As Comcast Broadband Usage Caps Expand, Company Still Refuses To Admit They Even Have Caps

from the Tomato,-tomahto dept

Like the boiling frog metaphor, Comcast continues to slowly deploy usage caps in a growing number of uncompetitive markets in the hopes that nobody will notice until it's too late. As noted previously, Comcast has started imposing a 300 GB monthly cap in more than seventeen "trial" markets, after which users have to pay $10 for each additional 50 GB of usage. In a most recent wrinkle, the cable operator has also started offering users the honor of paying $30 if they want to avoid these usage caps entirely. It's a glorified rate hike on what's already some of the most expensive broadband in the world.

Amusingly, for some time now Comcast spokespeople have been scolding any reporters that call these restrictions a "usage cap," in the belief that changing the terminology will somehow fool the public into thinking paying more for the same service is somehow reasonable. No, states Comcast, it doesn't impose usage caps -- it delivers friendly neighborhood "data thresholds" that provide greater "choice and flexibility."

This week the company's usage caps went live in Fort Lauderdale, Miami and the Keys, and once again Comcast spokesfolk are making the rounds trying to force journalists to adhere to specific lingo when discussing the plan:

"Charlie Douglas, a Comcast spokesman, argues that its wireless-style plans aren’t a cap. A true cap, he argues, was what Comcast implemented in 2008 when it told users that if they used more than 250 gigabytes per month they would be first warned and then cut off from service. That plan ceased in May 2012. Comcast insists that its offering since then is better described as a “data usage plan.” “We don’t call it a cap,” Douglas says. “We call it a data plan just like wireless companies have data plans."

Apparently, Comcast believes it gets to unilaterally redefine what a broadband usage cap is, and that the public is too stupid to realize when they're looking at a rate hike if you just call it something else. Contrary to common wisdom, usage caps don't really help network congestion, and even the cable industry has admitted caps aren't about congestion anyway. What are they about? Comcast's deep-rooted love of fairness, apparently:

"Why would a company that has plenty of capacity on its network need a data plan? It’s not a matter of capacity, Douglas argues, but fairness. “Ten percent of our customers are consuming half of all of the data that runs on our network each month,” Douglas says. “So part of the rationale for all of these trials is this principle of fairness. Those who want to use more pay more, and those who want to use less pay less."

Right. Except fairness would be simply moving those 10% of users on to business plans if they're such heavy users, and leaving the rest of the user base alone. Fairness would be truly usage-based plans that let your grandmother pay $5 a month for her thrice-weekly viewing of the Weather Channel website and e-mail use. Instead, Comcast is imposing caps and overages (a rate hike) on all users right on the eve of the 4K and Internet video revolutions, knowing full well most user households will run face-first into the caps over the next few years.

That's of course because caps aren't about "fairness" either, they're about ensuring that Comcast gets to keep revenues fat and bloated as more cable TV customers cut the cord and shift to Internet video. Apparently Comcast believes its users are collectively too stupid to realize this, and that by simply fiddling with basic definitions (it's not a usage cap, it's a wholesome family consumption calculator!) the public will nod dumbly and graciously accept one of the biggest rate hikes in Comcast history.

Filed Under: broadband, broadband caps, data caps
Companies: comcast

Comcast Says It's Going To Slap All Of Its Customers With Data Caps, Makes Half-Hearted Attempt To Walk Back Earlier Statements When Backlash Kicks In

from the what-are-you-going-to-do?-go-without?-HAHAHAHAHA dept

Comcast, perhaps feeling a bit too confident about its chances to swallow up Time Warner Cable, is talking about rolling out data caps to all of its subscribers. It had, up to this point, only "offered" it in certain areas on a "trial basis." Customers hated it, of course, but that's not really what Comcast was gauging with its trials. It was only interested in seeing a) how profitable it was and b) whether that profit would offset losses caused by the few customers lucky enough to have options.

With a merger on the line, Cohen chose his words very carefully, responding to a rather dancing, ambiguous question by industry analyst Craig Moffett (long an avid supporter of usage caps, and, apparently, "variabilization") with some dancing ambiguity of his own:

Moffett: Bottom line is, 5 years, 10 years from now, do you think that we will be in a model where the Internet is fully variablized, or usage is fully variablized, or at least variablized to the extent that most people are selecting from a reasonably large number of usage plans that match their usage to their price?

Cohen: I actually think the answer to that is, no. I would say, if you made me predict today, and I don't want to get myself in any trouble, if you made me predict today, I would predict that in 5 years Comcast at least would have a usage-based billing model rolled out across its footprint.

But I would also predict that the vast majority of our customers would never be caught in the buying the additional buckets of usage, that we will always want to set the basic level of usage at a sufficiently high level that the vast majority of our customers are not implicated by the usage-based billing plan. And that number may be 350 -- that may be 350 gig a month today, it might be 500 gig a month in five years, but it will never -- I don't think we will want to be in a model where it is fully variablized and 80% of our customers are implicated by usage-based billing and are all buying different packets of usage.

As Karl Bode points out, it's fun to watch Cohen pretend that Comcast isn't eventually going to cap everyone. If the merger goes through, you can be sure former Time Warner customers will be experimented on and eventually capped as well. But, hey, it's not really a monopoly because the two companies don't compete head-to-head, as someone at the Washington Post claimed in defense of the merger. Instead, it's more customers being screwed by the same company's lousy idea.

Surely the contingent that declares "vote with your wallet" during these sorts of announcements has dwindled to near zero at this point. For most of the country's population, the choice is that or DSL, the offering AT&T and others can't wait to rid themselves of. And it's not like other companies won't initiate their own caps once Comcast puts its limits in place. If one big player is doing it, then everyone can hop on the money train without shedding a ton of customers. In an inversion of the "if everyone's special..." argument, the cable companies will operate under the "if everyone's a crappy service provider, then no one's a crappy service provider" motto.

With this in place -- along with the pay-for-play internet -- Comcast can collect on its customers' Netflix addiction on both ends. The easy money will now be even easier, and no expense will be spared to ensure infrastructure upgrades and better customer service the lousy, pricy caps are advertised using only the shiniest junk mail and the cheeriest TV spots. Or, in fact, why even bother advertising? Incestuous duopolies and straight-up "only game in town" structuring means never having to talk someone into a shitty plan.

Even if Comcast isn't granted its monopoly, its willingness to deploy unpopular usage caps will only encourage Time Warner to speed up its roll-out of the same terrible plans. At this point, the biggest players are hardly putting any energy into maintaining the farcical facade of "network congestion." After all, Netflix chews up a ton of bandwidth, and Comcast has just bumped the speed at which this gets "used up" in exchange for an untold amount of money. If congestion was actually a problem, data hogs like streaming services would either be priced out of the market or more of the market would already be laboring under restrictive caps. But Comcast says "Use more internet!" -- just as long as it gets a larger cut of the action.

There's zero benefit for the consumer.

What companies like Comcast are doing is simply taking current, already-expensive flat-rate plans and pricing -- and affixing usage caps and overage fees on them, making existing product immeasurably more expensive. Under that model, everybody pays more -- no matter what. The industry claims they're just "experimenting" with "creative pricing," but the end result is usually just a rate hike wearing lipstick and a dress.

To extend the metaphor, Comcast's cap plan is like a hooker putting an egg timer on the nightstand and charging you every time she flips it over -- all the while telling you she's just "variabilizing" your sexual experience. And as she walks out the door with a handful of "overage fees," she points out that her service isn't really that restrictive because most of her customers "never achieve orgasm."

Now, Comcast has since made a half-assed retraction of these statements, which doesn't change anything for the thousands of users in uncompetitive Southern markets that are still dealing with data caps. Karl Bode does a great job taking apart the PR speak hastily assembled in the wake of its earlier remarks. Here's Comcast:

We have been trialing a few flexible data consumption plans, including a plan that enables customers who wanted to use more data be given the option to pay more to do so, and a plan for those who use less data the option to save some money. We decided to implement these trials to learn what our customers’ reaction is to what we think are reasonable data consumption plans.

And here's Bode:

Except as we noted the other day, Comcast knows full well what the consumer reaction to these plans is: they hate them. The company's 300 GB offer simply puts pricey overage fees on top of already-steep flat-rate pricing, and their other plan offers users a small $5 discount off flat-rate pricing if they agree to a 5 GB usage cap. Comcast isn't testing whether consumers like caps, they're testing how they can market usage caps in such a way that sees the minimal amount of user revolt.

While it's truly wonderful that Comcast will give customers the "option" to pay more for using more data, most customers would just rather have uncapped connections or data caps high enough that they don't need to cut the kids off Netflix mid-month. Add to that the fact that these caps are wholly reliant on Comcast's unverified measurement of data usage -- along with the fact that Comcast is openly pursuing paychecks from data-heavy services -- and you have the makings of a very profitable "offering." And Comcast has never been coy about preferring larger margins to satisfied customers.

Filed Under: broadband, broadband caps, data caps, david cohen
Companies: comcast, time warner cable

FCC Boss: Broadband Caps Are Good... No, Bad... No, Good... Wait, Who Am I Talking To Again?

from the politics dept

For many years, we've talked about why metered and capped broadband is bad for innovation. Beyond the fact that it introduces serious mental transaction costs ("do I really want to watch that video, or will I hit my broadband cap?"), it creates the exact wrong incentives for broadband companies. They have incentives to keep the caps low and to not invest in infrastructure improvements. Of course, as with the net neutrality fight, the appearance of meters and caps are really a symptom of a larger problem, not the problem itself. The real problem: a serious lack of competition. Meters and caps don't do anything that a user wants. Quite the opposite. They only serve the needs of the broadband provider. If there were real competition, then broadband providers wouldn't be able to get away with caps and meters, because customers would quickly move elsewhere, and companies that focused on not limiting users would be winners in the marketplace.

Over at Broadband Reports, they've been chronicling FCC boss Julius Genachowski's constant flip-flopping on whether or not broadband caps are good or bad. Tellingly, it seems to depend, in part, on what audience he's speaking to.

FCC boss Julius Genachowski has been busy lately paying lip service to Silicon Valley, most recently telling a bunch of Silicon Valley conference attendees that caps were something we should be "concerned" about, after telling cable companies just a few months earlier he thought caps and overages are nifty and innovative. Speaking again to Silicon Valley folks yesterday at a speech at Vox Media headquarters, Genachowski hashed out his muddy position a little further, again insisting he was "concerned" about caps -- sort of -- maybe

As the article makes clear, beyond tailoring his remarks to his audience, Genachowski seems to be discussing things as if we were in a world where there was real competition, where meters and caps were used to offer lower prices, where the meters actually worked, where money from these activities goes into greater broadband investment and where such things were needed to make broadband profitable. The problem: exactly none of those things appear to be true. It's kind of tough to make competent policy when all of your assumptions are basically wrong. More from Broadband Reports:

One, caps (and especially usage fees) are not technically or economically necessary whatsoever. Flat-rate broadband is perfectly profitable and despite doomsday prognostications designed to scare regulators (it apparently worked), most networks consistently keep pace with demand thanks to dropping bandwidth and hardware prices and improved engineering. Ten years of ISP earnings reports are proof the flat-rate pricing model is sustainable.

Two, they're not being imposed in a "competitive market"; they're just price hikes on already-expensive service, designed to protect TV revenues from Internet video -- and they're made possible specifically because of limited wireline competition, a problem the FCC refuses to seriously tackle. Most modern, well-managed wired broadband networks don't see much congestion. Caps and overages are an executive and investor pipe dream; an entirely new unnecessary fee system layered on top of what is already some of the most expensive broadband service in the developed world (OECD data).

Genachowski appears to have swallowed the lie that money gleaned from overages goes back into the network; yet CAPEX and wired network investment is dropping like a stone for most incumbents, and most of the cash gleaned goes into the pockets of CEOs and investors. While that's the public corporation's primary objective, pretending that caps are helping to create the networks of tomorrow is not supported by the facts. If the money from overage fees actually went back into the network, Canada would have some of the most advanced residential broadband networks in the world. Go ask our Canadian forum users exactly what caps have done to improve the quality of their services.

These things are important if we're going to actually get broadband policy right. The FCC has often seemed way too timid in recognizing that what the telcos tell them is often a complete fabrication. Given how that's been the case for decades, you'd think sooner or later someone would pick up on it and use it to try to fix things, rather than kowtowing to their latest talking points.

Filed Under: broadband, broadband caps, fcc, julius genachowski, metered broadband

Bandwidth Caps Forcing Users To Police Their Own Household Internet Usage

from the just-what-the-entertainment-industry-wants dept

We've discussed in the past how broadband bandwidth caps can slow innovation by adding mental transaction costs to basic internet usage. People don't want to have to think about how much bandwidth any particular usage might take. They don't want to have to consider that if they click a particular link it might eat up a significant portion of their monthly allocation. There are some other issues as well. Mathew Ingram tells of his experience bumping up against bandwidth caps in Canada, in which he couldn't figure out what had happened:

I have three teenage daughters who also download music, TV shows and so on. I figured someone had just gone a little overboard, and since it was close to the end of the month, I thought it wasn�t anything to be worried about. The next day, however, I went online and checked my usage (Rogers has an online tool that shows daily usage), and it said that I had used 121 GB more than my allotted amount for the month. In other words, I had used more than 100 GB in less than two days.

I just about spit my coffee all over the computer screen. How could I possibly have used that much? According to Rogers, I owed $181 in overage charges. Luckily there is a maximum extra levy of $50 a month (just think what it would cost if I was subject to usage-based billing).

So he felt forced to go track down what the issue was. At first (with prompting from Rogers tech support), he thought the issue might be his open WiFi, so he closed that down. He asked family members about their usage, and they all insisted they weren't doing much. However, just a few days into April, he was told that his connection had already used up the monthly allocation, leading to a second search, and the eventual discovery that one of his daughters had downloaded some TV shows, but left a file sharing program running in the background, which probably accounted for the extra bandwidth usage.

In other words, he had to become his own local area network cop, to figure out how his own network was being used and for what. Now, I'm sure some will argue this is a good thing. They'll say that you should be responsible for understanding everything that goes through your router. And, of course, those who dislike file sharing will argue that this is a wonderful side benefit to these bandwidth caps. But, it really shows yet another pain in having bandwidth caps. It adds a lot more work to having an internet connection at home -- work that really shouldn't have to be done by someone who just wants to access the internet. Perhaps we'll end up with more sophisticated tools for people to track their home internet usage, but in the meantime, it seems a bit crazy to force everyone to be their own local area network traffic cops.

Filed Under: bandwidth, broadband caps, policing

As AT&T Introduces Caps, BT Removes Them; Says Investing In Network Is Smarter

from the but-of-course dept

A few years ago, we noted that BT's CTO had admitted that there weren't any congestion issues that required traffic shaping or other limitations on the network, just so long as they continued to do basic investments in network infrastructure. And, indeed, just as AT&T is introducing broadband caps, BT has announced that it's removing them, because there's no need thanks to infrastructure investments.

BT will remove the FUP controls currently applied to customers with �atypical� usage. Today atypical users are restricted at 300GB usage and account for less than 0.5% of the BT customer base. BT will not target any individuals with restrictions based on usage levels. However, we still have traffic management policies that will restrict certain applications / protocols, such as P2P, when the network is busy. As BT continues to invest in the network and network bandwidth we can now remove these restrictions and ensure the experience of the wider customer base.

Of course, it's worth noting that following our original post, a commenter pointed out that there was plenty of competition in the UK market, but there still were caps. Perhaps that's going away. Competition drives investment and innovation... and that gets you away from unnecessary limits.

Filed Under: broadband caps, uk
Companies: at&t, bt

Time To Face Facts: Broadband Caps Are Really About Protecting Video Revenue

from the not-about-bandwidth-hogs dept

As various broadband providers drool over the idea of implementing broadband caps, they've mainly focused on the claim that they're doing so to make "bandwidth hogs" pay "their fair share." Sometimes they sprinkle this with claims of poverty over having to provide unlimited access to people who actually use it a lot. Of course, none of this is true. The various metered broadband plans almost always end up increasing everyone's bills, and there's little to no evidence that bandwidth hogs are a problem, either technologically or economically speaking.

For the most part, broadband caps are really about protecting video revenue. Many broadband providers these days also provide television, and that business is a total racket these days, with TV companies rolling in cash. Internet TV breaks up the artificial monopolies and the monopoly rents they can extract, so the last thing the broadband (and TV) providers want to do is make it easier for consumers to route around their television programming and access it directly on the internet.

As if to highlight that very point, Canadian telco giant Rogers decreased its already very, very low broadband caps just as Netflix announced that its streaming service was coming to Canada. The timing may be slightly coincidental, but it certainly highlights the point. Rogers doesn't want you streaming videos on Netflix if it means you might not watch Rogers' own TV programming.

Filed Under: broadband caps, video
Companies: netflix, rogers