Demand [for broadband] is rising at a time when relevant supply is actually shrinking ... Elementary economics would suggest that greater pricing power is the inevitable outcome.
Craig Moffett Bernstein Research cable and satellite analyst.
At a time when broadband services in the U.S. are woefully lagging behind many nations -- in terms of speed, capacity and cost -- increasing numbers of carriers are imposing usage limits in an effort to curb bandwidth consumption of a small percentage of file sharers.
Under Comcast's amended policy, users who exceed 250 GB of data per month could get a call from the company asking them to cut down on their usage. Some ISPs argue that usage-based plans are the only effective way to manage network traffic as broadband demand increases and supply does not.
Compared to others' caps, Comcast's 250-GB cap is generous, potentially affecting less than 1 percent of its total user base. Meanwhile, Time Warner Cable is testing a tiered service in Texas with caps ranging from 5 GB to 40 GB; Canada's Rogers set its cap at 60 GB; and New York-based DSL provider Frontier recently announced a measly 5 GB cap.
Comcast's policy change was surely designed to make the company look like a neutral, non-discriminating service provider; not to mention, it could help smooth its relationship with the FCC. The idea is that Comcast won't pick on file sharers specifically, so long as they don't exceed the cap. While usage caps may help Comcast out of a jam, they're not the best long-term solution for users or for the market -- it could slow broadband adoption and stall innovation.
Here's a novel suggestion: If supply is a problem, why not increase capacity?
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