Posted in: Technology

The Sky is Falling: Comcastic Caps

comcastic

Starting October 1, Comcast users in the United States will have a 250GB per month data cap on their accounts, and will charge for excess usage.

Let me say upfront on a less serious note: You’ve got caps! Welcome to my world, one where I pay a small fortune for my 130GB a month on one of the largest cap plans available in Australia. Most people suffer on less than 15GB.

From a user viewpoint, I understand where Om and MG are coming from. Caps may limit online innovation by restricting the free market for unlimited content, particularly as we move to HD video that is seriously bandwidth intensive, and that’s not a positive thing.

And yet, bandwidth does cost money. We accept when we sign up for hosting that most providers cap the data our sites can use, and charge us more as we consume more, because they themselves are paying for data on a measured basis, not an unlimited one. The economics for an ISP are the same: they have to pay for data throughput, so the more you use, the more the wholesale cost of providing that data increases. It is not unreasonable to suggest economically that those who use more data pay more for it. Why should the person using 2GB a month subsidize the person using 2TB a month when we know that the higher use costs more to provide.

How many individual users would really use 250GB a month? It’s not 100% clear, but it would appear that (unlike with my account in Australia) uploads won’t be counted towards the 250GB a month, so even BitTorrent users who tend to leach a lot in terms of uploads, or even people live streaming 24/7 won’t be affected.

I looked at my usage figures for July 2007, a month I was home the entire time, and I just scrapped over 40GB for the month, although I have had some months closer to 50GB. This in a house with three times more internet connected devices than people, where I download a fair bit, I stream HD on my Apple TV, and even my alarm clock streams internet radio when it wakes me up in the morning. Of course this figure is creeping up, and will continue to do so, but as someone who is in front of a computer every day at home, I’m yet to go close to 100GB, let alone 250GB a month.

There’s also the presumption that capped plans will stifle areas like HD streaming, but it ignores the fact that these limits will simply create innovation in compression, so that the bandwidth required to deliver a HD movie is less tomorrow as watching a video online is significantly more efficient today compared to 4 years ago or further. You’ll also likely see distribution deals in place between content providers and ISPs that will create exemptions to the cap, for example anything I download now from iTunes isn’t counted in my iiNet cap. It’s not great level playing field innovation, but now caps are in, on Comcast at least, providers will be thinking about these very things today.

Comcast’s decision to impose caps is the end of the free honeymoon for internet users artificially brought about by an excess in bandwidth following the first internet crash. As we use more and more bandwidth, more pipes are required to meet demand, and somebody has to pay for it.

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Comments

6 Responses to “The Sky is Falling: Comcastic Caps”

  1. MG Siegler

    True that bandwidth does cost money Duncan, but Comcast also charges us quite a bit of money. The problem here is that this sets a dangerous precedent towards limiting the Internet. Others are sure to follow. It might be wrong to think that technology for serving data cost effectively can keep up with demand, but Comcast and others already limit speeds of downloads. That's why I hope someone (Google or anyone else) is able to come up with a wireless solution via the white space (in the U.S.) or something else. It'll happen eventually, we won't always been using coaxial cable for data transfers, but how long?

  2. ianbetteridge

    Even if (when) Google comes up with such a solution, it will not be free unless they choose to subsidize the service. And experience tells us that subsidized services like that, sooner or later, come with a price – would you use “free” bandwidth from Google if they put interstitials between every few web pages you viewed, for example?

    The root of this is really simple economics: someone downloading 100GB of data per month costs Comcast a lot more than someone using 10GB. At some point along the line of how much you download, Comcast stops making a profit on a per-user basis, and starts making a loss. At that point, unless you cut your usage, they're really better off if you're NOT a customer.

    Comcast hasn't set that 250GB cap in a vacuum: that's probably close to the point at which it starts to lose money on a per-customer basis (and in fact, that point may even be lower – it may have decided it can afford to subsidize customers who use, say, 100GB-250GB in the short term simply to have a higher cap).

  3. GMG

    This is all about money and everyone knows it. You compare 2gb user to a 2TB user. Great, but they both pay 50 bucks a month. This can been seem in a variety of ways.

    1. Comcast is screwing the guy who only uses 2gb.
    2. Comcast is complaining about a non-existant issue. Since there are LOTS of 2gb using people, and FEW 2TB using people. It all evens out. Now, as time progresses and more services become available over internet. The numbers will be reverse.

    If you ask me, comcast is simply trying to increase their profits by curbing those who use a lot of throughput. What for? That's to be determined. Perhaps they need more profits to expand their network, make it bigger, make it stronger. Lets look at the big picture here. Comcast has increased their network strength 3 times in the past 3 years for the sake of remaining competative (in the states at least, there's some countries that kick our ass on bandwidth).