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Comcast Says No to Usage-Based Billing

Jeff Baumgartner
5/24/2011

Don't expect Comcast Corp. (Nasdaq: CMCSA, CMCSK) to follow AT&T Inc. (NYSE: T) and CableOne and launch a usage-based billing (UBB) model for broadband services anytime soon. (See Will Cable Follow AT&T's Lead on Usage Fees?)

Speaking at a Barclays Capital conference this morning, Comcast CFO Mike Angelakis was adamant that UBB models just aren't in the cards at the moment, and that the MSO is content with its current Internet usage policy, which keeps "excessive use" in check via a monthly 250-gigabyte cap. (See Comcast Draws the Line at 250GB.)

"First of all, [to] be clear, we're not adopting it," Angelakis said of UBB.

But never say never. "We've deployed the instrumentation that people need to ... gauge how much they're using, and if we ever wanted to go to usage-based billing or consumption-based billing, we could possibly do that," he added.

The topic came up because AT&T has just started to enforce a new policy that charges DSL and U-verse customers extra if they go above their limits. CableOne is looking to do the same for its new Docsis 3.0 service. And, as Time Warner Cable Inc. (NYSE: TWC) and AT&T showed earlier, setting or testing UBB policies can create a heap of PR trouble that Comcast would just as soon avoid. (See CableOne Tries Out Overage Fees and TWC Mothballs New Metering Trials .)

"I don't know why we would disrupt a pretty good run we're having right now," Angelakis said. Comcast added 418,000 high-speed Internet subs in the first quarter, giving it a total of 17.4 million.

Some other tidbits from Angelakis's talk:

  • Comcast is using IP to distribute video to tablets, smartphones and connected TVs as more and more intelligence moves to the cloud, but "set-top boxes, I think, will be here for a while," he said. The comment comes a few days after a review of the MSO's "Xcalibur" service, which uses an souped-up DVR, leaked out. (See Reviewer Sneaks A Peek at Comcast 'Xcalibur' and The Disappearing Set-Top .)

  • It's unlikely that Comcast will try to expand its cable empire incrementally through M&A during the industry's next phase of system consolidation. "To go from where we are today and add a couple million customers, I'm not sure that does anything for us," he said.

  • Comcast sizes wireless backhaul as a $1 billion opportunity.



  • Comcast is also heading up-market to target companies with 20 to to 250 employees using Metro Ethernet, but Angelakis reiterated that it's getting "negligible revenues right now" from that segment even as its small-business efforts continue to see rapid growth. (See When Will Comcast's Move Up-Market Pay Off?)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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    DCITDave
    DCITDave
    12/5/2012 | 5:04:32 PM
    re: Comcast Says No to Usage-Based Billing


    Why does it matter if a broadband provider is charging by the bit or giving you a data cap? The point, in both scenarios, is that you're not getting unlimited bandwidth for a flat monthly fee.


    So in a broad sense, Comcast is no different at all from AT&T or anyone else that meters bandwidth usage.

    yarn
    yarn
    12/5/2012 | 5:04:31 PM
    re: Comcast Says No to Usage-Based Billing


    What a great question! The only differences lie in where the caps are placed for the various tiers and what the policy is when you reach a cap. Do you charge overage fees, do you trottle bandwidth speeds down (cap), or do you send warnings (and perhaps disconnect repeat "offenders")?


    The best answer probably depends on what the consumer prefers: a flat rate (i.e., cap usage) or unlimited use (i.e., pay overage). But it's clear now you can't have both as a  consumer.

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 5:04:29 PM
    re: Comcast Says No to Usage-Based Billing


    Right, the caps that Comcast and Charter set, for example, give subs a relatively high monthly limit before they could be asked to move to a more expensive biz-class tier or risk getting turned off. The ATT and CableOne example would add dollars to the bill by the gigabyte above the threshold, and those thresholds are much lower than the other "excessive use" policy example.  But agree that both examples do away with the unlimited all you can eat model.  Verizon and Cablevision are among SPs that haven't set any such caps.


    For grins, I had to check my Comcast consumption... still well below the monthly limit, according to the meter: 80GB in April, 42GB so far this month. JB

    DCITDave
    DCITDave
    12/5/2012 | 5:04:29 PM
    re: Comcast Says No to Usage-Based Billing


    Both plans are examples of operators trying to obfuscate how much they charge consumers per bit because they don't want us to know. If we knew, we'd be able to compare rates and service terms more accurately and the biggest most profitable companies like AT&T and Comcast might not hold up.


    They might. But how will we know?


    ph

    paolo.franzoi
    paolo.franzoi
    12/5/2012 | 5:04:29 PM
    re: Comcast Says No to Usage-Based Billing


    I need to download some porn.


    After a peak of 188 Gbytes in March, I am down to 80 Gbytes so far this month.


    What I wonder (and maybe you guys can ask)...would a single violation of a bandwidth cap get you a request to move or does it take multiple violations?


     


    seven


     

    Pete Baldwin
    Pete Baldwin
    12/5/2012 | 5:04:29 PM
    re: Comcast Says No to Usage-Based Billing


    You know, I hadn't thought of it this way either. Good point, Phil.


    Yarn, I think you're right - the main difference is what happens when you've overdone it. With a cap, I guess you get a "GAME OVER" message (and a pitch to spend more $$).  With usage-based, you get a really nasty bill, just like the old days of phones or even cellphones - ah, memories!


    Neither one sounds particularly fun.

    paolo.franzoi
    paolo.franzoi
    12/5/2012 | 5:04:28 PM
    re: Comcast Says No to Usage-Based Billing


     


    Your welcome Jeff.  I was much happier with myself when I realized Dany (yes the girl - you know the one) is 23 in real life.  She is like 15 in the novels.  I know they would not do that, but still....


    seven


     

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 5:04:28 PM
    re: Comcast Says No to Usage-Based Billing


    With respect to violations of the 250GB cap, the Comcast Acceptable Use Policy states:


    In these cases, Comcast may, in its sole discretion, suspend or terminate your Service account or request that you subscribe to a version of the Service (such as a commercial grade Internet service, if appropriate) if you wish to continue to use the Service at higher data consumption levels. Comcast may also provide versions of the Service with different speed and data consumption limitations, among other characteristics, subject to applicable Service plans. Comcast's determination of the data consumption for Service accounts is final.


    So they reserve the right to take any of those actions even on the first violation, is how I read it.


    And, thanks, Seven... you got me hooked on  Game of Thrones... went ahead and streamed next week's episode a week early using HBO GO/Xfinity TV.  And my monthly consumption cap thanks you as well. JB


     

    Jeff Baumgartner
    Jeff Baumgartner
    12/5/2012 | 5:04:25 PM
    re: Comcast Says No to Usage-Based Billing


    Speaking of the novels, I went ahead and got the e-versions... on "location" 2,357 of 75,866 in Kindle parlance... so got a ways to go. But a good way to get my fix between episodes. JB

    paolo.franzoi
    paolo.franzoi
    12/5/2012 | 5:04:24 PM
    re: Comcast Says No to Usage-Based Billing


     


    I don't even own a Kindle, as a Luddite. I am still waiting for this Internet thing to fade.  Soon, I suspect....soon... :)


    I do a lot of audiobooks as I listen to them during cardio (unless I am doing intervals then its music).


    seven


     

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