As Comcast (NASDAQ: CMCSA) continues to face criticism over its usage cap tests, the MSO said none of the policies are new or secret. In fact, a company representative told FierceCable that Comcast outlined its usage-based pricing philosophy back in May 2012 in a company blog post.
The post, written by Cathy Avgiris, at the time executive VP and GM of communications and data services for Comcast Cable, was written as Comcast suspended a 250 GB hard cap on data usage. It outlined the usage-based pricing strategy and trials the company is currently conducting in a handful of markets.
"We are going to trial improved data usage management approaches comparable to plans that others in the market are using that will provide customers with more choice and flexibility than our current policy," Avgiris said. "We'll be piloting at least two approaches in different markets, and we'll provide additional details on these trials as they launch. But we can give everyone an overview today."
The purpose of the data-usage limit, Comcast spokesman Charlie Douglas told FierceCable, has always been to "create a more fair approach, where the heaviest data users pay a little more and the light data users get to pay a little less. It means the heavier data users will pay a little more for us to re-double capacity on our network every 12 to 18 months."
Douglas was attempting to clarify Comcast's position -- and establish its transparency -- as a fresh round of internal Comcast documents surfaced on Reddit over the weekend on Comcast's approach to its caps.
The internal memos, apparently posted to Reddit, seek to advise Comcast customer service representatives on how to message customers and the public at large on the MSO's new usage-based pricing trials that are currently occurring in markets all over the Southeast and part of the Southwest.
For example, Comcast reps are asked not to call the usage strategy a cap. "This is not a cap," the document said. "We do not limit customer's use of the Internet in any way at or above 300 GB."
In explaining the company's rationale, reps are also advised to say it's about "fairness and providing a more flexible policy to our customers."
"Don't say: 'The program is about congestion management.' (It's not)," an internal memo added.
That line generated plenty of media coverage. "Leaked Comcast memo reportedly admits data caps aren't about improving network performance," reported the Verge.
Again, Douglas said Comcast already clarified the distinction in its 2012 blog post, which attempts to clarify the position of the 250 GB cap relative to policy established in a white paper that five Comcast engineers wrote in 2010 titled Comcast's Protocol-Agnostic Congestion Management System.
Comcast is currently testing a number of usage strategies. In many of these trials, users who exceed 300 GB a month are charged $10 for each additional 50 GB they use. In some trials, users are able to pay a flat monthly fee of $30-$35, depending on the market being tested, to have unlimited usage.
Douglas said only 8 percent of Comcast's users exceed that 300 GB threshold, and those heavy users consume about 50 percent of the data on Comcast's network. And of those heavy users, 60 percent said they were interested in paying an additional flat fee for unlimited usage.
Other MSOs have already deployed usage-based pricing, without much scrutiny. Suddenlink CEO Jerry Kent told investors this week, for example, that his cable money makes "significant" revenue from the practice.
While most users don't approach 300 GB of data in any given month, the move to 4K video may increase the amount of data average users consume.
For more:
- read this Reddit posting
- read this story from The Verge
- read this Consumerist story
Related articles:
Comcast quietly expands data usage trials to four additional markets
Comcast takes wireless-style 'data usage trials' live in Florida
Suddenlink's Kent: Internet overage charges 'have become a significant revenue stream for us'