CenturyLink plans to join Comcast in testing a billing system that charges broadband customers based on how much data they consume.
CenturyLink Chief Financial Officer Stewart Ewing said during an earnings call that the company expects to run trials of pay-per-byte billing later this year. "Regarding the metered data plans -- we are considering that for second half of the year," he said. "We think it is important and our competition is using the metered plans today."
Ewing's statement came in response to a question about the "metered data opportunity." The questioner noted that telcos could have a "big opportunity" to price their services less than those offered by cable companies, but then "raise rates from high-end users."
Ewing didn't offer any additional details on the upcoming tests.
Since at least 2013, Charter has capped most users at either 150 GB a month or 250 GB a month, depending on users' connection speeds. But the company doesn't now enforce those caps with overage charges. Instead, it notifies people that they have exceeded the caps, and threatens to disconnect users who do so three times in 12 months.
Three years ago, caps of 250 GB a month seemed relatively generous. But today, with more content than ever available online, a sizable proportion of Comcast users are exceeding even higher caps. Comcast now imposes metered billing across around 15% of its footprint. Customers in most of those areas can only consume up to 300 GB of data a month before they are charged overages of $10 per 50 GB; currently, around 8% of people in affected markets must pay overages.
Critics have long called for regulators to investigate broadband companies' arbitrary decisions to impose data caps. While some Internet service providers have tried to justify usage-based billing by comparing broadband data to electricity or gasoline, critics rightly point out that data isn't a consumable resource.
Critics also question whether Internet service providers could implement this type of consumer-unfriendly move if they had to compete for customers.
The FCC's net neutrality regulations, passed last year, don't flatly prohibit Internet service providers from using metered billing. Instead, the agency said in the net neutrality order that it would examine data caps on a case-by-case basis to determine whether they were hindering consumers' ability to use the Web.