Comcast's 1 TB Offering Seen Pointing to Rising Data Caps Trend

The development came shortly after the FCC announced tentative conditions on Charter Communications' buys of Bright House Networks and Time Warner Cable that included a seven-year ban on data caps (see 1604250039) -- timing Morris called "certainly interesting." Between the Charter condition and other companies offering unlimited data, "in some ways, the writing is on the wall" for data caps, said Eli Noam, director of the Columbia University Institute for Tele-Information. USTelecom, NCTA and the American Cable Association didn't comment.

The 1 TB move in part could be about keeping complaints down, said Marvin Sirbu, Carnegie Mellon University professor-engineering and public policy. As Netflix introduces 4K programming that uses more data than HD, the median consumption of data will continue to increase, meaning an increasing number of people would have run up against the 300 GB cap, and with complaints to the FCC about Comcast caps having accelerated in the past year, Comcast may be worrying about its reputation or about arguments it's trying to stifle over-the-top competition, as well as competing with other ISPs' offerings, Sirbu said. The move also could head off potential net neutrality challenges to its own Xfinity on Demand service, usage of which hasn't counted against data caps -- a position that could be harder to defend as Comcast moves its network to be completely IP-based, he said.

Smaller ISPs and cable operators may follow suit with similar large data allowances because they also benefit from increased data capacity due to DOCSIS 3.1 technology, but they could lag behind, Sirbu said. Very small operators, meanwhile, could be at a competitive disadvantage because they don't carry enough traffic to justify, for example, Netflix building content delivery network servers nearby, and will have to haul data traffic longer distances, using backbone providers, at higher cost, he said.

Comcast will introduce the 1 TB plan in about 14 percent of its markets, including in parts of Alabama, Arizona, Arkansas, Florida, Georgia, Louisiana, Maine, Mississippi, Tennessee and South Carolina, it said, saying it's evaluating whether to add other trial markets or to roll out the data allowance plan nationally. In a statement, the company said wireline data plans "are becoming more common" and pointed to offerings by AT&T, Mediacom and Suddenlink, and by Canadian and European ISPs. On why the 1 TB offering, it said: "We want to provide a great online experience and we will continue to evolve our policies as the internet, and our customers’ use of it, continues to evolve."

OTI "remains skeptical about the use of data caps, particularly on fixed networks, and that skepticism is augmented by the fact that Comcast was able to raise their caps so dramatically and suddenly," Morris said. "The capacity was clearly there, which suggests that the caps in this context are not a network management tool, but rather simply a means to continue to experiment with a business model that relies on the imposition of artificial scarcity on the network. Comcast's sudden shift to a larger cap now indicates just how easily it could shift back down in the future, perhaps under a more favorable regulatory environment."

Free Press Policy Director Matt Wood agreed: "It’s been well-known for years that their so-called trials would lead to nationwide imposition of caps. It’s not a back door. It’s a big padlock on the front door."

Comcast's 1 TB cap "may reduce for now the pain that Comcast wants to inflict on people who use too much Internet, whatever too much is supposed to mean ... [but] there's still no justification for a cap besides keeping Internet usage under control and propping up cable's legacy video business," Wood said. He said that as part of its 1 TB announcement, Comcast upped the cost of its unlimited data from $30 per month to $50 per month.