Broadband

Comcast’s Cohen Foresees A Usage-Based Future

But Believes Most Broadband Subs Won’t Be Affected By Such Policies 5/14/2014 4:15 PM Eastern

Comcast is testing usage-based broadband policies in select markets, and could roll out similar policies in all markets in about five years, Comcast executive vice president David Cohen said Wednesday at the MoffettNathanson Media & Communications Summit in New York.

 

“I would predict that in five years, Comcast at least would have a usage-based billing model rolled out across its footprint,” Cohen said in response to questions from MoffettNathanson’s Craig Moffett. “But I would also predict that the vast majority of our customers would never be caught in the buying [of] additional buckets of usage.”

 

He said the “basic level of usage” should be at a sufficiently high level that most customers won’t be impacted by a usage-based model, adding that the threshold for that potentially could extend to 500 gigabytes per month within that same five-year time frame.

 

Comcast is currently testing usage-based Internet policies in several markets, including Atlanta and Augusta, Ga.; Nashville, Tenn.; central Kentucky; Jackson, Miss.; Charleston, S.C.; Maine; and Mobile, Ala., with Atlanta still the largest of the markets that are presently conducting the trials. In those cases, customers are fitted with a usage cap of 300 GB per month before users would be faced with a $10 charge for each additional bucket of 50 GB.  Comcast is also testing a “Flexible-Data Option” that’s tailored for light Internet users on the MSO’s 3 lower-end Economy Plus tier. That opt-in trial caps usage at 5 GB per month before customers are subjected to per-gigabyte fees.

 

Cohen reiterated what Comcast has said – that 98% of customers in the pilot markets are not affected by the usage-based policy.

 

“We are very comfortable with the way we are proceeding,” he said, noting that the MSO won’t “shoot ourselves in the foot…by rolling something out that is going to turn people off to what arguably could be the most important product that we offer, which is our high-speed data product.”

 

During the discussion, Cohen also took questions about the FCC’s proposed network neutrality rule-making effort, which is slated to face a vote on Thursday and is being crafted to allow prioritized access.

 

Comcast is already on the hook to comply with the original, and now mostly-vacated Open Internet order until 2018 per the terms of its acquisition of NBCUniversal.

 

With respect to the new rulemaking effort underway, Cohen said the potential for paid prioritization components or some sort of Internet “fast lane” lack clear definitions.

 

“We are not sure we know what paid prioritization or what a fast lane is,” Cohen said. “No one has defined that, and no one defined it in 2010,” he added, referring to the original order.

 

As for the possibility of  new rules, Cohen remarked that there's been an “almost hysterical reaction” to a “document that no one has seen, which I always think is hazardous…I think a fast lane sounds bad. But since we don't know what it is, or what the definitions of it are, it's a little bit hard to be able to react to it."

 

Regardless, he said paid prioritization “has been completely legal for 15 or 20 years” and were not covered in the original 2010 order.

 

“Our offer is to comply with the 2010 FCC Open Internet Order, which did not prohibit paid prioritization. So whatever it is, we are allowed to do it,” Cohen said. “But whatever it is, we haven't done it.”

 

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