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The Expansion of Data Caps

Comcast is going to introduce data caps in the Northeast in January. This will impact customers in Connecticut, Delaware, Massachusetts, Maryland, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Virginia, Vermont, West Virginia, and the District of Columbia, as well as parts of North Carolina and Ohio.

The Comcast data caps place a cap on total usage, which is upload and download combined, at 1.2 terabytes in a month. Customers that exceed that cap are charged $10 for every 50 gigabytes over the cap, with a maximum charge of $100. Customers that expect to routinely exceed the data caps can buy unlimited data for an extra $25 per month.

While the measurement of usage will start on January 1, Comcast is giving customers a ‘credit’ for the month of January and February. Comcast will report usage to customers and will be giving customers two months to get used to the idea of data caps. The Comcast data plan normally gives customers one such credit per year and doesn’t bill customers who accidentally go over the data cap.

Comcast has not implemented data caps in the Northeast before but has enforced them in other parts of the country. One of the most interesting things about this decision is that Comcast will be billing data caps in many cases where customers have the option to change to fiber on Verizon FiOS. Verizon not only doesn’t bill data caps, but the company offers symmetrical data speeds which mean households don’t have bandwidth constraints for working from home or attending school from home.

The timing is also odd since it’s clear that the pandemic is far from over. There are still a lot of households facing the unemployment of a family member due to the pandemic. The pandemic is also still forcing a lot of adults and students to work from home, which eats up a lot of data. Perhaps the oddest part of this timing is that Comcast is also raising prices on basic broadband by $3 per month on January 1 – something that it doesn’t look like Verizon will be doing.

It’s obvious why Comcast is making this change. At the end of the third quarter of 2019, a little more than 4% of homes used more than a terabyte of data per month. In the recently ended third quarter of this year that had jumped to 8.8% of all homes in the country. Even more astonishing, 1% of homes now use more than 2 terabytes of data per month. There is suddenly is a lot of money to be made from data caps. Implementing data caps in the Northeast probably equates to the same amount of new revenue as a systemwide rate increase.

Comcast says it will notify customers as they approach the data cap limit. But in states where Comcast bills data caps there are a lot of customers who have independently measured data usage and who claim that Comcast routinely overstates home broadband usage. It’s too bad that we don’t have a regulatory agency that could develop some rules concerning data caps – but the FCC has given away its authority on this kind of issue.

Not to be outdone, Charter has asked the FCC to allow it to start billing data caps in May 2021. The company agreed to not bill data caps as part of the agreement to purchase Time Warner Cable. That agreement lasts until 2024, but Charter is asking to implement data caps two years earlier than that agreement.

ISPs always argue that data caps are needed to protect the network. But we know that the extra network usage during the pandemic has happened during the daytime – when networks have historically not been overly busy. The evening periods when usage is the heaviest have barely changed during the pandemic. The data caps are clearly for one reason – to make more money. Unless the FCC reasserts broadband authority and tackles the issue, we’re going to see the big ISPs extract as much revenue as possible out of the public.

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