US Bandwidth Consumption Surges As Usage Caps Pose A Looming Threat

from the full-on-squeeze dept

We've noted for years how broadband providers have increasingly imposed arbitrary, confusing, and punitive usage caps and overage fees to cash in on the lack of competition in US broadband. Not only have industry executives admitted these limits aren't technically necessary, they've increasingly been abused to hamstring competitors. AT&T, for example, doesn't impose the limits on its broadband customers who use its streaming video service (DirecTV Now), but will impose the added charges if you use a competitor like Netflix.

For many years ISPs have slowly but surely imposed such limits hoping that consumers wouldn't notice (think of the frog in the pot of boiling water metaphor). But as streaming services have increasingly embraced high-bandwidth 4K streaming, consumer usage has started to push back hard against some limits. For example, Charter Spectrum last week noted that the average Charter subscriber (one that doesn't subscribe to traditional TV) consumes just over 400 gigabytes of data per month:

"Monthly data usage by our residential Internet customers is rising rapidly and monthly median data usage is over 200GB per customer. When you look at average monthly usage for customers that don't subscribe to our traditional video product, usage climbs to over 400GB per month."

It should be noted that Charter is one of the only major broadband providers that doesn't impose usage caps and overage fees. Why? It was banned from doing so for six years as a condition of its 2016 merger with Time Warner (read: in four years it probably will). Many DSL providers (AT&T, Centurylink) impose caps as low as 150 GB per month, with overage fees as high as $10 per each additional 50 gigabytes consumed. Elsewhere, I've seen caps as low as 50 GB per month.

Initially, ISPs tried to claim these limits were necessary to manage congestion. After that claim was repeatedly debunked, you'll find most don't even try to justify the move. But again, the fact that these caps are completely technically unnecessary just kind of falls by the wayside as the practice has expanded.

A home full of heavy gamers and streamers can already eat through these limits in pretty short order. A recent study by OpenVault found that Internet customers are using an average of 268.7GB per month. Those numbers are about to change dramatically with the launch of game streaming services like Google Stadia, which eliminate your local game console and shift all computing power to the cloud. Such services will need at least 25 Mbps to stream games at 60 FPS, and are certain to drive users toward costly restrictions and overages.

Of course this was all by design. Usage caps aren't just glorified price hikes, they're increasingly used by incumbent ISPs to harm competitors. In a functioning market, these behaviors would be restricted by either healthy competition (users would just switch to an uncapped ISP) or regulators (who'd clearly note such limits are misleading, unnecessary, and often anti-competitive). But since most broadband consumers have few if any real broadband options and regulatory capture is so totally hot right now, its a problem that remains stuck in neutral for the foreseeable future.

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Filed Under: bandwidth, broadband, data caps, usage caps