In less than two weeks, Comcast will roll out its home broadband data cap program in eight additional cities, bringing its total up to 27 different markets across the United States. Under the terms of the program, Xfinity broadband subscribers may use up to 300GB of data per billing period. If they use more data for any reason, Comcast will charge an additional $10 for each 50GB used until the next billing cycle begins.
For Comcast customers, this is obviously bad news. People in the U.S. are used to treading lightly with wireless data, aggravating though it may be, but home broadband services have historically offered unlimited data. Now, Comcast subscribers in 27 markets will have the same thoughts creep into the back of their minds each time they sit down to use a service like YouTube or Netflix: How much data does this use, and am I close to my cap?
But Comcast’s data cap program isn’t just bad news for the company’s own subscribers, it’s bad news for all of us.
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First, let’s restate the most important thing to note about Comcast’s data cap program: it’s all about money. Whereas wireless carriers claim to have implemented data caps in order to prevent congestion and maintain high service quality for all customers, Comcast makes no such claims. In fact, a leaked support document recently showed that Comcast has instructed its staff to openly admit that the company’s 300GB cap has nothing to do with network congestion.
Here’s a screenshot of that document (note the last three lines):
Instead, Comcast’s data cap program — which it ridiculously calls a “Data Usage Plan” — is purely a money grab. In fact, Comcast is perfectly happy to remove data caps from customers’ accounts if they’re willing to cough up an extra $35 per month on top of their already-pricey Internet subscriptions.
This could be the most brazen thing Comcast has ever done, and that’s really saying something.
Here’s the thing: as someone who isn’t a Comcast subscriber, it’s easy to furl your lip each time you read about Comcast caps and then go on about your business. After all, you’re not impacted by this move because you have some other ISP that offers unlimited home broadband data, right?
Wrong.
Comcast is a business, first and foremost. It has been making that abundantly clear for years. Well guess what: every other ISP in the country is a business first and foremost as well. Home broadband penetration is very high right now; over 80% of U.S. households have home broadband subscriptions. If ISPs hope to continue growing their sales and profits moving forward — and as public companies, that is obviously their hope — they need to find new ways to boost revenue.
Compounding matters is the fact that cord cutting is becoming an increasingly popular trend, so companies like Comcast are losing revenue they had previously enjoyed from television subscriptions. And what inevitably happens when a customer cuts his or her cable TV service? Data usage goes up because streaming video increases from services like Netflix, Amazon, Hulu and YouTube.
It’s a difficult problem indeed, but data caps are a very troubling solution for consumers. If Comcast is permitted to cap subscribers’ data, its ilk will follow suit. It’s not a question of if, but rather when. Just as we’ve seen in the wireless market where unlimited data is now ostensibly a relic of the past, unlimited home broadband data will effectively disappear. Sure, you’ll be able to keep unlimited data if you’re willing to pay, but you can expect the cost of your unlimited data plan to increase regularly every few years.
Also of note, there are negative implications that extend beyond the increased expense for American households. Usage caps on home internet service will also inevitably stifle progress and innovation. It’s impossible to avoid. If home broadband data becomes something consumers must constantly monitor and use sparingly lest they pay penalties, new and exciting products that use large amounts of data might never come to be. Can you imagine how difficult it would have been for companies like Netflix and YouTube to raise capital if capped broadband data plans had existed when they were founded?
This problem is real and it’s quite serious. It affects us all, not just Comcast subscribers. The Federal Communications Commission surprised the American public when it put consumer-friendly net neutrality rules in place, but that doesn’t mean its work is done and lawmakers get a free pass now.
The FCC has an Internet complaint page — I suggest we all start to use it more actively.
