Comcast’s Aim to Expand Data Caps to More US Cities
Mid-November Updates: What's Happening in the Media Sector?
Data caps
On November 5, 2015, citing DSLReports, Ars Technica reported that Comcast Corporation (CMCSA) is imposing data caps in more cities across the US while steadily trying out data caps in an increasing number of cities in the US. Comcast stated in an earnings call in 2014 that it was planning to roll out data caps across all its markets in the US over the next five years.
In 2015, Comcast started imposing overage fees for customers who exceed the 300 GB data limit. For example, if a user exceeds the 300 GB data limit for Comcast’s X1 Starter Double Play or X1 Preferred Double Play plan, Comcast will charge a $10 fee for every additional 50 GB the user uses. However, now Comcast has stated that it will not impose a data overage fees for a consumer exceeding the 300 GB data limit for the first three times the consumer goes over. For customers who want unlimited data, Comcast will charge them an additional $35 per month.
The graph below shows what a 2013 GigaOm Media report has stated—that data caps are increasing in the US.
Do data caps violate net neutrality?
Meanwhile, the aforementioned Ars Technica report also states that a consumer advocacy group, Free Press, has asked the FCC (Federal Communications Commission) to investigate Comcast’s data cap policy. The consumer advocacy group has argued that “imposing such caps is also part of Comcast’s scheme to stifle innovation and choice in online video and cloud-based services.”
The FCC’s net neutrality rules don’t explicitly rule out data caps, but they do specify that broadband providers must disclose its data caps to users. The FCC also states in its net neutrality rules that the FCC will review data caps on a case-by-case basis, if data caps “unreasonably interfere with or unreasonably disadvantage (i) end users’ ability to select, access, and use broadband Internet access service or the lawful Internet content, applications, services, or devices of their choice, or (ii) edge providers’ ability to make lawful content, applications, services, or devices available to end users.”
Comcast Corporation (CMCSA) makes up 2.5% of the PowerShares QQQ Trust, Series 1 (QQQ) ETF. The same ETF also holds 12.41% of Apple (AAPL) and 8.04% of Microsoft (MSFT) and 5.74% of Amazon.com (AMZN).
In the next part of this series, we’ll discuss Pandora’s acquisition of Rdio’s assets.
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