Comcast To Cord
Comcast plans to move all of its customers to usage-billing models within the next five years.Comcast VP David Cohen predicts that the cable and media giant will move all of its broadband customers to usage-based billing plans within the next few years. 'People who use more should pay more,' Cohen told analysts at the MoffettNathanson Media & Communications Summit. Comcast is experimenting with usage-billing models in some markets, with customers who pay for faster broadband speeds, generally receiving a larger amount of data transmission. For Comcast users in Atlanta, Maine and other select cities, the most common data cap currently stands at 300GB per month. Users who exceed this are charged (after an initial grace period) $10 extra for each additional 50GB of data usage.
The vast majority of cable customers fall far below this 300GB threshold. An FCC study conducted in 2012 showed a typical consumption rate of 40GB per month. Yet it's easy to imagine that the figure has increased since then, with the rise of popular streaming shows like House of Cards and the growing popularity of streaming set-top boxes. And the upcoming onslaught of 4K streaming content will only eat up more data.
Among those who should definitely be concerned about overage charges right now are cord-cutters like myself, who have ditched a TV package in favor of a broadband-only service. In my four-person household, with Netflix , Hulu Plus, and Amazon Prime subscriptions, we watch content on tablets, laptops, and desktop computers, in addition to a set-top box connected to our TV. Even with school and work hours restricting our home usage, we can still generate more than 200GB of usage per month without much effort.
Comcast's proposed merger with Time Warner Cable , a move that would combine the nation's number 1 and number 2 cable operators, is currently under review by both the U.S. Dept. of Justice and the FCC. Opponents of the merger, highlight the fact that the deal would give Comcast control of 35% of the entire country's broadband market. With cable and pay TV growth slowing, it's expected that streaming services will continue to expand their reach with consumers. Comcast, while certainly trying to stem losses of video subscribers, is nonetheless looking for ways to keep the profits flowing if a significant number of consumers start to opt for broadband-only plans. And usage-billing is the most obvious approach. Comcast, its rather specious claims of cut-throat competition notwithstanding, could essentially say, Want to drop our TV service? Go ahead. But it's going to cost you.
While Cohen argues for the fairness of heavy data users paying more, critics charge that Comcast is essentially double-dipping, as it already charges some content providers - most famously, Netflix - for faster access to its servers, ensuring buffer-free video delivery to Comcast users with Netflix subscriptions. In his statements, Cohen emphasized that, 'we will always want [usage caps] at a sufficiently high level that the vast majority of our customers are not implicated by the usage-based billing plan.' Yet, he hedges this by saying that while he doesn't want a model where customers are forced to buy different packages according to their usage, 'five years ago I don't know that I would have heard of something called an iPad. So, very difficult to make predictions.' Cohen's honesty is commendable, but those are hardly reassuring words to those who are looking at streaming-only options as a way to save money on ever-increasing cable TV bills.
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