ISP Data Limits / by kevin murray

Internet Service Provider (ISP) data limits are becoming a fact of life.  Two out of the big three players now have data limits.  AT&T's monthly limit for their cheapest DSL plan is 150GB of data per month with an additional $10 charge per 50GB of overage after a couple of warnings for exceeding the limit.  Comcast's limit is 300GB of data with an additional $10 charge for overage but you will be allowed up to three courtesy notices within a twelve month period in which you won't be charged for that overage, if you do exceed the limit your penalty for doing so is an additional $10 charge per 50GB of overage per month.  Both plans are subject to change, but the die has already been cast, and data limitations by ISPs are something that is here to stay.


Ostensibly the reason for the data limitations is to crack down on the data hogs and as always, the ISPs try to make it crystal clear that it's only because of a few miscreants that they are forced to provide data limits of our usage but that statement is nothing but a convenient smokescreen.  The fact of the matter is that entities such as Netflix, Hulu, and people that download data from torrents are getting a free ride on the ISPs' back and they mean to put a stop to it. 


In only a few short years, Netflix' internet subscription customers has surpassed HBO, as shown by Netflix' most recent quarter of 2013 in which they now have 29.2 million U.S. streaming video subscribers, which noses ahead of HBOs' subscriber base of approximately 29 million as of year-end 2012.  To get a perspective of Netflix's growth, in the 3rd quarter of 2012 their internet subscription base was a mere 21.7 million, so it is quite clear that the lead of Netflix v. HBO will continue to widen.


But within Netflix there is a crucial business flaw, they are at the mercy of ISPs.  Should that spigot be slowed down in any way or the cost to the consumer rise appreciably, this will impact their business model and their bottom line.  With Netflix having a market cap of approximately $20 billion they are too large for any of the ISPs to gobble up, even if the FTC was to give the merger a green light.  Instead the ISPs will fight back by controlling the amount of data that a household can utilize within a given month.  The ISPs will start high, as they have done, but this will be lowered, manipulated and reformulated.  How difficult is it to imagine that like the proverbial highway that we utilize to go to and from work each day that ISPs will begin to charge higher or lower data rates depending upon what time of day it is and therefore data streamed at primetime hours will count more heavily against you. Additionally, buried within their terms and conditions will be a new clause stipulating that any content that is streamed and under the umbrella from the ISP itself (e.g. xfinity streampix from Comcast) will not be counted against the data limit or perhaps will be significantly discounted because the ISP will state that this data is far easier to stream and therefore you can never exceed the limit of it.


The ISP controls the gateway to your home viewing entertainment received via the internet.  In their world there is good data and there is bad data.  Good data is data that they can make money on and keeps you within the family, bad data is everything else.