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ExoticFish

join:2008-08-31
Stuarts Draft, VA

News: Internet Data Caps

Home Internet service providers are introducing "usage-based pricing plans" that would replace all-you-can eat packages and place a limit on monthly data usage.
broadband data caps

(Photo: Karly Domb Sadof, AP)
Story Highlights

Cable companies see data caps as a path to grow revenue
Critics complain that data caps are discriminatory
Cablevision doesn't impose a data cap

7:13PM EST October 1. 2012 - Tawnie Knight's Internet diet began Monday.

With Comcast starting a new trial in her area on Oct. 1, Knight had to choose from a new lineup of its service plans that places a firm limit on the amount of data she consumes each month -- and charges she'll incur if she goes over.

The Tucson-based computer technician, whose daughter loves online video games, estimates her family uses about 350 gigabytes of data a month (a 2-hour high-definition movie can eat up 3 GB to 5 GB). "We stream a lot. I don't want to get into a situation where I have to pay $10 here and there and get nickeled-and-dimed to death," she says.

Knight is one of hundreds of thousands of customers in the Tucson region who are part of Comcast's trial of "usage-based pricing plans" that replace all-you-can-use data plans with ones that cap the amount of data a customer can download.

Wireless carriers' quick adoption of capped Internet plans has generated big headlines recently. But the practice of limiting data -- and charging customers according to use -- is gaining just as much traction on the wired side. Cablevision is one of the few large cable Internet providers in the U.S. that doesn't impose a data cap.

While Knight sees such plans as a financial headache to be endured each month, Internet providers are quietly relying on them as new revenue sources needed at a time when their TV and phone businesses are sagging.

The average household worldwide used 26.2 GB of data per month in 2011, according to a study by Cisco Systems. By 2016, more than 84 GB a month will be consumed by an average family, it predicts.

Several providers, including AT&T and Time Warner Cable, have tried to cap broadband use in the past, only to quickly retreat from their efforts following consumer backlash. But wireless carriers have aggressively introduced capped data plans and cable companies are emboldened by the changes, says Charles Golvin, an analyst at Forrester Research.

"They're looking to increase revenue. They don't face a whole lot of rosy prospects," he says. "The wireless industry is setting the pace on what the model will look like."

The metered plans, cable operators say, are a more fair way to price data services, because heavy users will pay more. Broadband demand is skyrocketing, and additional revenue will help cable companies invest in the future, they say.

"In the wired world, there is a better path to add capacity, but it's not free," says Michael Powell, CEO of the National Cable & Telecommunications Association, a trade group of cable providers. "It's very expensive." The capped plan "ensures the capital that's necessary to make (the networks) better."

But opponents of capped plans contend that they are a product of a price discrimination strategy and charge that they have been rolled out too quickly without clear communication to customers.

Some recent changes include:

-- Data limits in tiers. In May, Comcast, the nation's largest cable company, said it would launch its trial in two markets -- Tucson and Nashville -- that offer six pricing tiers based on download speeds and data limits.

Its cheapest plan, at about $40, will carry a 300 GB limit, while the most expensive plan, about $200, comes with 600 GB. Anyone who exceeds the limit on any plan can pay $10 for each additional data bucket of 50 GB. Those who reach 90% of their limit will get an e-mail alert asking them to pay for additional data allotments or consider upgrading.

In other markets, Comcast currently offers similar pricing tiers that vary by download speeds and have a soft, mostly unenforced, cap of 300 GB.

-- Paying overage in increments. Time Warner Cable launched a trial in Texas in February with a monthly data limit of 5 GB on its three lower-speed tiers that cost $35 to $55.

Customers who choose the option receive a $5 discount. Those who go over the cap pay $1 for each additional gigabyte up to a maximum of $25.

The trial was expanded to North Carolina and South Carolina in August, and the company plans to expand it nationally. "It's targeted to those who don't use the Internet a lot and are looking to save money during these times," says spokesman Justin Venech.

Cable One, which operates in 19 states, charges 50 cents for each additional gigabyte.

-- Simple data caps. Several companies, including Cox Communications, Charter Communications, CenturyLink and Mediacom, have monthly caps that are minimally enforced -- at least for now.

"We don't currently charge overage," says Todd Smith, a spokesman for Cox, which has several price tiers based on download speeds and data limits that were introduced in 2010. Its data limits range from 30 GB to 400 GB per month.

CenturyLink's spokesman Mark Molzen says subscribers who exceed its limit – ranging from 150 GB to 250 GB – are rare, and the company would only cancel the accounts of heavy users if they ignore three requests to curb their use or fail to upgrade to "an unlimited business-class line," says spokesman Mark Molzen.

Partly because data caps are often unenforced and the terms are spelled out in fine-print documents few bother to read, the limits go unnoticed by many customers. Tom An, a restaurant owner in Vienna, Va., says he only recently discovered that his Cox Internet account has a limit of 250 GB. "It came as a big surprise to me," he says. "I don't think they did a good job in letting me know that. I'm not that concerned now. But down the line, with more HD videos coming, it could be a problem."

Seeking clarification

That many consumers aren't aware of their data caps underscores the industry's generosity, industry executives say. Comcast says its median customer use per month is about 8 GB to 10 GB nationwide. "The reality is, a vast majority of consumers don't go anywhere near these (limits)," he says.

While that may be true today, it's inevitable that more customers will reach the limit in coming years, counters Golvin of Forrester Research. "There's nothing unique about bandwidth that says there's a natural limit," he says.

Some critics also are demanding clearer explanation from cable providers on the urgency for new plans. Internet providers have failed to clarify how the caps are set, tiers are created and pricing is determined, says Gigi Sohn, CEO of technology consumer advocacy firm Public Knowledge. "We know nothing about how caps are set or what purpose the cap is supposed to achieve. When they're challenged on it, the cable industry runs away from it," she says.

The new plans are designed mainly to penalize heavy users, since network congestion has not been a pressing issue, she says. "It charges people who value the Internet more," she says. "It's either a price-gouging or price-discrimination strategy."

Not surprisingly, the industry doesn't quite see it that way. While conceding that new pricing plans are "not purely a congestion issue," Powell says that requiring excessive users to pay more will also help modify their data consumption. "If there's a price to your consumption, you'll govern your consumption," he says. "It's a 1% problem."

'Going to be a mess'

After setting up a new account at Comcast, Knight predicts other customers will want clearer, simpler answers as they're herded to new plans.

She says Comcast customer service agents she spoke to were confused or unable to answer detailed questions about the new data caps and prices. "I spent almost a whole day trying to figure this out and order the service. This is confusing. And I know technology fairly well. For the average consumer, this is going be a mess," she says.

Charlie Douglas, a Comcast spokesman, emphasizes that the Tucson trial is new and says its "customer agents are being trained."

In the end, Knight chose a plan that comes with a 450 GB limit, an overwhelming sum for most but not for her bandwidth-loving family. Beyond her daughter's video game habits, Knight also uses TV network apps daily to catch up on shows she misses after work.

Her previous Comcast Internet account, which costs her about $70 a month, came with a soft, unenforced monthly limit without overage charges. The new Internet access is priced at about $115, before cable TV, she says.

"My bill just shot up, and I'm still concerned about going over the limit," she says. "I'm already watching my wireless limits. I don't want to have to watch my cable Internet limit, too."

»www.usatoday.com/story/tech/2012···1595683/
--
»www.VAJeeps.com


JigglyWiggly

join:2009-07-12
Pleasanton, CA
There is no technical reason for caps now, especially with 8 downstream channels.

Just want even more$$$


PeteC2
Got Mouse?
Premium,MVM
join:2002-01-20
Bristol, CT
kudos:6
Reviews:
·Comcast
said by JigglyWiggly:

There is no technical reason for caps now, especially with 8 downstream channels.

Just want even more$$$

Having bonded channels helps however, it is by no means a data panacea...some areas never see enough traffic to get stressed at all, but that is not a universal truth. There are still plenty of areas that suffer from "prime time" connection slow-downs.

Of course they want even more $$$! It is a business, not a charity. The question of course always is what will the market bear cost-wise, and at what point do they lose more money than they bring in based on their price-points.
--
Deeds, not words


telcodad
Premium
join:2011-09-16
Lincroft, NJ
kudos:15
reply to ExoticFish
There was also this pair of articles on the GigaOM site yesterday about data caps:

As broadband caps turn 4, it's time for the FCC to take action
By Stacey Higginbotham, GigaOM - October 1, 2012
»gigaom.com/2012/10/01/data-caps-fcc/

and:

Which ISPs are capping your broadband, and why?
By Stacey Higginbotham, GigaOM - October 1, 2012
»gigaom.com/2012/10/01/data-caps-chart/

Stu Pidaso

join:2006-10-12
Greenwood, IN
kudos:2
reply to JigglyWiggly
said by JigglyWiggly:

There is no technical reason for caps now, especially with 8 downstream channels.

Just want even more$$$

By no means am I defending caps but what does channel bonding have to do with an ISPs connection to a backbone that they have to pay for?


bradyr
Columbia College IT
Premium
join:2008-10-27
Sonora, CA
if comcast was truly worried about bandwidth control or usage, they would implement some sort of throttling or fair access/usage policy.

The bandwidth/data "caps" are purely about profit.

(my opinion)


JigglyWiggly

join:2009-07-12
Pleasanton, CA
reply to Stu Pidaso
You mean the few cents for cost of data transmit?
They'r backbone isn't clogged. Comcast's network is doing fine w/o any caps right now. They don't need to reimplement them.

It's just nice knowing that I can use my Internet as much as I want w/o worrying about going over my limit, especially when I have xtreme105 which should have no caps at all.


tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

1 recommendation

And when you "fill up" those 8 channels, then there is the expense of once again expanding the plant capacity, a step more expensive then all the backbone bandwidth you'll ever use.
The network is fine right now, because they are able to limit growth of demand below that of the ability to upgrade capacity.
If you want truely unlimited capacity, be ready for the truely unlimited bills it brings with it.


bradyr
Columbia College IT
Premium
join:2008-10-27
Sonora, CA
in my opinion, your typical non-throttling data cap does nothing to prevent node/plant congestion or to cure it where it already exists.

I mean, so okay, say i have a 300GB/month data cap. where does it say that I can or cannot burn all 300GB of my data during peak hours?

Lets say, Maybe i'm one of your "typical" households that only uses 50GB a month (for fear of maybe going over my quota).. I'm probably going to be burning through the majority of that 50GB during prime-time hours..

I just think that when the data caps are "just a number" and you can pay more money to increase that number, or get fined. But you're not being punished in other ways (throttled speeds, etc), anyone who thinks that is not strictly about making profit is sadly mistaken.


28619103
Premium
join:2009-03-01
21435
reply to ExoticFish
Click for full size
»www.fcc.gov/measuring-broadband-···#chart19

Description: Cumulative distribution function of usage, by technology.
Shows the percentage of consumers using an indicated amount of data or greater, expressed in gigabytes.

I thought this was an interesting graph from the FCC Measuring Broadband America. It shows the distribution of usage as a % of the user base. If I am reading this correctly it shows that the top end downloaders are around 120G / month range which is well within most ISP caps. (NOTE: People being measured in SamKnows data are probably more expert users vs your grandmother)

Perhaps the extreme heavy users 300G->1T+ are fewer than people think.


tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast
reply to bradyr
said by bradyr:

in my opinion, your typical non-throttling data cap does nothing to prevent node/plant congestion or to cure it where it already exists.

I mean, so okay, say i have a 300GB/month data cap. where does it say that I can or cannot burn all 300GB of my data during peak hours?

Lets say, Maybe i'm one of your "typical" households that only uses 50GB a month (for fear of maybe going over my quota).. I'm probably going to be burning through the majority of that 50GB during prime-time hours..

I just think that when the data caps are "just a number" and you can pay more money to increase that number, or get fined. But you're not being punished in other ways (throttled speeds, etc), anyone who thinks that is not strictly about making profit is sadly mistaken.

You certainly can choose to use it during prime time, in some places that MAY cause congestion...until you use up your quota, HOWEVER ComCast also has a throttling/prioritizing system to handle Continous use during congested times, and is attempting to add extra capacity in those areas to cover those hours of peak useage.
That's is part of the network growth built in to existing rate structures, but there is not funding for continous UNLIMTED growth. What some dis as 'PURE PROFIT/GREED' overage payments will in fact pay for (in aggregate) faster than expected growth due to higher than cap usage.
While some people suggest they should be allowed unlimited off-peak (since there maybe unused capacity idled at some times) the end user can't really tell/does a poor job of controlling total traffic and congestion.
ComCast's proposed cap spreads the extra cost to the heavest users and the usage sensitive priority throttling reduces domination of the shared path by a few users.
A reasonable solution.


EG
The wings of love
Premium
join:2006-11-18
Union, NJ
kudos:10
reply to tshirt
said by tshirt:

And when you "fill up" those 8 channels, then there is the expense of once again expanding the plant capacity, a step more expensive then all the backbone bandwidth you'll ever use.
The network is fine right now, because they are able to limit growth of demand below that of the ability to upgrade capacity.
If you want truely unlimited capacity, be ready for the truely unlimited bills it brings with it.

Yep. Maintaining the capacity capabilities of the "last mile" infrastructure is more costly than is the farther upstream transit capacity.
Expand your moderator at work


espaeth
Digital Plumber
Premium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
reply to JigglyWiggly

Re: News: Internet Data Caps

said by JigglyWiggly:

There is no technical reason for caps now, especially with 8 downstream channels.

It's a business model limitation, not a technical limitation.

said by JigglyWiggly:

Just want even more$$$

Yeah, to fund the next round of upgrades as utilization continues to grow.

Unless you're promising to never use more data in the future than you do right now?

rmdir

join:2003-03-13
Chicago, IL
So they are committing to using all the additional revenue to invest in the network? Or committing to sending damned near all of it to shareholders and not building out the network?


espaeth
Digital Plumber
Premium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
Will the additional revenue be translated with 100% efficiency into network expansion? Probably not.

It does create a situation where if they run out of capacity they can't sell more bandwidth to increase revenue, however, which tends to mean that capacity augmentation projects get funded much more easily.


28619103
Premium
join:2009-03-01
21435
reply to JigglyWiggly
said by JigglyWiggly:

You mean the few cents for cost of data transmit?
They'r backbone isn't clogged. Comcast's network is doing fine w/o any caps right now. They don't need to reimplement them.

It's just nice knowing that I can use my Internet as much as I want w/o worrying about going over my limit, especially when I have xtreme105 which should have no caps at all.

Your comment is a bit of rhetoric or ill-informed. The reality is ISP networks are constantly upgrading ($$$) to prevent being "clogged" and this is not a "put in caps to avoid" future spending. The money IS being spent every day to keep up and allow you to continue to say there is "no problem" without fully understanding (or admitting to why) and at who's cost.

The trajectory of how traffic is growing IS changing and increasing. That said, it is not everyone that is driving this change so not everyone should be accountable for it. If you use more, get a new tier. If you don't (most everyone), stay on your current (yearly speed increasing) tier. It's that simple and VERY low impact to 99% of broadband. People can still surf, download music, watch tons of Netflix, game all day long, etc, etc. The tiers/caps have stayed well ahead of demand keeping this 99% number pretty solid as show from very recent data

Don't you feel that the 99% within the above URLs curve should not be paying for the 1%'s usage? Why is it such a problem for an extreme few to pay a fair share (some % of usage) vs spreading the 1%'s costs across their neighbors?

Imagine if you had a common neighborhood electric or water bill with a flat rate. How happy would you be with the guy that leaves his Christmas lights on all year 7x24? Or the guy that puts faucets out on the curb for people outside the neighborhood to fill their pools.

To become a terabit user is not easy. While there are corner cases, terabit users I expect are usually "That Guy" and neighbors should not be held accountable for his cost.


JigglyWiggly

join:2009-07-12
Pleasanton, CA
yes because using your internet is totally comparable to using 500 watt light bulbs 24/7

please

This is the only site in existence that defends data caps. Probably because you guys work at ISPs and want to protect even more revenue.


28619103
Premium
join:2009-03-01
21435

4 edits
There are no perfect analogies for the Internet. But there are good analogies for inefficiencies, waste and fair allocation of costs

You should really check the facts versus using rhetorical dismissive statements. Again I ask why should the 99% pay relatively FAR more of their contribution to overall capacity growth than the 1%.