Comcast's Internet Cap Debate

The biggest debate in tech right now is whether or not Comcast (CMCSA) is pure evil. The cable giant says that starting Oct. 1, it will cap its residential customers' Internet usage at 250 gigabytes of data.

On the surface, that seems kind of reasonable. The limit is about 100 times greater than the amount of data an average Comcast user downloads per month. You'd have to download four standard-def movies a day or 62,500 songs a month to reach 250 gigs. Comcast argues that in most cases, the limit will shut down pirates who illegally download gobs of movies and songs and slow the whole system for everyone else.

But the tech community is absolutely hammering Comcast over this. GigaOm declares it's the "end of the Internet as we know it" -- well, for Comcast's customers, at least. (For Verizon (VZ) and its FiOS high-speed Internet offering, Comcast's decision must look like manna from heaven -- a strategic hole in Comcast's business the size of a small planet.) ZDNet similarly argues that bandwidth caps will kill innovation on the Web -- since a lot of innovation is about taking advantage of broadband speeds and high-capacity hard drives. The Slashdot crowd is typically apoplectic about anything that smacks of repression of their Internet freedoms.

To be honest, Comcast's decision seems to me to be about television, not the Internet. Comcast's business is still centered on providing cable TV at $100, $150 a month. Internet video is starting to challenge traditional television, whether its reruns on Hulu or live convention coverage on MSNBC.com. Comcast wants to sell movies on demand over its cable system, but Netflix (NFLX), Amazon (AMZN) and others are selling movies over the Web for less. And video and movies, of course, are the largest bandwidth hogs on the Net.

So Comcast -- like Cox and other cable companies -- is in the position of providing a service that enables one of the biggest threats to its core business. That's one heck of an internal conflict. For now, the decision seems to be in favor of protecting the TV side of the business.

Comments

[Christopher...:]

I think the problem with their plan to cap is that they are warning clients once and then kicking them off their network entirely for a year and not providing a metering application.

They are already tracking the data clients use. Why not report on it through their website and when a client hits the cap give the customer choices:

1. go over and deduct the overage from next month (so next months cap is smaller)
2. pay for the overage
3. shut of your internet for the rest of the month

That sounds like a much more friendlier approach for legitimate high bandwidth users.

2008 Aug 31 08:09 AM

[Ankur Shah:]

It will also save Comcast's resources and improve their margins by a little as the system intruders will be weeded out. Talking about a normal customer, I presume 2 GB downloading capacity is enough and the space hoggers can pay more if they need more downloading capacity

I think it will be a very strategic move... They can even lower their rates for those who buy into the lower downloading capacity than lets say 250 GB.

2008 Aug 31 12:13 PM

[getrichslow:]

I think this move is a good one. I download movies from the internet and I know I don't come anywhere near that limit. This is much better than the whole "traffic shaping" crap they tried to get away with earlier this year. A download cap is straightforward and fair to everyone. If users don't like this they can go to a competitor, but I have a feeling all ISPs are going to have to do something similar.

Bandwidth will only get cheaper, and as new wireless technologies come along there will be more competition. The market will dictate what is fair in the way of bandwidth caps.

2008 Aug 31 02:36 PM

[You're Kidding:]

A Comcast cable installer told me the company is jerry-rigging to save money, and the infrastructure is in bad shape.

There is no competition where I live, cable wise, so its Comcast or satellite only. That's not what I would call a "choice."

As the author pointed out, they are putting the screws to the users (and this is just the beginning) in order to maintain control. They have a conflict of interest internally between cable TV and high speed access, which is like getting hungry and eating your own foot. This is inefficient and stupid, and typical of what "the market" does when individual companies have too much local control.

I don't know why no other ISPs are available on Comcast's lines, but you can bet that Comcast wants to keep it that way, and will do so if they can get away with it. (When I lived in San Diego, you had a choice of four ISPs over the Time Warner lines - this is the way it should be.)

If anyone is stupid enough to think the "Market" is efficient is taking care of these kinds of issues, when there isn't enough competition, I feel sorry for your attempts to make money in the marketplace.

And User 208762, you are really naive. You think Comcast is going to lower their prices for users who use less bandwidth? What planet where you raised on? HD Video is coming full bore over the internet and today's speeds and capacity will soon look like the old days of 28.8 modems. Open your mind and start looking long term. You sound like a corporate puppet.

We should all be very careful about the idea that what's good for Comcast is good for us. It isn't. Bandwidth caps and tiered pricing will make them richer, but will lesson the experience of the internet for the rest of us. These companies should be indentured to us, not us to them.

2008 Aug 31 10:06 PM

[mike mohr:]

Use Direct TV or Dish and do not put up with Comcast BS.

2008 Sep 01 12:37 AM

[Hairy Herry:]

Mike,
Sorry man, but I live in an apartment that has CommieCast and does not allow either DirecTV or Dish per their outside antenna restrictions to tenants. With such restrictions on the radar screen, I'm basically screwed until I move out next fall, and NO, WildBlue is not an option either. Only AT&T DSL competes, but I've received no assurances they'll provide video to my location. I'm already expressing my concerns about this subject to my landlord and their supervisors!

2008 Sep 01 06:36 PM

[BudH:]

I want the bandwidth hogs contained. They slow down my service. People who want huge bandwidth access should be paying for it.

2008 Sep 03 12:59 PM

[Jinx101:]

BudH sounds like a Comcast plant. ;P 1.) Comcast doesn't even give people the option of paying for it. 2.) This is anti-competitive business actions.

Those "people" aren't slowing your service down except for _maybe_ during peek hours. Personally, I never notice service degredation which is the one good thing I can say about Comcast... and that's _WITHOUT_ the cap.

This whole cap is about Comcast unfairly keeping their competition down. Compare it to Microsoft... it's even more aggregious. It would be like Microsoft saying "Anybody can write programs for Windows, but you're only allowed to use 50meg of ram and no more that 25% of the CPU cycles at any point". Imagine the anti-competitive suites in that case when they put un-needed constraints on competitors.

2008 Sep 13 12:15 PM

[Snake445:]

I have been a costumer of comcast for 10+years as most people have and i also have phone, TV, And internet. With this recent decision of a 250GB cap i will be terminating my account with them. Granted i don't pirate stuff and download huge movies everyday but it's nice to know i can go on you tube and watch 100 movies if i wanted to while downloading music and talking to my fellow gamers in ventrilo without worrying about a limit.

Also, I do live in a huge city, Boston to be exact. I do not notice and slowdowns at all in the internet at any point of the day. I download at a max of 750Kbs and at times i hit 1.5 meg a sec, which is nice. I also pay 65$ a month for this internet as well. They already make enough money off of every single one of us there is no reason to put a cap on us. Take that millions of dollars and fix there service in areas that slow down at times. Or as they say "most cases, the limit will shut down pirates who illegally download gobs of movies and songs and ***slow the whole system*** for everyone else."

If anyone had some common sense so that can realize they wont stop this, Never will they stop these people that download anything. This is only a fake reason to make there pockets bigger as far as i can see. Every year they never fail to raise the monthly charges to the people, And never change there service. Lets face it, People will still download the same. Do the same things as they done in the past only difference is we may go over our "limit" there service in the slow areas will be just as "slow".

For those people that are stuck with only comcast i wish you luck. Now i will be switching over to verizion.

2008 Sep 17 08:25 PM