dslreports logo
 story category
Cox Communications Eyes Usage Caps, Overage Fees

Cox customers are worried that the company intends to dramatically expand enforcement of the company's usage caps. Over the years Cox has employed what's commonly known as "soft" caps, or caps that are only enforced in some locations on select customer accounts known for extremely heavy consumption. But about a year ago we exclusively reported that Cox was ramping up tests that would both impose hard caps, but charge users the increasingly-standard $10 per each additional 50 gigabytes consumed.

Click for full size
Users in our Cox forum seem to believe those tests may be wrapping up and a more serious enforcement could arrive any day now.

Cox's Data plans and usage website appears to have been recently updated and fleshed out. As it stands, caps range from 200 GB (for the company's 5 Mbps service offering) to two terabytes for Cox's slowly expanding "Gigablast" gigabit broadband service. Users note that the usage cap assigned to its top-shelf "Ultimate" 200 Mbps broadband tier was recently dropped from 2 terabytes to 1 terabyte to help push these users to gigabit speeds.

Customers complain they were given no warning of the changes by Cox.

"The change was made this week to more consistently reflect the increased speed and usage allowances included with each Cox Internet package," Cox confirmed to DSLReports.com. "Ultimate now includes 1 TB of data usage and our Gigablast package includes 2 TB. These changes are effective in all markets where these speeds are available. It is important to note that current Cleveland customers are grandfathered with the 2 TB data usage allowances on the Ultimate tier."

The company previously stated it was only enforcing overage fees in the company's Cleveland, Ohio market, but it seems likely that the restrictions will expand to all Cox markets before long. A customer support script obtained exclusively by DSLReports urges customer support employees to tell annoyed customers in the Cleveland trial market that the company's pursuit of higher rates is about "fairness":

quote:
"Data usage plans promote fairness by asking the high capacity Internet users to pay a greater share of network costs. Some critics of data usage plans push a flat fee pricing model, meaning that users would pay a flat fee whether they simply use the Internet to surf the web and check email or if they are a “super user” and consume copious amounts of bandwidth.

Data usage plans are a far more fair approach, giving consumers a choice based on their personal needs rather than forcing all customers to absorb the network costs incurred by the 5% of customers who exceed their allowance."


In reality, American consumers already pay some of the highest prices for broadband services in the developed world (OECD data), and usage overages aren't about "fairness," they're about protecting TV revenues from the inevitable rise of Internet video. Similarly, consumer advocates have argued that if just "5%" of users are causing problems, why not push those users to business-class tiers, instead of imposing surcharges on your entire userbase? The answer is that usage caps are about one thing and one thing only: raising rates on uncompetitive markets where users can't flee to cheaper, better service.

Insiders have told me Cox is planning to move forward with usage charges for all of the company's markets depending on the success of (read: customer response to) this initial Cleveland trial. Cox however says an expansion is, at least, not "immediately" imminent.

"We have no immediate plans to extend the trial beyond Cleveland," Cox told DSLReports.com.

Cox customers worried about an expansion of Cox's policies may find it useful to file a complaint with the FCC, as well as voicing their disapproval to Cox directly.

Most recommended from 24 comments



wavelength
CyberSec Pro
join:2015-05-22
Raleigh, NC
Juniper SRX240
Ubiquiti UniFi UAP-AC-PRO

21 recommendations

wavelength

Member

The "fairness" angle is a smokescreen

The fairness angle that all of these providers use is a marketing smokescreen. This IS about monetizing data usage to buoy declining revenues in other business lines, like voice and video. If you watch their subscriber numbers (for public companies), you see that this push really kicked in when growth slowed or switched to a slow decline.

As a former (happy) employee of Cox and another (HUGE) cable company, we used to talk regularly about how high our margins were on the High Speed Internet product. Our cost of providing High Speed Internet was quite low compared to the revenue it brought it, mostly because the video products had absorbed most of the huge capital investment required to deliver it - fiber in the field, coax in the field, taps, head-ends, etc. Data was just an overlay on the video network. Upgrading from DOCSIS 1.1 to DOCSIS 3.0, for example, was such a small incremental cost to us that break even for a hub was much faster than for any other product.

So there is no issue with the data products not making enough money and there never has been.

This really is a response to cord cutting and, more worrying to all of the operators, cord shaving. As video revenues decline, it threatens to make those products upside down - costing more to provide it than the revenues it generates. That in turn would put more pressure on other products to pick up the slack on the capital costs involved in maintaining their network. It snowballs from there... If data has to cover more of the network costs, that then reduces profits, which are needed to fund upgrades...

At least at Cox they knew it was coming. We were talking about the effect OTT video was going to have on us back when it was still in its infancy (back when Netflix very first started streaming).

The problem is that all of the operators are struggling with figuring out how to maintain the cash flow needed to keep from being way in the hole on their video products in the future... Unfortunately coming out and saying that is harder than unleashing the marketing folks and letting them come up with the "fairness" argument.

If they were really going to go with "fair" pricing, there would be a port charge (a basic connection fee without usage) and then you would be billed on 95th percentile usage, the same way many businesses are billed. The problem with that is it would break the fixed fee structure that makes revenues predictable and product cross-subsidization easier.
bytelynx
join:2014-09-04

4 recommendations

bytelynx

Member

Cox is terrible

I have a family of 5 and was thinking about moving to the ultimate tier due to hitting my 700 cap each month. Not now. To take away something by half and not lower the price is horrible. This industry needs to be disrupted and Google fiber won't be able to do it alone.
davidhoffman
Premium Member
join:2009-11-19
Warner Robins, GA

3 recommendations

davidhoffman

Premium Member

Cox usage caps.

The caps listed in the posting are too low. Whoever came up with them is not thinking about how the use of internet services has changed over the recent years. If Cox has to have caps then I would set them as follows:

Starter 250 GBs 25 Mbps/ 2.5 Mbps
Essential 500 GBs 50 Mbps/ 5.0 Mbps
Preferred 1000 GBs 100 Mbps/ 10.0 Mbps
Premier 2000 GBs 200 Mbps/ 20.0 Mbps
Ultimate 3000 GBs 300 Mbps/ 30.0 Mbps

Gigablast 10000 GBs 1000 Mbps/ 100.0 Mbps
Can be done with DOCSIS 3.0 or 3.1, no FTTH needed.

imanogre
join:2005-11-29
Smyrna, GA

3 recommendations

imanogre

Member

Capitalism

In my best Mighty Mouse Voice

Google Fiber to save the day
DarkSithPro (banned)
join:2005-02-12
Tempe, AZ

1 edit

2 recommendations

DarkSithPro (banned)

Member

This is probably a result of cord cutters and Net Neutrality

Since they can't rob other internet services for so called fast lanes, and people cutting the classic cable service for streaming services, this is probably a way for them to make up the lost revenue. If this is the game they're going to play then it only be fair that the data unused in the previous months be rolled over. if I pay for X amounts of data per month and I don't end up using it all then I should be legally entitled to use the remainder next month and so on.