Fancy That: Comcast's Network Holding Up Fine Without Usage Caps

Fancy That: Comcast's Network Holding Up Fine Without Usage Caps

For many years in the early aughts, broadband providers insisted they needed to impose usage caps and costly overage fees to help manage network congestion. By 2015, leaked documents from Comcast revealed that was never true. In the years since, even industry CEOs have acknowledged that the limits are little more than an additional tax on captive customers in uncompetitive U.S. broadband markets.

As COVID-19 struck, ISPs quickly bowed to pressure to eliminate such restrictions so home-bound Americans weren't inundated with significantly higher bills. In a press release, Comcast makes it clear that its network has (gasp), performed perfectly well under the added load -- despite a 32% increase in upstream traffic and 18% increase in downstream traffic. There's been a 77% surge in gaming downloads, a 37% bump in streaming video consumption, and a 228% bump in VOIP and teleconferencing use. This is, Comcast says, causing no issues for Comcast:

"Our ongoing, proactive network investment to add fiber and capacity has put us in a good position to manage the increases that we are experiencing today. While the COVID-19 experience is new and unprecedented, the Internet ecosystem is flexible and performing the way it was designed. We engineer the network to handle spikes and shifts in usage, and what we have seen so far with COVID-19 is within our capacity."

Many ISPs, like Comcast, backed off the "congestion" claims a few years ago after their own memos, and numerous researchers and journalists, kept debunking them.

These days, most ISPs can't even be bothered to offer a justification for the arbitrary limits. When they do attempt to justify them, they're usually (falsely) passed off as an "issue of fairness." But that's false too: Americans already pay some of the highest prices for broadband in the OECD, and flat rate broadband is perfectly profitable, regardless of usage. Comcast's CEO has also routinely tried to compare bandwidth to electricity and gasoline consumption, which is again a misleading comparison to finite, completely different resources -- all in a bid to make the restrictions sound sensible and necessary.

Imposing additional surcharges on everybody isn't an issue of fairness, it's monopoly price gouging of captive customers. Such restrictions wouldn't work in competitive markets; users would simply flock to the uncapped provider. But thanks to apathetic US telcos that refuse to upgrade their aging DSL networks, Comcast is securing a bigger monopoly than ever across countless US markets. Worse perhaps: such limits create a perfect opportunity for ISPs to anti-competitively exploit them in their battle against streaming providers, something that's already happening at AT&T.

Yet there are still occasionally folks who try to justify these arbitrary restrictions as just normal, creative, business price differentiation. But that logic not only ignores the monopoly, consumer, and competitive problems noted above, it ignores that extremely heavy users of bandwidth -- say like a guy running a server in his garage -- can already be (and are) nudged to more expensive business class tiers without applying confusing, costly additional surcharges on everybody. It also ignores that (again due to no competition), you'll never see very light users (like grandma who just checks the weather and email) pay significantly less. She too pays a high price. Everybody pays a high price for broadband in America. Again, with with a few regional exceptions, because it's a broken, monopolized market.

Like so many "normal" behaviors, COVID-19 has exposed broadband usage caps as folly. Yet once things settle down it remains likely that large ISPs will bring back such surcharges -- along side ambiguous, debunked, and nonsensical justifications for them. After all, with very little competition in US markets, and US regulators now a rubber stamp for industry interests, who or what exactly is going to stop them?

Filed Under: broadband, congestion, data caps, home working, infrastructure