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Still No Consensus On Broadband ISP Usage Cap Policies
AT&T made big headlines this week for unveiling a plan to cap monthly usage by its DSL subscribers at 150GB and its U-Verse subscribers at 250GB. Whereas other broadband ISPs like Comcast have long had a 250GB cap in place, what's different about AT&T's plan is that it is proactively saying it will charge $10 for every 50GB users exceed the limit. Other ISPs have tended to use the cap solely as a mechanism for throttling the tiny portion of users who exceed the cap, rather than as a way of generating extra revenue.
But even as politicians began protesting AT&T's new policy, Verizon took the opposite approach this week, saying it has no plans to impose caps or metering at this time, though it's leaving its options open. Meanwhile, the government doesn't seem to have a problem with usage-based pricing models, as the FCC essentially blessed this approach late last year, even as it was promoting net neutrality regulations. When its stance emerged, cable stocks bounced higher, even though Comcast for its part, immediately responded that it had no plans to implement usage-based pricing.
Confused yet? That's understandable. For now, there's no consensus on caps or how they should be implemented, and the reality is that for the vast, vast majority of today's broadband subscribers, they're irrelevant anyway. Even for those embracing Netflix streaming in a big way, caps are still relatively roomy. Further, broadband Internet service is an extremely high-margin business and so common sense suggests that rather than trying to stifle demand, broadband ISPs should be trying to encourage it. However, as Canadians, who live in an environment of ultra-low broadband caps can attest, that's not the way the world always works. There, supplemental broadband ISP charges are already suppressing enthusiasm for online video alternatives.Categories: Broadband ISPs
Topics: AT&T, Comcast, FCC, Netflix, Verizon
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