First, Internet fans, the good news: The nation's two largest broadband providers are greatly increasing how much data you can download at home before incurring steep fees. The bad news? Because of their adoption of data caps, you'll still have to count every gigabyte you consume.
Comcast (CMCSA) on Wednesday officially raised the cap on its home broadband service to allow people to download a full 1 terabyte of data of content per month (1,000 gigabytes equals a terabyte). That's a lot of content, amounting to roughly 400 hours of high-definition movie streaming.
For subscribers who exceed the cap, Comcast, the country's biggest cable and broadband provider with nearly 24 million users, will charge $10 for every 50 gigabytes they go over that limit; alternatively, they can pay an additional $50 for an "unlimited" plan.
Comcast's new policy, originally announced in April, follows a move last week by AT&T (T) to start enforcing new data caps. Ma Bell, which provides broadband to about 15.8 million homes, offers a tiered plan based on the Internet speed a customer pays for. All of its DSL customers are stuck with a 150 GB per month cap, while U-Verse customers get more options.
The upshot: It's becoming apparent that you'll soon buy your wireline broadband much like you buy your cell phone data.
Will this affect me?
AT&T caps broadband to subscribers in all of its territories, while Comcast only does it in specific cities. Comcat's cap will affect about 14 percent of its users, most of whom are located in the Southeast and central states. It also will implement its terabyte caps in Fresno, California, Arizona and parts of Maine. (A complete list of areas where the cap is in place can be found here.)
Before the new cap was implemented, Comcast subscribers were bumping up against it. Comcast said earlier this year that about 9 percent of its users were hitting the 300 GB per month cap. Under the new plan, less than 1 percent should hit the cap, said Charlie Douglas, a Comcast spokesman. A typical Comcast customers uses about 60 GB per month.
Why are Comcast and AT&T enforcing data caps?
Data caps are about two things for Internet service providers: boosting revenue and curbing online video streaming. When Comcast first implemented its data cap in 2008, it claimed that it was to help manage its network. It has since changed its tune, arguing that this is really about fairness and that heavy data users should pay more for content.
But most experts agree limiting broadband buffet is more about making it more expensive to get television over the Internet, as well as an effort to help broadband provder offset the lost revenue from their triple-play bundles.
As more people cut the cord, the total cost they pay to a cable or telecom provider drops. But with overage fees for heavy users, the total cost a customer pays could end up in the same ballpark.
Where is the FCC on this issue?
The agency, which regulates Internet service providers, started looking into the impact of caps years after they were already being used. And so far regulators have remained mostly on the sidelines. But before approving the merger between Charter (CHTR) and Time Warner Cable in May, it stipulated that they could not set a data cap for seven years.
Since neither company used data caps, this seemed a little hollow, but it still sent a clear message to the others in the space. Two days days after the FCC announced the data cap condition on the Charter-TWC deal, Comcast announced that it was raising its data caps.
How much content do I really use?
Both AT&T and Comcast provide a portal where you can check your usage. Some Internet routers can also track your data use. A good general rule to follow is that every hour of high-definition TV is equivalent to about 1.5 to 3 GB. With 4K TV, every hour is about 7 GB, according to Netflix. Email, music and web surfing consume much less data.
A 2015 report by the FCC noted that monthly data consumption (including both uploads and downloads) on fixed broadband networks in North America averaged 44.7 GB in the first half of 2013 and 51.4 GB for the first half of 2014. As more people cut the cord, download video games and livestream video, that number will rise. That's why it was important that Comcast and AT&T (which had a 250 GB per month cap) raise their caps.
What happens if I go over the data cap?
Comcast allows customers to get alerts via email or text when they reach 50 percent, 60 percent, 70 percent, 80 percent, 90 percent, 100 percent, 110 percent and 125 percent for their data limit. Then you get an option to purchase an "unlimited" plan for $50 a month or an option to purchase buckets of 50 GB for $10 each. Comcast caps the maximum monthly charges for additional buckets at $200.
AT&T will also notify customers before they hit the cap, and charges $30 for an unlimited option. It also caps pricing at $200 per month. Only customers who don't have the AT&T video service are subject to the cap.