Cable Tech

Comcast to Raise Caps, Test Overage Fees

Comcast Corp. (Nasdaq: CMCSA, CMCSK) will raise its monthly broadband usage cap from 250 gigabytes to at least 300GB for all cable modem tiers and test a new usage-based, metered model that will charge customers extra if they exceed those consumption thresholds.

Comcast didn't say where it intends to conduct the pilots and how long it will run them before settling on a new policy, but it has already suspended its current policy, which sets the monthly limit at a static 250GB per month.

That old "excessive use" policy, introduced in the fall of 2008, didn't charge customers extra if they went above the limit, though they did face the possibility of getting their service turned off if they exceeded the cap repeatedly. The new policies will essentially create an unlimited service, so long as the heaviest broadband users are willing to pay up once they exceed the initial bandwidth thresholds.

"We're out of the cap business," Comcast EVP David Cohen declared during a call with reporters on Thursday afternoon.

Comcast intends to test a couple of approaches early on:

  • Start with a 300GB limit for its lowest level tiers and increase it for its faster cable modem service tiers, such as Blast and its Docsis 3.0-based Extreme service. Customers who exceed those limits would pay, for example, $10 for every 50GB they consume.
  • Apply a 300GB cap to all service tiers before charging more for a yet-to-be-determined bucket of gigabytes.

Although Comcast is looking to raise its consumption limits before fees come into play, it insists that very few customers exceed or come close to exceeding the old 250GB cap, but didn't offer any specific numbers. However, the median usage for Comcast's residential users is 8GB to 10GB per month, said Cathy Avgiris, Comcast's EVP and GM for communications and data services.

Why this matters
Comcast's push toward a new broadband usage policy comes into play as Netflix Inc. (Nasdaq: NFLX) airs complaints that usage of the operator's Xfinity TV app for the Xbox 360 game console does not count toward the old 250GB cap, claiming the policy raised network neutrality concerns and violated the the conditions of Comcast's acquisition of NBCUniversal LLC . (See Comcast Denies It's Prioritizing Xbox Video and Netflix Cranks Up the Net Neutrality Heat .)

But Comcast's new direction is indicative of a larger trend. Comcast is the latest broadband ISP to move toward a metered model for broadband, following in the footsteps of other service providers that have recently launched or are now testing new usage-based policies, including Time Warner Cable Inc. (NYSE: TWC), AT&T Inc. (NYSE: T) and Suddenlink Communications .

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— Jeff Baumgartner, Site Editor, Light Reading Cable

craigleddy 12/5/2012 | 5:32:42 PM
re: Comcast to Raise Caps, Test Overage Fees

I've been waiting for the net neutrality crowd to start bashing Comcast's plan in comments here, and even started thinking that maybe they feel Comcast is doing something right for a change. But then I see the other LR news item about Netflix and Level 3 griping about Comcast's Xbox service. Comcast can't win for losing.

One side note: I believe that Rogers Communications in Canada rewards customers who stay below certain monthly usage levels (I'll play along with Comcast and stop calling them caps). So if you use less bandwidth you can actually save money on your service. A novel idea, don't know if anyone's going that route in the U.S. 

Flook 12/5/2012 | 5:32:41 PM
re: Comcast to Raise Caps, Test Overage Fees

Ok, here goes--Netflix is right and Comcast is dead wrong AND unfair if it excludes  Xfinity for Xbox from the cap.

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