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Why your Internet service provider wants to nix all-you-can-eat data buffets

Robert Strohmeyer | Oct. 18, 2013
As the industry moves toward 'metered' broadband plans, hardcore users will feel the hurt.

Depending on the carrier, usage caps can vary from 150GB to 300GB. On AT&T, residential high-speed Internet customers already have a cap of 150GB, and U-Verse Internet subscribers have a cap of 250GB. Meanwhile, Comcast is experimenting with caps ranging from 300GB to 600GB, depending on the service tier.

Whether metered billing is a problem depends entirely on the kind of Internet user you are. By all available measures, the overwhelming majority of broadband subscribers won't see any impact from emerging data caps and metered billing plans, and those in the lowest usage tiers may even see a small discount on their service in the short run.

According to Comcast, the current median monthly data usage for its customers is roughly 16GB. AT&T claims that the top 2 percent of its users (in terms of data consumption) eat up 20 percent of its network's total available bandwidth. Telecom analyst Teresa Mastrangelo, principal at Broadbandtrends, suggests that the 80/20 rule applies, in that 80 percent of the data is going to 20 percent of users. "It may even be closer to 90/10," Mastrangelo says.

But Mastrangelo questions why any ISP would risk angering its whole subscriber base by imposing caps and metering to deal with the heavy usage patterns of just a few.

"The downside of metered broadband for most consumers in the United States is that we've never been metered," says Mastrangelo. "It's not like mobile phone use, where we're accustomed to tracking how much data we consume. Most consumers have no idea how much data they're consuming."

And having a data cap that exceeds a typical user's consumption by 600 percent seems, to her, a strange way to address the problem, Mastrangelo says.

The reason for metering
ISPs cite self-defense, pointing to the extreme volume of data some users consume. For example, in August of this year, Verizon cracked down on one FiOS user whose monthly consumption amounted to more than 38 terabytes. That's per month. Without some kind of data cap, says one ISP spokesperson, providers have no way of cracking down on abusers.

Charlie Douglas, senior director of corporate communications for Comcast, chalks it up to fairness: "We think it's fair that people who use more can pay more to use more, and people who use less can pay less."

But DSLReports' Bode says the fairness argument is bogus, because American consumers already pay "more than their fair share" for bandwidth.

"If carriers were truly interested in fairness, you'd see grandmothers who only check email and the Weather Channel [website] paying $10 a month for broadband because they use few if any resources," Bode says. "Instead, they pay $50-plus."

 

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