Comcast: 'We Don't Need No Stinking Usage Fees'
At least one major cable TV provider next year will start billing broadband customers based on how much data they consume per month, but it won't be Comcast.
Two Comcast executives denied the rumor that the company might resort to "pay for what you eat" data plans as a means of exploiting the movement of cable subscribers to online streaming video services such as Netflix and Hulu Plus.
GigaOM reports that the execs claimed charging by usage would disrupt Comcast's overall plans to grow.
"Our goal is to grow share and grow ARPU [average revenue per user]," said Comcast CFO Michael Angelakis.
"We don't want to disrupt the consumer experience," he added.
Comcast is losing cable subscribers, but it's making up for those losses with broadband consumers. For example, in the July-September period of this year, Comcast lost 165,000 cable subscribers. Yet, during the same time, it gained 261,000 broadband users.
These broadband increases are typically accompanied with the purchase of another service--either phone or cable. About 70 percent of Comcast customers subscribe to two or more services. With this in mind, the company doesn't want to do anything--such as imposing usage fees--to disturb the nice growth in broadband subscriptions that it has been experiencing.
"We don't want to nickel-and-dime customers at this point," Comcast CEO Neil Smit told the conferees.
Comcast does try to get money from its broadband customers by selling them speed. The company just rolled out 100Mbps services throughout the system, and has been pushing the 25Mbps service as a holiday special.
The execs' disavowal of broadband caps is a little disingenuous, though, since it already has a data cap in place. However, the data cap of 280GB per month is very generous, especially since median monthly usage hovers somewhere around 6-8GB.
Earlier this year, AT&T adopted monthly caps for its DSL and U-Verse customers. The cap for DSL users is 150GB and for U-Verse users, 250GB. On average, the company said users of those services gobble an average of 18GB of data a month, and it expected only two percent of them to hit the cap.
As unpopular as usage fees are, there are those who see them as a fair solution to the growing demand for bandwidth driven by offerings such as HDTV.
"You should be charged Internet access based on usage," Michael Pachter, an investment analyst with Wedbush in Los Angeles told PCWorld. "It's just like our cell phone service is charged by minutes."
He noted, however, that the thresholds discussed by broadband providers are generous. For example, if you watched eight hours of movies a month in 1080p HD, you'd consume a little over 100GB of data. "No is talking about bandwidth caps that are that low," he said.