Comcast Planning to Cap Data Usage: Netflix Troubles Ahead?
While Netflix (NASDAQ:NFLX) is pushing for higher-quality video streams and more data usage, Comcast (NASDAQ:CMCSA) may be standing directly in the way, as news is out that the Internet service provider is planning data caps for all users soon. The caps may not seem like much right away, but data usage is likely to expand, and it could put a crimp on those services that send a lot of data to consumers — or on Comcast as upset users look elsewhere for service.
Digital Trends reports that Comcast Executive Vice President David Cohen announced during a MoffettNathanson Media and Communications Summit that the ISP would implement a data cap and usage-based billing for all of its customers within the next five years. This would be an expansion of the data caps it already as in place in Alabama, Georgia, Kentucky, Maine, Mississippi, Tennessee, and South Carolina, which stand at 300GB per month.
Cohen discussed the plan and the future of it, noting that it may start out at 350GB per month and eventually end up at 500GB per month after several years. However, he also claimed that the company didn’t want to implement a policy where the vast majority of “customers are implicated by usage-based billing and are all buying different packets of usage.” In other words, he wanted to be sure the data caps would be so high that the majority of users would be able to get by without needing to upgrade to a larger option. One issue is that these caps may be reasonable today and not cause much uproar, but by 2020 — when the caps could be reaching 500GB per month — they could be far too tight.