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The internet has gotten a lot faster since 2008, so why is Comcast's data limit so low?

Joe Raedle

In some parts of the country, if you're a Comcast customer and you consume more than 300 GB of bandwidth in a month, Comcast will ask you to pay extra for the additional bandwidth. Many people call this a "data cap," but the term has become somewhat toxic in technology circles. So as Ars Technica reports, Comcast has been trying to convince people to use euphemisms like "flexible data consumption plan" instead.

Playing this kind of semantic game isn't going to win Comcast many friends. But I think it does help to distract attention from the larger problem with Comcast's "flexible data consumption plan" policy.

The policy was first instituted in 2008 with a limit of 250 GB per month. At the time, with Netflix streaming in its infancy, that was considered a huge amount of bandwidth. Comcast portrayed it as an effort to crack down on the worst abusers of its network. In 2012, Comcast announced it was raising the limit — to 300 GB per month.

As I pointed out at the time, it's hard to imagine the average technology company trumpeting a 20 percent performance increase after 4 years with zero progress. Most technology products show dramatic improvements year after year. But progress on Comcast's network has been agonizingly slow.

And it's not like the technology doesn't exist to provide Comcast customers with more bandwidth. Since 2008, we've seen a dramatic increase in the number of cities with super-fast 1 Gbps fiber optic service — 20 times faster than Comcast's premium "Blast" service. Meanwhile, the cost of long-haul internet service has plummeted.

bandwidth_costs

When an ISP such as Comcast can't reach another network directly, it pays a third party to carry data to and from the network. As this chart shows, the cost of this "transit" service fell by a factor of 15 between 2008 and 2013.

Comcast has to buy transit in order to provide its customers with access to the entire internet. But more important, transit service is a helpful proxy for the falling cost of network connectivity more generally. The transit market is highly competitive, with dozens of companies offering service in direct competition. If the residential broadband market were this competitive, we would likely see dramatic improvements there too. Certainly, the per-megabit cost of broadband service should improve faster than 20 percent over 6 years.

So what's going on? It's hard to know for sure. But it's worth noting that there aren't many applications capable of generating enough data to hit Comcast's current 300 GB limit. By far the most popular is HD video streaming services such as Netflix — which happens to compete with Comcast's own lucrative paid television service.

And the data caps aren't the only Comcast strategy that happens to hamstring large video streaming services. This spring, Comcast used hardball tactics to force Netflix to pay Comcast to deliver videos Comcast's own customers had asked for. This kind of toll makes it more difficult for Netflix to undercut Comcast's pay TV service on price.

Comcast insists that both measures are simply designed to make heavy users of its network pay their fair share. But if that's true, why are the limits practically the same in 2014 as they were in 2008?

Disclosure: Comcast Ventures is an investor in Vox Media, the parent company of Vox.com.