[Infowarrior] - Comcast and other providers rush to impose data caps

[Richard Forno]

Jeff Gelles: Comcast and other providers rush to impose data caps

March 01, 2012|By Jeff Gelles, Inquirer Columnist

http://articles.philly.com/2012-03-01/business/31114045_1_data-caps-unlimited-data-data-hogs/2

Netflix's video-streaming service may have lost access Wednesday to its collection of popular Starz movies, but it has been busy reinventing itself as an alternative source of TV shows - a slew of series reruns for now, though with original productions in its pipeline. Who knows? With high-quality shows, it could someday become an Internet version of HBO.

But if you get Internet access from Comcast or one of several other large broadband providers, you might not want to get hooked on Netflix's offerings. If you watch too much via Comcast broadband - or do anything else online that involves moving more than 250 gigabytes of data per month - you're at risk of an ugly surprise. Violate that cap, and Comcast can suspend your broadband service for a year.

In recent weeks, the nation's leading wireless carriers, AT&T and Verizon, have drawn loud hoots for putting digital brakes on high-end customers who make the mistake of believing that an "unlimited data" plan means what it says. Both say they're targeting the top 5 percent of their users to limit network congestion, despite scant evidence that "unlimited data" customers are particular data hogs. AT&T users have reported that data speeds are being throttled by as much as 99 percent - enough to take the smart out of smartphone.

It's clear enough what AT&T and Verizon are doing, even if they don't want to say so: Both have decided to cash in on customers who use the most data and are pushing them to switch to tiered plans.

Something very different is happening in the wired-broadband world, though likely with similar motives. According to Telogical Systems, five of the nation's seven largest broadband providers now impose monthly data caps. Four of them - Comcast, CenturyLink, Charter Communications, and Cox - say they will suspend customers who violate the caps. The fifth, AT&T, charges $10 for each extra 50 gigabytes.

Why does Comcast consider 250 gigabytes per month "excessive use"?

Comcast never really says, according to critics such as Andre Vrignaud, a Seattle gaming consultant who was cut off last year by Comcast and has since become a vocal critic of the caps. Vrignaud says he ran into the cap by accident when he starting moving files to cloud services such as Carbonite for data backup and Amazon for music storage.

"I doubt that most users realize that both uploads and downloads are counted," Vrignaud says.

Comcast's Charlie Douglas says the company has set "a reasonable, transparent, and fair threshold" for a network on which customers share bandwidth. "We feel that that is an extraordinarily large amount of data. That limit is there to make sure we provide a great online experience for every single paying customer."

Douglas says that fewer than 1 percent of Comcast's broadband customers have ever been warned and that the number subsequently cut off is "extraordinarily small."

Vrignaud says broadband providers that impose hard monthly caps have an ulterior motive: They want to steer customers away from services such as Netflix that pose a competitive threat to their core pay-television businesses, and tilt the playing field for future data-heavy services to their own advantage.

"They're trying to put land mines on the train tracks," Vrignaud says.

Netflix has been a sharp critic of hard caps as well as of overage charges - policies that its general counsel, David Hyman, says rely on a false analogy between data and products such as electricity that are costly to produce.

"Adding more capacity is easy," Hyman wrote in a Wall Street Journal op-ed. "The marginal cost of providing an extra gigabyte of data - enough to deliver one episode of 30 Rock from Netflix - is less than one cent, and falling."

Thankfully, there are exceptions in the rush toward data caps, including California's Sonic.net Inc., whose CEO, Dane Jasper, backs Hyman's argument. In a future column, I'll tell you why he thinks the Federal Communications Commission needs to take a more assertive role to protect the promise of the broadband revolution.

Another notable exception is Verizon, for both its DSL and its FiOS fiber-optic service.

John Schommer, director of broadband security and cloud services, calls hard caps such as Comcast's "a little harsh" but says he understands the impulse to use prices or other policies to manage network demand - especially at companies that lack Verizon's state-of-the-art fiber technology.

But he says imposing caps "is not in Verizon's immediate plans."

Contact Jeff Gelles at 215-854-2776 or jgelles at phillynews.com.

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