“The More Bits You Use, The More You Pay”: Comcast CEO Justifies Data Caps

Comcast CEO Brian Roberts

Business Insider

Comcast CEO Brian Roberts defended his company's much-criticized data caps yesterday, saying that consumers should pay for 

Internet access based on how much data they use, just like they do with gas or electricity.

"Just as with every other thing in your life, if you drive 100,000 miles or 1,000 miles you buy more gasoline. If you turn on the air conditioning to 60 vs. 72 you consume more electricity," Roberts said. "The same is true for [broadband] usage." Cellular data is already billed this way, "the more bits you use, the more you pay," he said. So why not cable Internet, too?

Roberts was being interviewed by Business Insider CEO Henry Blodget at the publication's Ignition conference. (Video is available here.)

"When I ask your customers, 'What should I ask Brian?' they say, 'Ask him about these data caps. They're driving me crazy,'" Blodget said. "Why data caps and what about this accusation that you don’t charge for your own data but you clobber people when they watch Netflix?"

Roberts didn't address the latter part of that question, which relates to Comcast's in-home streaming service that doesn't count against the cable company's data caps. But before making his gas and electricity comparison, Roberts repeated Comcast's argument that its data limits aren't actually "data caps."

"They're not a cap," Roberts said. "We don’t want anybody to ever not want to stay connected on our network."

While Comcast doesn't actually cut people off the Internet when they hit their 300GB-per-month data limits, customers do get charged an additional $10 for each 50GB used. Customers can also pay an extra $30 or $35 per month for unlimited data, depending on where they live. Comcast, the nation's largest home Internet provider, has implemented the data caps in many cities but hasn't rolled them out to its entire territory yet. "We're just trialling ways to have a balanced relationship," Roberts said. "You can watch hundreds of shows and movies and other things before you hit these levels, many devices, but I don’t think it's illogical or something people should be paranoid about... it's not that different than other industries."

Roberts said about five percent of customers in trial markets go over the data limits, but he was apparently relying on old data. Comcast has been quoted as saying that the number is now eight percent, and a Comcast spokesperson confirmed the eight percent figure to Ars today.

The 300GB data cap is just low enough to prevent many people from using online video streaming as a replacement for cable TV, Sling TV CEO Roger Lynch said this week.

In a report on Roberts' comments, Karl Bode of DSLReports pointed out that Internet data is not a finite resource like gas or electricity (at least electricity that comes from non-renewable sources). We'd add that there are limitations on how much data Comcast can deliver at any given time, but this is already accounted for in the higher prices customers pay for more megabits per second. Caps and overage fees generate revenue, but they don't manage congestion efficiently because they look only at total monthly usage with no regard for whether the network is congested at a particular time of day or night.

Electricity rates are also highly regulated by state governments to ensure fairness to consumers, while broadband prices are not. And while people who use less gas and electricity pay less, this generally isn't the case with Comcast Internet. Comcast does offer a "Flexible Data Option" but it's difficult for customers to come out ahead because they'd have to use 5GB or less per month in exchange for just a $5 credit. If customers use more than 5GB the credit is wiped out and they end up paying an extra dollar for every additional gigabyte, making it more expensive than typical Comcast plans.

Comcast itself acknowledges that monthly data caps are not driven by any technical needs. Leaked customer service documents say Comcast's data caps are not related to congestion management, and a Comcast VP recently said that setting the monthly data limit at 300GB is a "business policy" rather than a technical necessity.