Comcast to cap data usage in Little Rock area, charge heavy online users extra $35

Little Rock area gaming enthusiasts and video streaming fans who spend hours each day playing Grand Theft Auto V online or binge-watching Netflix’s latest hit series may have to limit their favorite leisure activities or pay extra to do so, Talk Business & Politics has learned.

A Comcast spokesman confirmed Monday that local customers who use more than 300 gigabytes (GB) of data on the cable, entertainment and media giant’s local Internet network will soon have their data usage capped or be charged an extra $35 a month.

“Think of it in terms of other companies you do business with – such as water or electric: The more you use, the more you pay,” Comcast spokesman Alex Horwitz explained in an email exchange with Talk Business & Politics.

Horwitz, who oversees public relations for Comcast across the Southeast, said the 300 GB data cap testing limit in the Little Rock market will go into effect Tuesday (Dec. 1).  Customers can opt in and opt out of the $35 test program at any time, or choose to buy “50 GB buckets” of additional data for $10 each with no limit, he said.

Data caps first came in the spotlight in 2008 when Comcast updated its terms of service to include a hard data cap of 250 GB on residential broadband users. Horwitz said the new month data threshold will raise that cap to 300 GB for heavy users.

“300 GB is an extremely large amount of data. To put it into perspective, the median data use for our customers nationally is 40 GB per month,” he said.

The Comcast spokesman, however, would not divulge any specifics concerning how many of the company’s heavy Internet users in the Little Rock area would be affected by the monthly data threshold.

“About 10% of our Internet customers consume almost half of all the data that travels on our network, which means that 90% of customers are responsible for the other half,” Horwitz said in a list of talking points sent to Talk Business & Politics. “With that in mind, these trials are based on a principle of fairness. Those who want to use more data can pay more and those who want to use less data can pay less.”

When asked if there were other markets where the nation’s largest internet service provider (ISP) was testing data limits, the Comcast spokesman said he could not comment on the specifics of the company’s pricing plans. However, media reports show that Comcast has unveiled similar trials in markets from south Florida to Maine. The first data cap test was unveiled nearly two years ago in Atlanta, where Horwitz is based.

“I can tell that we’re trialing this across all of the Southeast markets that we serve,” he said.

In defense of the controversial program that will double Internet charges for some local broadband users, Horwitz said Comcast’s data usage testing is consistent with similar programs by other competitors in the wireline industry, such as AT&T, Mediacom and Suddenlink.

“Many ISPs in the U.S., Canada and Europe have data plans associated with their Internet services,” he explained.

CRITICS SAY CAPS PAD PROFITS, LIMIT INNOVATION
Opponents of Comcast’s data cap plans say it will pad the media giant’s bottom line and hurt the growing number of consumers whose normal data usage goes well beyond the 300 GB limit – mainly due to prevalence of digital TVs, online gaming and video and music streaming services such as Netflix, Hulu, Apple TV, PlayStation and Grand Theft Auto.

In a recent report on data caps by New America’s Open Technology Institute, the progressive Washington, D.C.-based think tank says the limits on data usage will affect consumers who have limited options for high-speed Internet access. The group also says the data caps are aimed at customers who are choosing entertainment and video options other than those offered by Comcast, which has seen a steady loss of cable subscribers over several quarters.

“On the wireline side, it is increasingly clear that ISPs – particularly the largest cable providers, which have more broadband customers than subscription TV customers – need new ways to monetize broadband service as their legacy TV business shrinks,” the report noted.

Philadelphia-based Comcast, whose NBC Universal unit owns and operates several news, entertainment and sports cable networks, has also unveiled its own Stream TV in selected markets such as Boston and Chicago. However, Internet-only customers who purchase the service won’t be faced with data caps that customers of similar services have to pay, according to the company’s own customer FAQs.

In addition, the Federal Communication Commission (FCC) has logged an increasing number of complaints against Comcast and other ISPs that are instituting data caps in areas that have limited options for broadband and high-speed Internet service. Many of those complaints came before Comcast’s announcement in May that it planned to abandon its $45 billion merger of rival Time Warner Cable. Comcast ended its merger plans after the FCC and U.S. Department of Justice officials expressed concerns that the proposed deal posed “an unacceptable risk to competition and innovation,” especially with the growing importance of high-speed broadband to online video and innovative new services.

Comcast added more than 320,000 high-speed Internet customers in the third quarter, the strongest for that period in six years. The number of Comcast Internet customers now stands at 22.86 million versus 22.25 million cable subscribers – the first time broadband users have exceeded cable TV watchers in the company’s history.