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Home » Budgeting, Technology, Wall Street News

Broadband Bandwidth Usage Caps: It’s Time for Consumers to Band Together

Last updated by on 7 Comments

Comcast and AT&T, you never cease to amaze me.

Having closely watched net neutrality issues and recently, the Canada broadband usage based billing debate, I thought that you and others of your ilk would have learned a lesson about how NOT to do business in the United States. Oh, how wrong I was.

If you hadn’t been paying attention, here’s what you’ve missed.

The Canada Bandwidth Usage Caps Story

bandwidth capThe whole Canada usage based billing debate started in May of last year when the Canadian Radio-television and Telecommunications Commission (CRTC), an agency that regulates telecommunication carriers in Canada, issued a decision that allowed Bell Canada to implement bandwidth usage based billing.

Internet use in Canada is through the roof. According to Comscore, the average Canadian spends 43.5 hours a month on the Web, almost twice the worldwide average of 23.1 hours.

So how did Canadians react to usage based billing? Over half a million people signed an online petition demanding that the CRTC overturn their decision.

As a result, the Canadian Government is now asking the CRTC to reconsider their decision and prominent politicians are demanding it.

Comcast and AT&T, the two largest ISP’s in the U.S., should have taken notice. Did they?…

AT&T Usage Caps

…Not in the way you were hoping. Fresh off the heels of the Canada fiasco, AT&T usage caps were announced.

AT&T DSL subscribers will be limited to 150 gigabytes of uploads and downloads per month for regular DSL customers and 250GB of broadband usage per month for U-Verse subscribers.

They claim that this will only impact 2% of users. In reality, it will put the fear in 100% of them.

Both DSL and U-Verse users must pay $10 per every 50GB above the cap they travel. Only users who exceed the new usage cap three times across the life of their account, will be forced to pay these new per byte overages.

Comcast Usage Caps

What I didn’t realize until recently, is that Comcast usage caps have been around since 2009 (I should have known they’d be a frontrunner in this). 250 GB per month, to be precise. Unlike AT&T, who simply charges more if you exceed the cap, they take a more hard line approach. Comcast states,

If you exceed more than 250 GB, you may receive a call from the Customer Security Assurance (“CSA”) team to notify you of excessive use.  At that time, we will tell you exactly how much data you used.  When we call you, we try to help you identify the source of excessive use and ask you to moderate your usage, which the vast majority of our customers do voluntarily.  If you exceed 250 GB again within six months of the first contact, your service will be subject to termination and you will not be eligible for either residential or commercial internet service for twelve (12) months.  We know from experience that most customers curb their usage after our first call.

“We know from experience that most customers curb their usage after our first call.”? Shouldn’t that type of language on an internal confidential memo only? Good one, Comcast.

Don’t Buy the Usage Cap Rhetoric

Both Comcast and AT&T state that these policies benefit consumers by freeing up the network from bandwidth hogs. There may be some truth to that, but if they want to get rid of the true hogs only, then why put their caps at a level that common users can realistically reach if they embrace new streaming audio, gaming, and video technology?

Doesn’t it strike anyone as odd that in a time when bandwidth infrastructure and capabilities should be exploding we are going backwards in time to the early AOL and Compuserve dial-up restrictions? We should be continuing the trend towards more open, not less open.

I think what this is really about is two things:

  1. Permitting further delays in upgrades to their networks, further boosting their profits. I don’t know about you, but I’ve been stuck at 6-8 Mbps since the advent of broadband. Meanwhile, 40 cities in Mexico are getting 100 Mbps upgrades from Telmex (from the current 5 Mbps). Mexico will have 20 times faster broadband than most of the U.S.? You see, when there’s no competition, it’s good for your bank account to not do the right thing for your customers. Why not sit and rest on your laurels and hope that you can curb usage habits and get government handouts instead?
  2. Halting a drop in cable TV subscribers. More and more users have seen broadband as an opportunity to lower their overall monthly utility costs by getting rid of cable and using online more. Implementing usage caps puts the fear in users, even if most will never reach the cap, to not look at broadband as a viable substitute. Netflix Canada has cited usage caps as the reason behind lower than expected growth.

We’ve seen this story before. The largest mobile carriers have installed very limiting and pricey usage caps and even gone so far as to outlaw mobile VOIP on their networks.

The thing that should concern you is that AT&T and Comcast are, in many parts of the country, broadband internet monopolies. It isn’t as if you, the consumer, have the choice to go elsewhere for serviceable internet speeds when usage caps are forced on you. We have to grin and bare it. We have no choice. Even the biggest proponents of free market capitalism have to turn their heads in shame.

At least there is a little more competition in the mobile space that allows us to look elsewhere…. well, at least until the AT&T and T-Mobile merger is approved.

The bottom line: Internet growth and consumer choice should not be stifled in the name of monopolistic corporate profits. It’s not in your best interest and it’s not in our country’s best interest. It could even be argued it’s not in the company’s best interest.

Don’t be surprised if this is the start of even stricter broadband usage regulations.

Comcast’s hiring of Federal Communications Commission member, Meredith Atwell Baker (who recently approved the Comcast/NBC merger), as a top lobbyist should be evidence that Comcast is mobilizing for more battles. No conflict of interest, I’m sure.

Maybe we should too.

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I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


7 Comments »
  • Ross @ Go Be Rich says:

    All consumers are going to understand is that either their prices will go up, or their level of service and what they get will go down. The majority will not look into the issue, try to understand the reasons behind what’s going on, and then attack the actual issue. Of course, in a unregulated market, those consumers would simply flock to the competitor, but that may be hard to do in a situation such as this…

  • Natalie says:

    Cox has not instituted bandwidth caps for most customers, however they have increased the cost of service by 50% last month. I think we are going to have to pay for the extra bandwidth usage one way or another, but it’s tough to regulate when most service providers are monopolies.

  • Aaron says:

    I’m a network engineer. I download software from Microsoft for testing routinely, both my wife and I stream like mad from Netflix, Amazon, YouTube, and other video related sites, use Skype, do online backups to cloud services, remote into the house, retrieve data remotely, buy music online, stream Pandora, host online game servers for a few friends, play online games, etc. etc. etc. I have never once gotten a call from Comcast. Haven’t come close to it.

    I do side work fixing, troubleshooting, etc. several customers’ home PCs. I have several clients who have gotten called by their ISP for excessive bandwidth usage. Every single time it was because a teenager was downloading and sharing movies and music illegally.

    It is very very difficult to use that kind of bandwidth unless you’re doing something illegal, or you’re doing something you rightfully should have a business class ISP connection.

    Comcast ticks me off all the time about a variety of things, but this ain’t one of them.

    • G.E. Miller says:

      Yes, but streaming movies and TV shows is really now becoming mainstream and more and more people are looking at broadband as a complete substitute for cable…. that did not use to be the case even though you could stream before. Trends are changing, and they are making this move before it’s too late to go back.

      • Aaron says:

        That’s actually what we’re doing. I hate Comcast cable boxes, so we used Windows Media Center instead. A few months ago, Comcast moved most channels from unencrypted analog to encrypted HD channels (thanks Comcast!), so without a CableCard tuner, we can’t watch the vast majority of channels anymore, so we pretty much abandoned conventional TV and stream everything. Still, not getting calls on bandwidth usage.

        I am really peeved they didn’t move unencrypted analog channels to unencrypted QAM digital channels, though.

  • Ron Ablang says:

    If anyone can find a similar online petition for this country, please post it here. I’ll sign it. I do live in one of those quasi-monopoly areas. I have Comcast & Frontier in my area. It’s not even a competition. I wish I could get AT&T. I dislike Comcast how their promo rate goes up at the end of the promo period.

  • Justin @ MoneyIsTheRoot says:

    I just read an article today that the amount of bandwidth the average home utilizes for Netflix has increased over the amount used for web surfing, which I find to be amazing. These cable companies see this trend, and basically are adjusting the revenue model in case basic cable service becomes extinct…which I think will happen.

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