Comcast, TWC Try On Data Caps

Second-Biggest MSO Also Raising Fees As Internet Category Struggles
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Usage caps paired with per-Gigabyte overage fees might eventually become the broadband norm as U.S. MSOs figure out how to monetize the emergence of over-the-top video while their video-subscription bases continue to melt down.

Lately, though, broadband strategies have focused on lighter Internet users — a group that probably spends more time checking email than streaming Netflix’s latest original series.

As Time Warner Cable tweaked and broadened its usage-based policies for casual Web users, Comcast unleashed its first market trial centered on that group.

TWC, the second-largest U.S. MSO, late last month altered its optional, usage-based “Essentials Internet” offering. It now includes a 5 Gigabyte-per-month plan that offers $8 off the retail price (versus the original $5 credit) if customers stay below that threshold, as well as a new 30-GB plan that bestows a $5 credit if customers do not exceed the cap. Essentials Internet subscribers who exceed their monthly limit are also charged $1 per GB, though overage charges are not to exceed $25 per billing cycle.

That’s not the only broadband policy change underway at TWC. The MSO also confirmed that it is increasing its monthly mode-mrental fee from $3.95 to $5.99 per month for most of its residential customers. Those who take the premium Signature- Home bundle are exempt.

The new rental policy comes in tandem with TWC’s decision to raise Internet-service rates by an average of $3 per month. The MSO is putting all of these changes into the mix as growth in the category shows signs of struggling. Last week, TWC announced it added 21,000 high-speed Internet subs in the second quarter, well below the 55,000 expected by analysts.

Top MSO Comcast, meanwhile, is taking a page from TWC’s Essentials Internet playbook with a trial set for Fresno, Calif., late next month. Its “Flexible-Data Option” will cap monthly usage at 5 GB per month before customers must pay $1 for every GB consumed beyond that ceiling.

Customers who don’t blow through the monthly cap get a $5 credit. Comcast is offering this option only to Fresno-area customers who take Economy Plus, a tier that delivers up to 3 Megabits per second downstream for $39.95 per month.

To keep those trial customers apprised of their data usage, Comcast will send in-browser alerts and an email informing them when they reach 90% and 100% of the 5-GB threshold. Customers of all Comcast tiers can track usage via an MSO-supplied data consumption meter.

Comcast has not announced any plans to extend this particular trial outside of Fresno, a spokesman said. He said a “very small group” subscribes to Economy Plus, noting that Comcast recently sent a letter to qualifying customers in Fresno about this new option. Comcast added 187,000 high-speed Internet customers in the second quarter, extending its total to 19.98 million.

Comcast is also piloting usage-based soft cap policies targeted to a wider set of high-speed Internet customers. In Tucson, Ariz., and Nashville, Tenn., Comcast is charging $10 for a bucket of 50 GBs of data if customers exceed their cap in a given month. In Nashville, Comcast has set a 300-GB ceiling for all customers.

The MSO is using a more variable plan in Tucson, setting the monthly threshold at 600 GB to customers who take its 105-Mbps (downstream) DOCSIS 3.0 tier; 450 GB to those taking a 50-Mbps broadband service; and 300-GB for customers taking any other speed tier.

TAKEAWAY

The nation’s two biggest MSOs are looking to data caps and per-GB overage fees as an option for light Internet users.

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