Heads up, Comcast internet customers. The same scheme that can explode your cellphone bill is coming to your home internet bill: Exceed your coverage plan, and you will pay a penalty.
Effective Nov. 1, Washington state consumers who get home internet from Comcast will face a new pricing structure: Anyone who uses more than one terabyte of bandwidth per month will get additional charges on their monthly cable bill; Comcast automatically will bill for additional “blocks” of 50 gigabytes, at $10 per block.
Above that 1 terabyte cap, Comcast will bill for as many extra “blocks” as a customer uses, up to a maximum of $200 per month.
So what’s a terabyte? See the explainer box nearby. Comcast contends only 1 percent of its customers use enough bandwidth to be affected.
But critics of this pricing method say usage will climb rapidly in the future, due to market trends such as higher-resolution TVs, cloud-backup plans for consumers’ data, the soaring size of computer-game downloads and the “cord cutter” movement.
Cord cutters are among the harshest critics of Comcast’s internet use fee; they avoid rising fees for cable-channel packages by watching shows over the internet, via streaming. Yet as Comcast loses cable TV customers, it retains internet customers – who face the new bandwidth fees.
According to Comcast, the reason for the use fee is “fairness.” Walter Neary, the company’s communications director for Washington, says the principle behind the new price is simple: “Use more, pay more.”
But fairness is in the eye of the beholder. Comcast’s data use fee will apply to video streamed from Comcast’s competitors, such as Netflix and Amazon Prime. The fee will not apply, according to Comcast, to most use of Comcast’s own streaming-via-internet service, StreamTV.
In many areas, including Spokane, Comcast has a government-granted monopoly for internet via cable. Its primary competition is DSL internet via old-school telephone lines. But consumers for years have been shifting away from reliance on landline phone wires, choosing instead to rely on cellphones and voice-over-internet phone providers such as Ooma and Comcast.
Consequently, those who feel jammed by Comcast’s near-monopoly might wish to ask: Who is looking out for the public interest in a competitive price?
The answer? No one.
According to Neary, it is only “the marketplace” that regulates Comcast’s prices.
Regulation, to the extent it exists, comes from federal government and cities:
The Federal Communication Commission regulates internet service providers. But FCC’s primary requirement is that pricing be “transparent” – in other words, charge whatever the market will bear; just label it clearly on the monthly bill.
Cities grant Comcast the right to install and maintain the cables that deliver its internet service. But city franchise agreements are long-term deals that focus on enhancements like telephone-pole guy wires and local-access cable television channels – not on the rapidly evolving ways in which internet is used and priced. For example: Since the dawn of YouTube and its viral cat videos, how many people watch the homemade programs on local-access TV channels?
In Spokane, it was 11 years ago that the city approved Comcast’s franchise to operate TV cables throughout the city.
Eleven years ago, consumers still bought music on CDs, movies on DVDs, merchandise from brick-and-mortar stores and TV programming via take-it-or-leave-it bundles of cable channels. On-demand streaming by internet, in those days, was in its infancy.
Comcast’s contract with the city will expire in December 2017. So far, city officials are in the earliest stage of discussing the renewal of that contract. They have hired Moss and Barnett, a Minnesota law firm, to do the negotiating. Formal talks have not begun.
To the extent city officials have goals in the talks, they are talking about better internet access for low-income people, not the new fees for “internet hogs,” as one official put it.
Will the public have a voice in city goals for the upcoming negotiations? Mayor David Condon said last week that public engagement “will be a key component.” But it’s too early, he said, to know what the public-comment opportunities will look like.
Right now, the city is asking Moss and Barnett for advice on what legal authority the city has in making demands of Comcast.
The last time the city negotiated with Comcast, it had a citizens advisory board. One of the members was John Waite, owner of Auntie’s Bookstore and Merlyn’s Comics and Games.
The advisory group’s role, Waite said, “was pathetic.”
“The city doesn’t really do any negotiating with the cable company. The cable company presents this thing and you go, ‘Wow, this is a lot of stuff,’ and you can’t read it all. In an advisory sense, you either approve it or disapprove it.
“It’s hard because we don’t have competition here, we have a monopoly. With a monopoly, they (Comcast) just literally don’t have to do anything. Being a small-business guy, you can’t help but feel this way. I’m big on competition. I just don’t believe in monopolies,” Waite said.
It takes so much investment to set up a cable infrastructure, he added, that a switch to another vendor might seem unlikely: “They build up these big facilities and there’s no way someone is going to pull the plug and change it.”
City Council President Ben Stuckart said his priorities for the next Comcast franchise agreement will include expansion of internet service to low-income people. “To me it’s more about getting that access, rather than the guy who’s hogging all the bandwidth.”
Comcast’s new pricing scheme, Stuckart said, only will affect “internet hogs that are sucking up the bandwidth.”
To the extent access for low-income people becomes an issue, Comcast already has something to offer, according to its spokesman, Neary. Its “Internet Essentials” program offers internet service for $9.95 a month to homes with at least one child who qualifies for the national school lunch program.
Stuckart, however, says he has more in mind and is looking for models in other cities that extend access to low-income neighborhoods and use public libraries or community centers to provide free internet service and training. He noted that the city of Spokane already installs empty internet conduit below ground whenever streets are repaved, as a way of preparing for a better-wired future.
Like Stuckart, the Federal Communication Commission describes access to the internet as essential to modern society. President Obama and the FCC have approved an “open internet” policy – also known as “net neutrality.” The FCC’s open internet rules prohibit an earlier industry move toward bandwidth throttling for those who pay less, combined with “fast lanes” for those who pay more. Instead, the FCC contends openness, with transparent pricing, will encourage uninhibited innovation.
But even though the “open” policy blocked the industry from charging more for higher speed, it appears that the policy opened the door for the industry to charge, instead, on the basis of volume as technology drives usage ever higher.
Some communities do not rely on Comcast. Another leading vendor in the Inland Northwest is Spectrum Time Warner, which provides cable internet service to areas including Pullman and Coeur d’Alene. Spectrum does not impose usage-based fees, according to its website.
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