Comcast Delays Web-Use Fees for Northeast U.S. After Outcry

(Bloomberg) -- Comcast Corp. will delay a new fee on heavy internet users in the Northeastern U.S. following criticism of plans to expand the controversial strategy during the pandemic.

Comcast intended to impose extra fees for heavy internet use on customers in about a dozen markets starting in May, including New York, New Jersey, Pennsylvania, Virginia and Washington. The Philadelphia-based company already charges such fees, called usage-based pricing, in other parts of the country.

But Comcast was criticized for raising prices at a time when millions of people need internet access to work and attend school from home. The outcry included the attorney general of its home state of Pennsylvania.

“We are providing customers in these Northeast markets with additional time to become familiar with the new plan,” said Comcast spokesman Joel Shadle.

Customers could start to see charges under the plan starting in August, Shadle said.

Comcast imposes extra fees for what it considers excessive data use, or more than 1.2 terabytes a month. That’s streaming about 500 hours of high-definition video, according to the company. Comcast said only a small share of customers exceed that limit.

How Much?

In markets where Comcast’s usage-based pricing already exists, customers who exceed the limit pay $10 more for additional increments of 50 gigabytes, with overage charges capped at $100 a month. Customers can pay $25 to $30 more each month for unlimited access. One terabyte equals about 1,000 gigabytes.

Internet service has been a bright spot for cable providers, especially during the pandemic, attracting new subscribers, boosting revenue and bolstering profit. That’s a big benefit at a time when pay-TV customers are dropping service for streaming. The companies have tried to frame the pricing strategy as a fairness issue, saying customers who only go online to check email shouldn’t pay as much as users who play high-definition video games or watch movies and TV for hours.

Some consumer groups say there’s no reason for the fees. “This is just arbitrarily capping users so you can charge them more,” Gigi Sohn, a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy in Washington, said in an interview.

AT&T Inc. and Cox Communications Inc. also charge extra fees for heavy home internet use. Verizon Communications Inc. doesn’t. A Cox spokesman said the company paused its levy for a time last year, then reinstated the surcharge while raising data limits 25% to 1.25 terabytes. AT&T spokesman Jim Greer said the majority of his company’s customers have no caps.

FCC Chief

Last month, President Joe Biden selected Democrat Jessica Rosenworcel, a longtime member of the Federal Commissions Commission, to temporarily lead the agency. She has pushed for federal subsidies to provide internet access for students and low-income families.

The FCC, which regulates cable and telephone providers, declined to comment on Comcast’s plans, said Will Wiquist, a spokesman.

As a condition of its 2016 purchase of Time Warner Cable Inc. and Bright House Networks Inc., Charter Communications Inc. was barred from imposing such added internet fees on customers until May 2023.

Last year, Charter asked regulators for permission to be freed from that restriction starting in May. Last month, however, the company dropped its petition.

Post Covid

Regulators and private companies need to ensure that even after Covid-19 fades there is still a focus on getting broadband access to all families, according to Heather Gate, vice president of digital inclusion at Connected Nation, which advocates for broadband access, and a member of the FCC’s Advisory Committee on Diversity and Digital Empowerment. The most recent U.S. stimulus package included $3.2 billion for emergency broadband services to help families get connected, she said.

“I don’t think things will go back to the way they were,” Gate said. “We need to re-envision how our education platform needs to operate. It’s not acceptable for us as a society to expect a child in a low-income household to not have those education skills that my child has access to after school.”

Separately, Comcast said Tuesday it would boost the speed of its $9.95-a-month internet service for low-income customers, a program known as “Internet Essentials.”

The move came after student activists raised concerns that the previous speed it offered wasn’t fast enough to meet the demands of online learning. The company also said it plans to create more than 1,000 community centers that provide spaces for students to access free Wi-Fi by the end of this year.

©2021 Bloomberg L.P.