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Comcast may impose data caps on all customers within 5 years

Executive VP for the cable giant predicts move to a usage-based billing model, with a data cap of maybe 500GB.


Cable giant Comcast could institute data usage caps on all customers in the next five years, if one executive's prediction proves accurate.

Speaking with investors at the MoffettNathanson Media and Communications Summit, Comcast Executive VP David Cohen said he expects the cable giant would have in place a "usage-based billing model," with a data cap of maybe 500GB.

"If you made me predict today, I would predict that in five years Comcast at least would have a usage-based billing model rolled out across its footprint," he said in response to a moderator's question about whether there would be a large number of broadband plans tailored to meet the usage and pricing needs of customers, according to a transcript (PDF).

When Comcast, which has about 20 million customers, increased its existing cap from 250GB to 300GB in 2012, it began testing a new policy in which it would impose an overage fee for those who exceed the cap. For those who went over the cap, the company began charging an additional $10 per 50GB of usage.

"I would also predict that the vast majority of our customers would never be caught in the buying [of] the additional buckets of usage, that we will always want to say 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," Cohen explained. "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 percent of our customers are implicated by usage-based billing and are all buying different packets of usage."

Comcast instituted the cap in 2008. Then the company said that the median usage for most residential customers was somewhere between 2GB and 3GB. While usage has increased dramatically since then thanks to streaming content, Comcast has long maintained that 98 percent of its customers never come close to exceeding the caps it imposes.

A study conducted in 2012 by Sandvine, a company that makes network management tools used by cable operators, found that only about 1.5 percent of US broadband households used more than 250GB of data per month. And only about 1 percent exceeded 300GB.

Time Warner Cable, which Comcast is attempting to acquire, last year began testing a new 30GB usage-capped billing option to its broadband customers, offering discounts to those who agree to limit their usage. While controversial, usage-based billing was unlikely to be an issue during the regulatory review of the proposed merger, Cohen said.

"It really has nothing to do with our transaction," he said. "It's a generic industry-related issue."

However, Cohen said he "wouldn't be stunned to see usage-based billing questions in the NPRM [the Federal Communications Commission's Open Internet Notice of Proposed Rulemaking] around the open Internet because people have tried to make this an open Internet issue."

( Via Ars Technica)