Your 4K Netflix Streaming Is on a Collision Course With Your ISP's Data Caps
High-resolution video streaming is on the rise, but data caps could mean bigger bills for customers.
Household bandwidth consumption is soaring thanks to video streaming, new data suggests, and American consumers are about to run face-first into broadband usage limits and overage fees that critics say are unnecessary and anti-competitive.
Cisco’s 2018 Visual Networking Index (VNI)—an annual study that tracks overall internet bandwidth consumption to identify future trends—predicts that global IP traffic is expected to reach 396 exabytes per month by 2022. Cisco’s report claims that’s more traffic than has crossed global networks throughout the entire history of the internet thus far.
The majority of this data growth is video; Cisco found that 75 percent of global internet traffic was video last year, up from 63 percent just two years earlier. Cisco says this number could climb to 82 percent in 2022, with 22 percent of overall video consumption coming from bandwidth-intensive 4K streaming.
The problem: As monthly household bandwidth consumption soars courtesy of 4K Netflix streaming and other new services, many broadband users are likely to run into usage caps and overage fees that jack up their monthly rates.
Critics have long argued that broadband usage caps are arbitrary and unnecessary network limits imposed simply to increase revenues and punish users who cancel a telecom operator’s traditional pay TV service, but retain their broadband services.
“Usage caps on wired broadband connections have always been a joke,” Matt Wood, Policy Director for consumer advocacy group Free Press told Motherboard over email. “ISPs have admitted repeatedly that they do not address any real network management problem, and they couldn't.”
ISPs used to insist that such limits were necessary to manage network capacity. Over the years however, numerous industry admissions—as well as Comcast documents leaked on Reddit—have shown that’s simply not true.
In the years since, ISPs have backed off providing much in the way of justification for the unpopular restrictions. Comcast’s website, for example, now simply tells users such limits are “based on a principle of fairness.”
Wood notes that “fairness” doesn’t have much to do with it. Internet providers are simply keen to cash in on the rise of streaming video, he told me. And while many ISPs have bumped these limits to a terabyte per month in recent years in response to public backlash, even these expanded limits are starting to look a little dated in the 4K streaming era.
Cisco’s analysis found that the number of households that consume one terabyte or more of data per month more than doubled between 2016 and 2017, and cord cutters consume roughly 72 percent more bandwidth per month than the average household.
Comcast didn’t respond to Motherboard’s request for comment on whether the company plans to relax usage limits to accommodate this growth. As it stands, Comcast imposes a terabyte usage cap on all of its service areas except the Northeast, where broadband competition is slightly more intense. Users can avoid such limits entirely if they pay an additional $50 per month.
Americans already pay some of the highest rates for broadband in the developed world thanks to limited competition. Given there’s no real technical justification for limits on data usage, critics say they amount to little more than price gouging of captive consumers.
Phillip Dampier, a consumer advocate who has spent a decade fighting against such limits via his website Stop the Cap, told Motherboard that users getting caught in this tightening net of metered usage was the entire point. Companies like Comcast—which are both internet and cable TV providers—try to simultaneously punish and profit from users that choose to cancel traditional TV services, he said.
“The arbitrary one terabyte usage cap some companies impose always comes with the claim it will impact almost nobody, which makes you wonder why a company needs to have a cap in the first place,” Dampier said.
Comcast continues to bleed cable customers frustrated by the soaring costs, terrible customer service, and bogus fees that plague its pay TV service. And while those users can cut the cable TV cord, they’re often still stuck with Comcast for internet service thanks to the company’s growing monopoly over fixed-line broadband.
By imposing arbitrary caps on those users, Comcast can recoup any lost TV revenues. Comcast also allows its own content and services freely bypass these limits (a practice known as zero rating), while still counting streaming alternatives like Netflix against a user’s monthly bandwidth allotment—a handy anti-competitive weapon in the streaming wars to come, Dampier notes.
“As cord-cutting takes the country by storm, the same companies that have profited handsomely selling you 200-channel TV packages you don't want or need will effectively claw back any savings from watching TV online instead,” Dampier said.
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