Cable Exec: Data Caps For All Are Inevitable, “It’s Not If … But When And How”

Image courtesy of angela n.

Hey, remember when your home broadband was effectively unfettered by monthly restrictions on downloads? Well, internet service providers would prefer that you didn’t have such free and easy access to data, because they want those data caps to be for all your internet use, everywhere, as soon as they can make it happen.

Speaking with communications site Light Reading in a web event, WOW COO Cash Hagen confirmed that data caps are going to be on the way to subscribers in the future.

No firm date was put on the eventuality, but Hagen said it’s inevitable across the board. “It’s not a matter of if we all do it at some point,” he said of data caps, “but when, how, and how the customers adapt to that.”

As for where to set that cap — whether the current vogue of 1 TB is right — Hagen was less sure.

Setting a limit is “more art than science,” he said. Determining what’s right is really about “what happens if I [the customer] exceed whatever that cap may be. Is it a cost per megabit, cost per gigabit over that? Really don’t know, and I think it’s a function of different areas of the world, different areas of the United States, and how much data gets used and what’s that data being used for.”

Compared to a behemoth like Comcast or the New Charter, WOW is a small provider, reaching roughly 782,000 customers as of December, 2015. It’s also generally slightly better-liked than its larger peers, although that’s a pretty low bar to clear.

Although WOW adding data caps would bring them to fewer than a million new subscribers, Hagen does seem to be right that they are becoming an inevitability, moving across the country one market at a time.

Charter is prohibited from imposing data caps on its customers until 2023 as a condition of its recent merger with Time Warner Cable and Bright House Networks. However, Comcast recently spread its 1 TB data cap across all of its national footprint except for the Northeast region.

Cox has likewise joined the 1 TB data cap party, and is beginning to expand enforcement of that cap into new regions.

AT&T also bumped its data cap to 1 TB this year, and put overage charges in place. And CenturyLink also started charging customers for exceeding their 600 GB cap this year.

In short, Hagen is right: it’s a definite trend.

Data caps, though, aren’t really about managing a network successfully, as ISP after ISP has admitted. The cost of delivering broadband service continues to go down, but ISPs are itching to adopt data caps as soon as they can.

Instead, they’re mostly about being able to keep making money while consumers are ditching traditional pay-TV and moving to a wide array of streaming, over-the-top (OTT) subscription video services. ISPs, both wired and mobile, can take advantage of customers’ overage-fee fears to implement zero-rating policies that exempt content they own — or that has paid them handsomely — from those data caps.

That’s a win for the ISP and its stockholders, but it may come at the cost of net neutrality. The FCC has recently investigated some zero-rating plans and found that they may hurt consumers. However, the FCC of next year may be much less inclined to investigate these issues than the current Commission.

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