Everyone needs to calm down about Internet Caps

Comcast’s decision to implement a 250gb data cap on users continues to drive a ton of angst among American early adopters who believe the sky is falling. The latest round comes from Roku, makers of the Netflix box, who claim that they aren’t afraid of caps, but with others saying how much it will hurt their business.

There is a case in terms of limiting future growth in online content delivery; as we switch away from heritage media, the more content we consume online, the more data we use. But that time isn’t now, at least for the vast majority of users, because even with streaming content, most will never hit the 250gb cap. There are some exceptions, but we’ll get to that in a moment.

Living with a cap

The above shot is from my iiNet toolbox showing my volume usage from August 28, the starting day for the monthly calculation of my use cap, which is currently 65GB peak (noon-2am) and 65GB off-peak (2am-noon). 11 full days into the month, I’ve used 10gb peak, just over 2gb off peak, and 3gb in the free zone.

Now perhaps I haven’t downloaded a lot this month, so these figures may not be completely typical, but they are close enough, and my biggest month so far totaled 50gb. Consider the usage scenario: we rarely watch broadcast television, and on a typical night will stream one to two television programs. Other times we might rent a movie or stream some podcasts via our Apple TV, and if you note the freezone figure for the 6th, we purchased 300 on iTunes (it wasn’t available for rent) and watched it, resulting in a 1.5gb figure for that day. I’m also in front of a computer at home all day, and I regularly download content, and at least three times a week I’m playing online Poker as well, so there is a gaming component. Notably these figures include uploads as well, although it’s not clear whether the Comcast cap counts uploads. Our house has more internet enabled devices than people: three computers in regular use, Apple TV, two iPhones, and a Chumby used day in, day out.

Lets presume the average Roku box user watches one video every night. At 30 days in a month x 1.5gb per video, total use will be 45gb for the month. Lets presume that Netflix isn’t as efficient as iTunes in movie delivery, and each movie is 3gb. Lets presume you’re an addict, and you watch two movies every day. Still only 180gb in a heavy use, high bandwidth scenario, with 70gb to spare.

Comcast states that only 0.1% of their users use in excess of 250gb a month, so 99.9% of users will never have an issue, and that includes many early adopters and those working in the tech/ web space. I could try harder to use more bandwidth, but never being offline is all I can manage, at least for now.

Market Forces

Lets presume that with the rise of digital content delivery, usage rates increase, and more people get closer to the cap, or exceed it. Demand usually results in supply, and presuming that 250gb is the end of the matter ignores alternative ISP’s or distribution deals.

In Australia, as you’ll note in the image above, ISP’s do deals with content providers so that downloads aren’t counted towards a cap. In my case, the iiNet Freezone includes content from iTunes, and a number of other services. iiNet even offers a variety of internet radio stations for free, so when I wake up to the sound of 977 The 80’s Channel on my Chumby of a morning, it’s via a local iiNet stream of the station that doesn’t count towards my cap.

Providers such as Apple, Netflix and others will cut deals in the United States in the same way they have in Australia, both as a marketing tool and as a way to overcome any cap fears that may slow usage rates and consumer uptake. ISP’s like these deals as well, as offering unmetered content from large players is a selling point.

The Exceptions

There are of course some that will lose out under these caps: extreme high end users, large families or group homes, heavy BitTorrent users, and addicted online game players. Some have a reasonable case to complain, but others, for example those who use a residential connection to run a business where many people use that connection every day, or even use the connection as a web server (remarkably some people still do) need to accept up to the fact that if they want unlimited bandwidth, they should pay for it. Comcast business plans are not currently capped, so there are alternatives, even if they do cost more.

Conclusion

I don’t like caps, and having been on the wrong end of usage before and having my connection shaped, I’d consider switching to an unlimited plan tomorrow if I had the choice. Caps do have the potential of constraining growth in digital media delivery in the future, replacing a free market with one of deals and artificial supply constraints. And yet, for the negatives, the sky isn’t falling, it’s not the end of the world, and most Comcast users will never notice the introduction of a cap. It’s not unreasonable that people pay more relative to the amount of data they consume, and that heavy users should not be subsidized by light users. The market will respond, the drive towards more efficient delivery of digital content will increase, and we’ll still be streaming and downloading content tomorrow and into the future.