Why Comcast Intended its Data Caps to Be Annoying
Comcast is one of those companies that just about everyone hates. The cable provider is notorious for its terrible customer service, its fear of competition, its track record of defrauding and stonewalling its customers, and its questionable policies and data caps. Most of the time, Comcast’s most frustrating moves were simply a side effect of the priority the company places on turning a profit, not satisfying customers. But in the case of Comcast’s new data caps, the policies are in place expressly to annoy customers, and to frustrate them into shelling out more money for the same service.
Thomas Gryta and Shalini Ramachandran report for The Wall Street Journal that while data caps once seemed like a problem that would be confined to smartphones, millions of Americans are also facing them in their living rooms, where internet service providers require them to watch their web usage, or else pay extra in overage fees or upgrade charges. Some customers who are worried about going over their data limits have canceled their subscriptions to streaming services like Netflix and Sling TV, for fear of paying not only for the subscription, but for data overages that incur steep charges from ISPs.
The Journal reports that data-cap-related complaints to the Federal Communications Commission totaled 7,904 in these second half of 2015 (as compared to just 863 in the first half of the year), and as of mid-April, this year’s total was 1,463. The providers of top streaming services have complained, too, since aggressive data caps seem like a ploy to keep consumers from dropping their cable packages in favor of online streaming services.
Comcast technically has a 250 gigabyte monthly limit on its 23 million internet customers, but stopped enforcing it in 2012. It recently began a series of trials with a data threshold of 300 gigabytes, and in some areas is testing varying thresholds and an unlimited option for an extra fee. Those trials affect 14% of Comcast’s broadband customers and account for about 2.8 million homes, largely in southern states.
A Comcast executive told the Journal that company is “actively considering substantially increasing” its data usage thresholds, and the publication subsequently reported that Comcast was increasing its monthly limits to 1,000 gigabytes in markets where it had been enforcing a 300-gigabyte monthly cap. That’s a significant change, but the gesture seems considerably less generous when you remember that Comcast created those data caps in the first place.
Nonetheless, increased data usage thresholds should be especially welcome for households with several members. It takes up to three gigabytes to stream an hour of high-definition video, and the Journal notes that a household could stream roughly 50 movies a month before hitting a 300 gigabyte cap. Further, a family with several members could be using many services at once, including video and music streaming on tablets and phones, online gaming, social media browsing, and downloading software updates, which could add up to many gigabytes per hour.
Comcast charges $10 for every 50 gigabytes over the limit, the same fee charged by AT&T. Gryta and Ramachandran note that until recently, all of AT&T’s broadband offerings had limits ranging from 150 gigabytes to 1,000 gigabytes, though after being contacted by the Journal, the company introduced options with unlimited data for U.S. customers. Other providers, including Cablevision, Charter, and even Google Fiber, don’t have data usage limits. And while Time Warner Cable has an option for users to pay less per month to use less data, its standard plans are unlimited.
The demand for bandwidth is increasing as people watch more movies and TV streamed over the internet. University of North Carolina economics professor Jonathan Williams, who has been studying data from hundreds of North American internet users, told the Wall Street Journal, “Literally the week you cut the cord, you increase your usage by more than 30%.” The broadband companies are “all of a sudden bearing all the costs associated with somebody else’s service,” and Comcast says that its data cap trials are meant to demonstrate that “people who are consuming the most should carry more of the bill rather than raise everybody’s bill by the same amount.”
But an increasing number of subscribers are approaching or surpassing internet providers’ data caps, prompting some of them to pay extra for unlimited plans so that they don’t have to worry about exceeding their plans’ limit. While Comcast has said that 10% of its customers use 300 gigabytes or more per month, under the 1,000 gigabyte or 1 terabyte plan, only 1% of customers are expected to go over. But that still means that some customers will be annoyed by the data cap. So why is Comcast testing subscribers’ patience with data caps? T.C. Sottek reports for The Verge that “making customers hurt” is all part of Comcast’s plan.
Thanks to the monopolistic broadband market in the U.S., Comcast can get away with making it more difficult for customers to replace cable TV with services like Netflix, and in the meantime get as much money as possible from customers. Sottek notes that data caps “exist solely to frustrate those customers — which is really an incredible situation in a country that ostensibly cares so much about the virtue of competition.”
While Comcast executives claim that the company has no anticompetitive objectives, Sottek reports that “that’s such an obvious lie it hurts.” Comcast’s own Stream TV internet TV service doesn’t count against the company’s data caps. Which begs the question: if data caps weren’t anticompetitive, then why would the company need to give its own service a privileged position? “The answer is the same as it’s always been: Comcast really hates actually competing with anyone.”
A few giant companies, like Comcast, control the networks that everyone depends on, and these companies want to make as much money as possible while encountering the minimum amount of competition. If you’re one of the millions of customers who approach or surpass your data cap each month, just know that Comcast created its data caps to annoy you into keeping your cable bundle, cutting back on your Netflix use, and — most importantly — paying more for your internet service. You’re not the only one trying to figure out how to stay on top of your usage of data-heavy alternatives to cable, or hoping that something changes with your ISP’s most annoying policy.