Commentary

Comcast CEO Defends Controversial Data Caps

Comcast's metered-billing plans have sparked criticism by consumers, advocacy groups and at least one rival online video provider.

But CEO Brian Roberts insists that the company's controversial billing system is in line with practices in other industries. "If you drive 100,000 miles or 1,000 miles you buy more gasoline... If you turn on the air conditioning at 60 versus 72 you consume more electricity,” Comcast CEO Brian Roberts said at Business Insider’s Ignition conference this week. He adds that the same system holds true for data usage and for wireless devices: "The more bits you use, the more you pay.”

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Many Comcast subscribers still have unlimited data, but the company has been rolling out usage-based billing in test markets across the country. Customers in those areas -- around 15% of Comcast's broadband footprint -- can only consume 300 GB of data a month before they are charged overages of $10 per 50 GB. The company also is experimenting with charging subscribers an extra $30-$35 fee for completely unlimited data.

Currently, around 8% of people in affected markets consume more than 300 GB and must pay overages, according to a company spokesperson.

Critics say the caps are entirely arbitrary. They also say that cable providers like Comcast have an incentive to price broadband at rates that will discourage people from replacing their cable video packages with streaming services. Public Knowledge, which has been pressing the Federal Communications Commission to investigate data caps, has said that people who want to replace cable video with streaming offerings in HD will need at least 684 GB of data per month.

Observers also point out that cable companies like Comcast can bill people in ways that discourage them from using rival services. For instance, Comcast unveiled "Stream," a $15-a-month streaming television service that won't count against users' data allotments.

So far, Roberts' defense of Comcast's usage-based billing hasn't impressed company's critics.

Matt Wood, policy director at the advocacy group Free Press, points out some flaws in the CEO's reasoning. "It's not actually a consumable resource," Wood tells MediaPost, referring to Comcast's network. He adds that the network is more like "a pipe" than electricity or gasoline. "It's either being used or not, but the capacity doesn't go up and down," he says.

Wood adds that Comcast's billing scheme is comparable to charging TV viewers based on the number of hours they watch television, instead of the number of channels they receive.

Karl Bode at DSLReports notes, also notes that broadband isn't comparable to gas or electricity. "Whether Comcast's delivering 10 Mbps or 100 Mbps, the cost to do so remains fixed. While there certainly are network capacity issues at play (usually overcome with modest infrastructure improvements), the comparison to real utilities ends there," he writes.

"Comcast is simply creating artificial shortages here where none exist," adds Brad Reed at news site BGR.com. "The costs associated with moving data from one point to another are nothing like the costs of producing electricity or water. This is why ISPs have been able to offer unlimited data usage for so long without going broke."

3 comments about "Comcast CEO Defends Controversial Data Caps".
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  1. Edward Omeara from MediaHound, December 9, 2015 at 6:03 p.m.

    Comcast should not be treating consumers this way.  I've been living this problem for months, and they are unresponsive. One Comcast operator suggested I change to a Business account, all the others didn't appear to understand the issues. Unlike the industry examples Mr. Roberts cites, there are no mechanisms or regulations for monitoring the accuracy of Comcast metering and data flow, let alone standards for offering Consumers the ability to manage data usage. "It is" what they say it is, after the fact.

    I'd like to monitor data speeds and throttling as well, and there are no consumer tools. Applications and advertising dramatically impact the amount of data transferred and consumers have zero visibility or control.  Which is more efficient, the Netflix native SmartTV app or AppleTV version? Pandora through my stereo receiver or my Xbox? And what of all our smart phones that automatically switch to WiFi - which data stream is more cost-effective?  (I won't comment on QoS issues and stream disruptions, a whole other can of problems). There are too many variables for consumers to know what is an acceptable, affordable consumer experience and no industry leaders appear to be working to standardize data dimensions or solve for the consumer - they're all working to pick ad dollars from each other's pockets. Comcast and other providers should open API access for others to create these data management tools. Meantime, the FCC and FTC should engage and counter the madness.

  2. Leonard Zachary from T___n__, December 10, 2015 at 10:15 a.m.

    Google Fiber in a Comcast market? Data caps are not logical. Comcast is just a pipe not the resource of where contnet is being sourced.

  3. Daniel Caccamo from Convertant, December 10, 2015 at 9:14 p.m.

    Mr Roberts should be more focused on improving his companie's failing Customer Experience Index. 

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