Comcast, cord cutting and the rise of broadband data caps

At a time when consumers stream more video and more movies than ever before, Comcast wants to limit the amount of data its broadband customers can use. Customers in some states, mostly in the Southeast, will soon have data caps of 300GB a month, and the new pricing model may go national before too long. (Hat tip to DSLReports.com for spotting this news first.)

Comcast isn’t eager to discuss the changes, which are, in effect, price increases. However, its Data Usage CAP FAQ page lists affected cities in about a dozen states. Starting Dec. 1, customers in the affected markets face 300GB monthly usage caps, with $10-per-50GB overage fees.

Comcast wants you to believe the issue is about network congestion and “fairness,” but its offer of unlimited data for an extra $30 to $35 a month — depending on the city — belies that claim. If congestion was really the issue, it would make no sense for Comcast to let some customers use as much data as they want.

While 300GB is a big chunk of data, the increasing number of people who have “cut the cord” and abandoned conventional TV offerings, and who stream video to various devices, may burn through that cap. A typical HD movie consumes, 8GB to 15GB, while a movie in the new 4K format uses 100 GB of data, according to FileCatalyst, which offers file transfer platforms.

Comcast responds to cord cutters with broadband data caps

Cord cutting is clearly behind Comcast’s new broadband data caps. The company likely hopes to have these caps in place before cord cutting truly goes mainstream and eats into its traditional source of revenue: pay TV services.

REUTERS/Jonathan Ernst

Cord cutting is a national, not regional, phenomenon so it seems likely that the company will eventually go national with its new pricing policy. In fact, a Comcast executive said last year that he expects the company to roll out “usage-based billing” — in other words, data caps — to all of its customers within five years, according to ArsTechnica.com. Speaking with investors, Comcast Executive Vice President David Cohen said, “I would predict that in five years Comcast at least would have a usage-based billing model rolled out across its footprint.”

Not surprisingly, Comcast’s customers, many of whom have complained to the FCC, and consumer advocates are not happy with the idea.

Consumer advocacy group Free Press this week called on the FCC to investigate Comcast’s caps, saying “Comcast continues to exert its dominance in the uncompetitive market for high-speed Internet access,” and that the caps are “part of Comcast’s scheme to stifle innovation and choice in online video and cloud-based services.”

With more than 20 million customers, Comcast is the largest broadband and cable TV provider in the United States. If it succeeds in widely instituting data caps, competitors will likely follow suit.