Thursday, May 17, 2012 at 6:11 pm.

Comcast is switching to usage-based Internet pricing

Shalini Ramachandran, writing for WSJ.com:

The cable operator plans to experiment with a couple of different ways to manage data use. Under one scenario, it will impose a data cap of 300 gigabytes and charge for additional use, likely $10 for each additional 50 gigabytes. A second possibility is to offer tiers of bandwidth, possibly starting with 300 gigabytes for those who subscribe to their lowest tier of Internet service. Customers who pay for premium tiers of broadband service will get higher thresholds.

The good news is that these caps are pretty high. Most people aren’t using anywhere close to 300 GB per month, and $10/50 GB is a pretty fair overage charge. (Much better than the cap and rates that Time Warner Cable was testing a few years ago.) The bad news, of course, is that everything good on the Internet — HD video, retina-resolution graphics, hi-res photos, HD gaming — will increasingly use more bandwidth tomorrow than today.

It’s been inevitable that we’d eventually shift to consumption-based Internet pricing, and it’s more fair. But this is bad news, in theory, for companies like Netflix and Apple, which will be pushing more HD video our way, which could end up costing us more money than we’d like to watch it.

(Btw, what a bizarre way for the WSJ to headline this story: “Comcast Abolishes 250-Gigabyte Cap”, and lead off with, “Good news for Comcast customers who like to stream lots of movies on Netflix”. No, this is bad news for customers who like to stream lots of movies. Eventually, it will cost them more money to do so than they spend today. The only winner here is Comcast. That’s ok, but let’s be accurate here.)