Comcast To Test Pay-Per-Byte Pricing

by Wendy Davis, May 17, 2012, 6:35 PM

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Comcast said today that it will shift to a pay-per-byte pricing model for broadband, meaning that the company will charge users based on how much data they consume. But the company also says that all subscribers will be able to consume at least 300GB of data per month before incurring overage charges.

Since 2008, Comcast has imposed a data cap of 250GB for residential users, so the increase to 300GB appears to mark an improvement. At the same time, as more and more content becomes available online, data plans that seem generous today might prove too limiting in the near future.

The ISP intends to test two pricing models. In one, users will be allotted 300GB per month, and then charged $10 for each additional 50GB. The other system will be tiered, where users pay upfront for a maximum amount of data. Comcast officials haven't yet said how much the tiers will cost, but the minimum data allotment will be 300GB with that model as well.

What's more, the company says that while it's testing the new pricing model, it will stop enforcing its 250GB monthly limit. In the past, the company suspended service to some users who exceeded their data caps.

Comcast also says that very few people approach the caps; the median data use hovers between 8 GB and 10 GB per month, Cathy Avgiris, Comcast Cable executive vice president, said in a conference call with reporters on Thursday.

Comcast's news comes as the company is facing pressure about its decision to allow Xfinity subscribers to stream shows to an Xbox without counting that data toward the 250 GB-a-month limit. The company says this arrangement doesn't violate the FCC's neutrality principles (which prohibit discrimination) because the data is traveling on Comcast's private IP network, as opposed to the public Web.

But critics, including Netflix CEO Reed Hastings, have said that the move will disadvantage other streaming services. That's because data streamed through Netflix or other competitors will count toward the caps.

Advocacy group Free Press was unimpressed with Comcast's news about tiered pricing. "While the move to increase its caps are overdue, the notion that Comcast would charge an exorbitant rate for additional bandwidth -- while continuing to exempt its own traffic under its Xbox deal -- illustrates that Comcast is really trying to discourage subscribers from experimenting with online video alternatives," policy adviser Joel Kelsey said in a statement. "We call on Comcast to drop the caps and these exorbitant overage fees entirely."

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