay more.  And those who use less Internet data, pay less.”

Sounds fair … except it isn’t true. Unlike wireless providers, broadband ISPs have capacity to spare, and Comcast admits as much. In a memo leaked last year, Comcast told its sales people that data caps were not related to network congestion.

A good analogy is a gas station. If you buy five gallons of gas, you pay half as much as you would if you pumped 10 gallons. That’s not the case with Comcast data. With one exception, customers who use less data pay the exact same amount as customers who use up to 1TB. (Customers who use less than 6GB a month get a $5 discount.)

When data caps hit the new areas next month, they’ll bring the total number of markets affected by the policy up to 34, according to Comcast’s website. Customers who exceed the limit will be charged an additional $10 for every 50GB, up to $200 a month.

The page also says “99 percent of our customers do not use a terabyte of data.” If that’s accurate, why even impose these new data caps?