The average Comcast broadband customer now consumes over 200 GB of online data per month, an increase of 34% over just one year ago, according to Dave Watson, president and CEO of Comcast Cable Communications.

The increased usage accelerated during the last quarter of 2018, Watson told investors on a quarterly conference call.

What remains unchanged is Comcast’s data cap, which remains fixed at 1 TB per month for many customers. To avoid overlimit penalty fees of $10 for each additional 50 GB block of data consumed (up to $200 per month), Comcast is still pitching its unlimited data option — insurance against Comcast’s own overlimit penalties, which costs a growing number of customers an extra $50 a month.

Watson knows data usage over Comcast’s network is about to grow exponentially, mostly thanks to streaming video.

“I think that we start with the central view that streaming is going to happen, video over the internet is more friend than foe. and we wish every bit was our bit,” Watson told investors this morning. “If people consume more bits and video clearly does that, and 4K video does even more than that, that is the sweet spot of where this company is going to grow.”

Translation: We intend to make a killing on usage growth. Comcast can market you a faster internet package at a higher price, or as your usage approaches the data cap, scare you into buying overlimit insurance.

Remember that Comcast drops usage caps for some customers willing to rent their latest network gateway (available only in some areas at this time).

FCC Chairman Ajit Pai drinking from his oversized mug.

Last fall, FCC Chairman Ajit Pai trumpeted claims that as a result of his successful efforts to rid the United States of net neutrality, the days of reduced investment from the nation’s cable and phone companies were over.

“Since my first day on the job, this agency has been focused on cutting through the regulatory red tape and increasing broadband investment, most importantly in rural America where the digital divide remains all too real,” Pai said in October 2018. “Today’s report confirms that the FCC’s policies to promote broadband deployment are working. After internet service providers reduced new investments in 2015 and 2016 under the prior Administration’s regulatory approach [ie. net neutrality], broadband investment increased in 2017 by $1.5 billion over the previous year. That’s real progress for American consumers, and another step toward better, faster, and cheaper broadband for all Americans.”

Of course, his claims were false last fall. Top executives at the nation’s largest telecom companies have repeatedly admitted that net neutrality had little, if any bearing on their spending plans. Much of the increased spending was, in fact, attributable to:

• AT&T’s required expansion of its fiber to the home network to meet its obligations from the acquisition of DirecTV.
• Charter Communications’ committed upgrades as part of its acquisition of Time Warner Cable and Bright House Networks, including switching off analog video and deploying DOCSIS 3.1.
• Comcast’s increased spending on DOCSIS 3.1 and pushing fiber optics deeper into its hybrid fiber-coax network.
• Wireless carrier investment in further 4G LTE deployments and network densification.

In the past six months, many of these companies have signaled investors the days of big spending are over, despite the fact the so-called regulatory shackles of net neutrality and other reform measures have been abolished under the Republican-led FCC.

Today, Comcast delivered the ultimate truth blow to Pai’s worthless promises, showing the lowest investment intensity in years. In fact, Comcast reported a huge 19.4% drop in capital expenditures, while achieving a 40.1% EBITDA margin — a signal the company is earning even bigger profits than ever, while at the same time literally slashing investment. One thing that did not decrease was Comcast’s total free cash flow, which rose to $4.592 billion dollars in the last quarter.

Verizon Communications has indefinitely suspended plans to charge customers an extra $10 a month for access to Verizon’s extremely spotty and uneven 5G service, which launched earlier this month in Chicago and Minneapolis.

Early adopters were told Verizon would waive the extra $10 fee for the first three months of service. But after receiving mixed reviews about Verizon’s 5G performance and very limited coverage area after launch, Verizon decided to withdraw the charge until further notice.

“This is some of the blowback you get from being first” in offering smartphone 5G service, John Hodulik, an analyst at UBS Group AG, told the Wall Street Journal. “It didn’t make sense to charge people extra money for a service that they’re rarely going to use.”

AT&T’s CEO Randall Stephenson sent signals to shareholders AT&T was also considering charging a premium rate for customers upgrading to 5G technology in the next two or three years.

For the last several years, cable subscribers have lamented that the advertised price of service falls short of the real “out-the-door” cost shown on one’s monthly bill.

Charter Spectrum is one of the worst offenders, having avoided to mention in its advertising the spiraling-upwards “Broadcast TV Fee,” applied without exception to cable television customers’ bills.

The “Broadcast TV Fee,” (recently increased to $11.99 a month) is compulsory for cable TV customers and subject to change, regardless if you have a “rate guarantee” with Spectrum or not. The fee is the same for new and old customers, regardless of any promotion, and it has not been well-disclosed in Spectrum’s print and online advertising. Only customers subscribing to one of Spectrum’s new streaming TV packages will get a break. One of Spectrum’s most advertised stream-only packages applies a $5/mo Broadcast TV Fee, less than half of what Spectrum charges traditional cable TV customers for the same local stations.

As of this month, Spectrum.com now includes the fee on its price quote system for customers looking for an estimated cost of service. It adds enough to put the monthly cost of cable TV above $60 for new customers (including the rental cost of one, now-mandatory, HD-set top box), despite the fact Spectrum advertises a rate of $44.99/mo for the first year of service. This reality might further aggravate cord-cutting or “cable-TV nevers” from considering bundling television service with Spectrum.

For its part, Spectrum explains the fee represents “a fee by the owners of local broadcast ‘network-affiliated’ TV stations (affiliates of CBS, NBC, ABC, Fox, and so on). This fee enables Spectrum to continue to offer these channels for our customers.”

But in fact, it is just another cost of doing business. Cable programmers also charge similar fees, and some — notably ESPN — charge more than many local stations do for cable carriage. Cable operators are trying to make a political statement about the high cost of cable carriage of local TV stations that viewers can watch for free over-the-air. But they are also trying to hide the true cost of cable television, sensitive to the fact many customers are reaching their limit on bloated TV packages of hundreds of expensive channels that mostly go unwatched. Sticker shock can only worsen cord-cutting and cause more to rule out new subscriptions to cable television, especially as cable operators continue to raise the price of broadband internet service at the same time.

Philo is the latest streaming alternative to cable television consolidating its package offerings, ditching a 45-channel skinny bundle sold for $16 in favor of a single 58 channel package Philo will continue to sell for $20 a month.

Until May 6, customers can still subscribe and keep the ultra-slim $16 package, which includes:

Philo’s Discontinued 45 Channel Package $16/mo (still available for sign-up until 5/6/2019)

• A&E
• AMC
• Animal Planet
• AXS TV
• BBC America
• BBC World News
• BET
• Cheddar
• Cheddar Big News
• Cleo
• CMT
• Comedy Central
• Discovery Channel
• DIY Network
• Food Network
• FYI
• Game Show Network
• Hallmark Channel
• Hallmark Drama
• Hallmark Movies & Mysteries
• HGTV
• History
• IFC
• Investigation Discovery
• Lifetime
• Lifetime Movies
• MotorTrend
• MTV
• MTV Classic
• MTV2
• Nick Jr.
• Nickelodeon
• Oprah Winfrey Network
• Paramount Network
• PeopleTV
• Science Channel
• Sundance TV
• Tastemade
• TeenNick
• TLC
• Travel Channel
• TV Land
• VH1
• Viceland
• WE tv

Philo’s 58 Channel Package $20/mo (only package available to new customers starting 5/6/2019)

• All networks included in the 45 channel package, plus…
• American Heroes Channel
• Aspire
• BET Her
• Cooking Channel
• Destination America
• Discovery Family
• Discovery Life
• Law & Crime Trial Network
• Logo
• MTV Live
• Nick Toons
• Revolt
• UP TV

Philo CEO Andrew McCollum explained the changes:

“Starting May 6, we will move to only offering our $20 package — the 58 channel package — to new subscribers. For those who are already subscribed and anyone who subscribes before that date, nothing will change — you’ll continue to have the same package and same price options you have today.

At Philo, we care deeply about creating the best TV experience possible at an affordable price. Since we launched 18 months ago, most of the other companies in our space have raised their prices, in some cases multiple times. We didn’t want to do that. Still, when we looked at all of the costs of operating Philo — which increase over time — consolidating into a single $20 package was the best way for us to maintain the same offering we have today without raising prices or having to cut back in places we strive to excel, like our customer support.

Again, nothing is changing for anyone who has already subscribed by May 6 — you’ll keep the package you have and will continue to be able to switch between our two existing packages.”

McCollum also shed light on why services like Philo are moving away from a-la-carte or “theme pack” business models:

“There are a bunch of complicating factors, though. It’s tricky to do with the major network groups because the deals don’t generally allow it. There’s also an issue with making things more complicated.

Canada generally has something like this model (along with a mandated a la carte channel model, but nobody does it), and it’s actually super overwhelming. Some providers have 80+ different packages, and it’s impossible to just figure how to get what you want.

In general, I think choice is good, but I also think that bundling is good when the bundles make sense and are focused. The big issue is keeping things that some people want a lot, and that cost a lot, but other people don’t care about (e.g., sports) from driving up the cost for everyone. Trust me when I say that even if we could break things up more, the economics would probably net out where most people pay about the same but get fewer channels.

We are actually looking at making more content available through add-ons. I think it makes sense in a lot of cases, especially for premium/niche content.

It’s actually super overwhelming. Some providers have 80+ different packages, and it’s impossible to just figure how to get what you want.”