Comcast Takes a (Tera)Byte Out of Caps
Comcast first put an Internet usage cap in place in the fall of 2008, and while broadband speeds have risen dramatically since then, Comcast's data cap has remained relatively steady, topping out in most markets at 300GB per month. Until now.
Starting on June 1, Comcast Corp. (Nasdaq: CMCSA, CMCSK) is moving to a 1 terabyte data cap in markets where the cable company enforces the consumption threshold with overage fees. Those markets include cities in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maine, Mississippi, Tennessee, South Carolina and Virginia.
Most everyone agrees that a terabyte data cap is generous considering that average Internet usage falls well below that ceiling. However, there are always fears that Comcast will impose a cap now and profit unreasonably from it at a later date when usage rises.
There's also the matter of Comcast's data meter application, which is supposed to track subscriber usage, but has fallen short on a number of occasions. Consumer advocates say Comcast should improve its monitoring accuracy before collecting any fees for excessive use.
To Comcast's credit, however, the company has remained far ahead of the market in setting its upper-limit data caps. According to Comcast, less than 1% of customers use more than 1TB of data monthly, and a "typical customer uses only about 60 gigabytes of data in a month."
Meanwhile, elsewhere in the market, Charter Communications Inc. will have to forego any use of data caps for the next seven years as part of the conditions for regulatory approval of its merger with Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks . (See Wheeler Recommends Charter Deals.)
In an earnings report today, TWC CEO Rob Marcus said he believes the cable broadband market can remain healthy with or without usage-based pricing.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading