Comcast brings back the data caps, will they work or drive high value customers away?

Recently, Comcast announced that they would be bringing back the data caps to all customers in 2021. That’s not the kind of throwback that most people celebrate. In fact, it makes me all the more content that switched over to Verizon FiOs with unlimited data over the summer while also finally cutting the video cord.

With the COVID-19 pandemic, more people are home streaming video, video conferencing, online gaming and generally consuming more broadband. NCTA estimates that downstream usage has grown 30% since 3/1 while upstream usage has grown by almost 50%. If that is the case, maybe Comcast justifies the increase on the based of increased demand on infrastructure, although the NCTA Covid Dashboard (https://www.ncta.com/COVIDdashboard) also states that “provider backbone networks are showing no signs of congestions”. If so, is this really the time to reintroduce caps? People generally complain about rising cable prices and this change risks bad PR while the country is suffering under the COVID pandemic.

To see how this would impact me, I looked at the last 4 months of my own household consumption. I know that pre cord cutting and pre covid that we consumed 500-600 GB Currently, my household is using 1.6-1.7TB a month. Currently, all of our video is over the top, my wife and I are on video calls most of the day, the kids are remote learning (every other week) on videoconferences 6-8 hours a day and my son spends a lot of time on XBOX live after school. My top 7 devices (of 61 devices currently online) account for roughly 80% of December usage to date are as follows:

– Fire TV Cube in the family room ~400 GB (24% of usage)

– Fire TV in my office ~390 GB (23% of usage)

– My MacBook Pro ~205 GB (12%)

– Son’s iPhone ~130 GB (8%)

– Xbox (gaming only) ~90 GB (6%)

– Daughter’s iPhone ~80GB (4%)

– Fire Stick TV Bedroom ~73 GB (4%)

Comcast has stated that they believe that the 1.2 TB cap will only impact the top 5% of households with an additional $10/50GB overage up to a maximum of $100/month. I cannot imagine that we are an outlier at 1.6-1.7 TB of usage a month. I believe that we would be the norm for the 25% of HHs that have cut the cord combined with the new reality of remote work and school. I pay $59.99/month for my ~ 1GB symmetrical FiOS connection with UNLIMITED data. Just the $100 penalty from Comcast would now cost me $40/month more than my total bill today. Including the underlying $79.99 300 MB Comcast connection that I had before, the price comparison would be $59.99 vs $179.99. I assume that the high end customers, the ones that Comcast wants to keep, will not appreciate the new caps. This move could push them over the edge to FiOS, Google Fiber or any other competitor. I understand that this may be a move to offset declining video revenue due to cord cutting, but it feels like the impact will be more negative in terms of churn and negative PR than top line or margin growth.