Mediacom invokes Oreos to defend data caps, bash Netflix

Mediacom

Mediacom made comparisons to Oreos and Lamborghinis in a letter defending ISPs’ rights to enforce data usage caps, while simultaneously bashing Netflix for arguing against the practice.

In a letter sent last week to the FCC, Joseph Young, senior vice president and general counsel at Mediacom, claimed that wanting unlimited broadband access for a fixed rate is similar to wanting neverending cookies, socks, gasoline or Starbucks lattes for a set price.

“In the case of virtually everything you buy, the fact that your cost goes up as you consume more will neither surprise you nor set you off on a passionate crusade to get the government to force producers to sell an unlimited quantity at a fixed price,” wrote Young. “Remarkably, the only exception to this truism we can think of is bandwidth.  A fair number of otherwise intelligent people vociferously complain about ISPs imposing a ‘cap’ on bandwidth usage. In essence, a bandwidth cap or allowance is simply a pricing mechanism by which those who consume more pay more.  Even though virtually every other industry prices its products and services in the same way, some people think that ISPs should be the exception and run their businesses like an all-you-can-eat buffet.”

In further defense of charging more to internet users who consume more bandwidth, Young pointed out the seeming hypocrisy of data cap opponents like Netflix. In particular, Young noted how Netflix only gives subscribers access to standard definition content at the $7.99 ‘basic’ price point and requires customers to pay more for high definition, essentially capping the “amount of bandwidth a user can consume at each of its service levels…”

Young also takes to task Apple, Google and Microsoft for using similar pricing structures to, in effect, limit customer bandwidth consumption.

For its part, Mediacom says it has worked to avoid raising broadband rates for its subscribers and sees data cap charges as a means to offset network costs by having the heaviest data users chip in more.

“Indeed, we have on several occasions increased the service speeds enjoyed by existing customers without increasing prices,” wrote Young. “It is extremely frustrating that we are criticized for instituting data caps that impact a tiny fraction of our customers instead of being recognized for pricing practices that have been more favorable to consumers than those of many, many companies in other industries which have increased their prices dramatically over the same period of time.”

Mediacom’s latest missive is partially in response to a letter Netflix sent to the FCC earlier this month, urging the Commission to limit ISPs’ ability to enforce usage based pricing models and data caps.

“Consumers increasingly expect more from their broadband connection, and they expect that broadband internet will deliver a television experience that is the same or better than what they receive from their cable service, satellite provider, or local broadcaster,” Netflix said in the letter. “Accordingly, Netflix supports the commission’s move to define mobile advanced telecommunications capability at the proposed 10/1 Mbps threshold and urges the commission to evaluate the effects that broadband caps have on the deployment of advanced telecommunications capability.”

Of course, Mediacom is not alone in enforcing data caps. Comcast sets data caps at 1 terabyte and smaller ISPs like Cable One have argued that data caps are essential to maintaining network performance.

For more:
- read this Mediacom letter

Related articles:
Netflix asks FCC to control ISP data caps
Netflix subscriber churn 'unexpectedly' higher as users react to end of grandfathered rates
Cable One says usage caps are essential for network performance

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