Comcast to offer tiered Internet prices based on usage

comcast to offer tiered internet prices based on usageMixed news for Comcast customers who work from home and/or watch a lot of streaming Netflix content in their off-hours: Pretty soon, you’ll have more data usage per month – but it’ll cost you. The internet provider is reportedly about to take its first steps towards the creation of a system of tiered Internet pricing based upon the amount of bandwidth customers are using,

Describing the need to change its Internet offerings, Comcast’s Cathy Avgiris wrote a blog post today that explained that “Four years ago, when we first instituted a broadband Internet data usage threshold, the iPhone had just been introduced…the iPad didn’t exist…and the experience of watching streaming video on your home PC or through a Roku box or direct to an Internet-capable TV was much different than it is now.” The four year number refers to the company’s 2008 cap of 250 GB of data usage per month for residential accounts, a cap that looks set to change no matter what the outcome is of two test programs Comcast has in store for customers.

The first program will, in Avgiris’ words, “offer multi-tier usage allowances that incrementally increase usage allotments for each [package] of high-speed data service from the current threshold” – which is to say, above a certain amount that varies dependent on whatever data plan you subscribe to, data plans will become pay-as-you-go for customers. The second will raise the 250 GB threshold for all packages to 300 GB and then offer additional gigabytes for sale beyond that (The figure suggested by Avgiris in the blog post is $10 for 50 GB).

While the tests are underway in particular markets around the US, the real winners may be those not in test areas; Avgiris writes that in those markets, “we ill suspend enforcement of our current usage cap as we transition to a new data usage management approach, although we will continue to contact the very small number of excessive users about their usage.”

In a conference call with reporters today, Comcast’s executive Vice President David L. Cohen said that, although “even today, only a very small number of our customers have ever even come close to the cap” – The average user takes up about 8-10 GB per month, according to the company – the time has come for Comcast to look into ways it can best adapt to the changing face of Internet usage. “Our network is not an infinite resource, and it is expensive to expand it,” he explained, adding that “The headline today should be that there isn’t a cap anymore. We’re out of the cap business.”

Beyond a vague “next few months,” the company hasn’t set a timeframe for the tests, nor has it announced which markets will be affected first. Such information should be forthcoming, as Avgiris’ blog post stresses the need for the company to “provide our customers with the information they need,” as well as a promise to, “at all times, including during our pilot tests… be transparent to our customers.” Comcast customers, watch your mailbox for notifications soon.


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