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Cable Technology Feature Article

December 08, 2010

Comcast Says It Has No Plans to Engage in Usage-based Broadband Pricing

By Tracey E. Schelmetic, TMCnet Contributor

Despite the fact that the practice comes with the FCC's blessing, Comcast President Neil Smit (News - Alert) has stated that the company does not plan to start charging broadband Internet subscribers by their level of bandwidth consumption, according to the Wall Street Journal. The practice, called “usage-based billing” for broadband service, was recently declared permissible by Federal Communications Commission Chairman Julius Genachowski.

Some other companies, notably AT&T (News - Alert), have already begun usage-based billing plans. Time Warner Cable recently tested the practice in some cable markets, but discontinued it due to voluminous subscriber complaints. The practice involves charging heavy bandwidth users more than subscribers who use less. Many telecom companies are viewing it as a good option once their subscriber base begins wider use of online streaming video from services such as Netflix. The companies are also preparing themselves for a day when the use of such services will begin to widely replace traditional cable TV service. As video content proliferates online, broadband network owners could face traffic issues and higher costs, and companies could also adopt usage-based billing to replace lost revenue from traditional video services.

At an investor conference held this week in New York City and hosted by UBS, Smit noted that Comcast (News - Alert) has set a monthly bandwidth cap for its broadband subscribers of 250 gigabytes and it has provided a meter to its customers so they can see how much bandwidth they use. A typical user consumes two to four gigabytes a month, so Smit says it's unlikely too many customers will come near that 250 gig cap. “We have a lot of room there,” he said. “Right now, we have no plans to activate usage-based pricing.”

Tracey Schelmetic is a contributing editor for TMCnet. To read more of Tracey's articles, please visit her columnist page.

Edited by Tammy Wolf