A tiny cable company serving communities around the Blue Mountain in eastern Pennsylvania has a big appetite for rationing Internet usage by imposing data caps and overlimit fees on their 170,000 customers.

Effective Sept. 1, Blue Ridge dropped off-peak unlimited use service and imposed a 24-hour rationing plan on its customers, including a familiar overlimit fee of $10 per 50GB of excess usage — the same fee created by AT&T and adopted by several other cable and phone companies.

Customers on the lowest priced plans are most at risk of encountering overlimit fees, which most providers claim are designed to make heavy users pay more for access. In the past, the company maintained rarely enforced “soft caps” and off-peak unlimited usage starting at 5pm. The “hard caps” arrived Sept. 1 with claims the company generously doubled the allowance for some customers, without mentioning it also eliminated off-peak unlimited usage. In terms of “fairness,” the heaviest users signed up to the fastest speed tiers get the most generous allowances while those at lower-price tiers are most likely to encounter an overlimit penalty fee:

• Web Surfer $42.95 (1.5Mbps Download/384kbps Upload) – 150GB per month (no change)
• G5 $52.95 (5Mbps/384kbps) – 300GB per month (was 250GB)
• G10 $57.95 (10Mbps/800kbps) – 400GB per month (was 250GB)
• G15 $67.95  (15/2Mbps) – 500GB per month (was 250GB)
• Dream 60 $84.95 (60/3Mbps) – 600GB per month (was 250GB)
• Dream 100 $124.95 (100/5Mbps) – 700GB per month (was 250GB)

Blue Ridge Communications is headquartered in Palmerton, Pa.

To avoid a higher bill, customers will have to check a company-sponsored, unverified usage meter on Blue Ridge’s website and be ready to upgrade to a more costly Internet plan. Blue Ridge customers already pay substantially more for Internet service than other customers pay in the region. A Comcast subscriber in eastern Pennsylvania now pays $29.99 a month for the first 12 months of 25Mbps service, after which the price increases to as much as $66.95 a month. A less expensive 6Mbps tier costs $49.95 from Comcast, and a much faster 150Mbps tier is also available for $78.95, $46 less than what Blue Ridge charges for service that is 50Mbps slower.

“It’s no dream at 60 or 100Mbps, it’s a straight up gouging nightmare wrapped in greed and lies,” says Stop the Cap! reader Thomas, who lives in Palmerton and calls Blue Ridge’s parent company a local media and entertainment dictatorship. “My friends and relatives are stunned when I tell them one local company controls cable, telephone, wireless, the newspaper and the local news channel. It’s all Pencor through and through.”

Pencor Services, Inc., (Pennsylvania ENtertainment, COmmunications and Recreation) holds a unique position in eastern Pennsylvania. The rural character of the region has allowed Pencor to own and operate a large number of media and telecommunications companies. Pencor owns both Blue Ridge Communications — the cable operator and two local phone companies — Palmerton Telephone and the Blue Ridge Telephone Company. DSL service is offered, but it is “powered by” PenTeleData, another Pencor-owned operation. Wireless service is provided by Pencor-owned Pencor Wireless. In certain other markets, phone companies like Frontier Communications offer some competition, mostly low-speed DSL.

Pencor and its businesses have a substantial presence throughout the Blue Mountain region.

Residents get much of their local news from BRC TV-13, the local news channel on the Blue Ridge system serving Carbon, Monroe, Wayne & Pike counties and parts of Lehigh, Schuylkill, Northampton and Berks counties. BRC TV-11 provides local news on the Blue Ridge system serving Northern Lancaster County. Both stations are also owned by Pencor. So is the Lehigh Valley Press and the Times News newspaper operations.

A Facebook group has been organized to fight Blue Ridge over its new data caps.

Coverage of the usage cap imposition and customer reaction to it, best characterized as hostile, came from media not owned by Pencor.

Milfordnow! reported “when analyzing similar cap programs that have been implemented by other cable companies, it is apparent that bills may be rising substantially for heavy users.”

The cable company countered it expected only 3% of customers to affected by the new caps, which has some customers wondering why they need them at all.

“You have to wonder if caps affect almost nobody, why do companies spend so much time and energy imposing them,” said Thomas.

“Everything from downloads to YouTube, Netflix and even online gaming count against their new 24-hour cap,” Milford resident John Ferry III told the Pocono Record, reporting his latest bill was about $46 over previous charges. “They are telling people they have doubled the cap, but this is not true. By removing the off-peak time, which was essentially a free period, there is no math that makes it double.”

Blue Ridge customers have begun to organize a pushback against the data caps through a new Stop Blue Ridge Cable Data Caps Facebook page.

Phillip Dampier: A cable trade publication is lecturing its readership on better broadband the industry spent years claiming nobody wanted or needed.

Remember the good old days when cable and phone companies told you there was no demand for faster Internet speeds when 6Mbps from the phone company was all you and your family really needed?

Those days are apparently over.

Multichannel News, the largest trade publication for cable industry executives, warns cable companies gigabit broadband speeds are right around the corner and the technological transformation that will unleash has been constrained for far too long.

Say what?

Proving our theory that those loudest about dismissing the need for faster Internet speeds are the least equipped to deliver them, the forthcoming arrival of DOCSIS 3.1 technology and decreasing costs to deploy fiber optics will allow cable providers to partially meet the gigabit speed challenge, at least on the downstream. Before DOCSIS 3.1, consumers didn’t “need those speeds.” Now companies like Comcast claim it isn’t important what consumers need today — it’s where the world is headed tomorrow.

Comcast 2013:

Comcast executive vice president David L. Cohen writes that the allure of Google Fiber’s gigabit service doesn’t match the needs or capabilities of online Americans.

“For some, the discussion about the broadband Internet seems to begin and end on the issue of ‘gigabit’ access,” Cohen says, in a nod to Google Fiber. “The issue with such speed is really more about demand than supply. Our business customers can already order 10-gig connections. Most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available to the home.” Essentially, Cohen argues that even if Comcast were to deliver web service as fast as Google Fiber’s 1,000Mbps downloads and uploads, most customers wouldn’t be able to get those speeds because they’ve got the wrong equipment at home.

Comcast 2015:

“We’ve consistently offered the most speeds to the most homes, but with the current pace of tech innovation, sometimes you need to go to where the world is headed and not focus on where it is today.”

“The next great Internet innovation is only an idea away, and we want to help customers push the boundaries of what the Internet can do and do our part to inspire developers to think about what’s possible in a multi-gigabit future.  So, next month we will introduce Gigabit Pro, a new residential Internet service that offers symmetrical, 2-Gigabits-per-second (Gbps) speeds over fiber – at least double what anyone else provides.”

Nelson (Image: Multichannel News)

Rich Nelson’s guest column in Multichannel News makes it clear American broadband is behind the times. The senior vice president of marketing, broadband & connectivity at Broadcom Corporation says the average U.S. Internet connection of 11.5Mbps “is no longer enough” to support multiple family members streaming over-the-top video content, cloud storage, sharing high-resolution images, interactive online gaming and more.

Nelson credits Google Fiber with lighting a fire under providers to reconsider broadband speeds.

“Google’s Fiber program may have been the spark to light the fuse — Gigabit services have fostered healthy competition among Internet and telecommunications providers, who are now in a position to consider not ‘if’ but ‘when and how’ to deploy Gigabit broadband in order to meet consumer’s perceived ‘need for speed’ and maintain their competitive edge,” Nelson wrote.

But the greatest bottleneck to speed advances is spending money to pay for them. Verizon FiOS was one of the most extravagant network upgrades in years among large American telecom companies and the company was savaged by Wall Street for doing it. Although AT&T got less heat because its U-verse development costs were lower, most analysts still instinctively frown when a company proposes spending billions on network upgrades.

Customer demand for faster broadband is apparent as providers boost Internet speeds.

The advent of DOCSIS 3.1 — the next generation of cable broadband technology — suggests a win-win-win for Wall Street, cable operators, and consumers. No streets will have to be torn up, no new fiber cables will have to be laid. Most providers will be able to exponentially boost Internet speeds by reallocating bandwidth formerly reserved for analog cable television channels to broadband. The more available bandwidth reserved for broadband, the faster the speeds a company can offer.

Many industry observers predict the cable line will eventually be 100% devoted to broadband, over which telephone, television and Internet access can be delivered just as Verizon does today with FiOS and AT&T manages with its U-verse service.

The benefits of gigabit speeds are not limited to faster Internet browsing however.

Nelson notes communities and municipalities are now using gigabit broadband speeds as a competitive tool selling homes and attracting new businesses to an area. According to a study from the Fiber to the Home (FTTH) Council, communities with widely available gigabit access have experienced a positive impact on economic activity — to the tune of more than $1.4 billion in GDP growth. Those bypassed or stuck in a broadband backwater are now at risk of losing digital economy jobs as businesses and entrepreneurs look elsewhere.

The gigabit broadband gap will increasingly impact the local economies of communities left behind with inadequate Internet speeds as app developers, content producers, and other innovative startups leverage gigabit broadband to market new products and services.

The Pew Research Center envisioned what the next generation of gigabit killer apps might look like. Those communities stuck on the slow lane will likely not have access to an entire generation of applications that simply will never work over DSL.

But before celebrating the fact your local cable company promises to deliver the speed the new apps will need, there is a skunk that threatens to ruin your ultra high speed future: usage-based pricing and caps.

At the same time DOCSIS 3.1 will save the cable industry billions on infrastructure upgrade costs, the price for moving data across the next generation of super high-capacity broadband networks will be lower than ever before. But cable operators are not planning to pass their savings on to you. In fact, broadband prices are rising, along with efforts to apply arbitrary usage limits or charge usage-based pricing. Both are counter-intuitive and unjustified. It would be like charging for a bag of sand in the Sahara Desert or handing a ration book to shoreline residents with coupons allowing them one glass of water each from Lake Ontario.

Cox plans to limit its gigabit customers to 2TB of usage a month. AT&T U-verse with GigaPower has a (currently unenforced) limit of 1TB a month, while Suddenlink thinks 550GB is more than enough for its gigabit customers. Comcast is market testing 300GB usage caps in several cities but strangely has no usage cap on its usage-gobbling gigabit plan. Why cap the customers least-equipped to run up usage into the ionosphere while giving gigabit customers a free pass? It doesn’t make much sense.

But then usage caps have never made sense or been justified on wired broadband networks and are questionable on some wireless ones as well.

Stop the Cap! began fighting against usage caps and usage pricing in the summer of 2008 when Frontier Communications proposed to limit its DSL customers to an ‘ample’ 5GB of usage per month. That’s right — 5GB. We predicted then that usage caps would become a growing problem in the United States. With a comfortable duopoly, providers could easily ration Internet access with the flimsiest of excuses to boost profits. Here is what we told the Associated Press seven years ago:

“This isn’t really an issue that’s just going to be about Frontier,” said Phillip Dampier, a Rochester-based technology writer who is campaigning to get Frontier to back off its plans. “Virtually every broadband provider has been suddenly discovering that there’s this so-called ‘bandwidth crisis’ going on in the United States.”

That year, Frontier claimed most of its 559,300 broadband subscribers consumed less than 1.5 gigabytes per month, so 5GB was generous. Frontier CEO Maggie Wilderotter trotted out the same excuses companies like Cox and Suddenlink are still using today to justify these pricing schemes: “The growth of traffic means the company has to invest millions in its network and infrastructure, threatening its profitability.”

Just one year later, Frontier spent $5.3 billion to acquire Verizon landline customers in around two dozen states, so apparently Internet usage growth did not hurt them financially after all. Frankly, usage growth never does. As we told the AP in 2008, the costs of network equipment and connecting to the wider Internet are falling. It still is.

“If they continue to make the necessary investments … there’s no reason they can’t keep up” with increasing customer traffic, we said at the time.

We are happy to report we won our battle with Frontier Communications and today the company even markets the fact their broadband service comes without usage caps. In many of Frontier’s rural service areas, they are the only Internet Service Provider available. Imagine the impact a 5GB usage cap would have had on customers trying to run a home-based business, have kids using the Internet to complete homework assignments, or rely on the Internet for video entertainment.

So why do some providers still try to ration Internet usage? To make more money of course. When the public believes the phony tales of network costs and traffic growth, the duped masses open their wallets and pay even more for what is already overpriced broadband service. Just check this chart produced by the BBC, based on data from the Organization for Economic Co‑operation and Development. Value for money is an alien concept to U.S. providers:

The usual method of combating pricing excess is robust competition. With a chasm-sized gap between fat profits and the real cost of the service, competitors usually lower the price to attract more customers. But the fewer competitors, the bigger the chance the marketplace will gravitate towards comfort-level pricing and avoid rocking the boat with a ruinous price war. It is one of the first principles of capitalism — charging what the market will bear. We’ve seen how well that works in the past 100+ years. Back in 2010, we found an uncomfortable similarity between broadband prices of today with the railroad pricing schemes of the 1800s. A handful of executives and shareholders reap the rewards of monopolistic pricing and pillage not only consumers but threaten local economies as well.

The abuses were so bad, Congress finally stepped in and authorized regulators to break up the railroad monopolies and regulate abusive pricing. We may be headed in the same direction with broadband. We do not advocate regulation for the sake of regulation. Competition is a much more efficient way to check abusive business practices. But where an effective monopoly or duopoly exists, competition alone will not help. Without consumer-conscious oversight, the forthcoming gigabit broadband revolution will be stalled by speed bumps and toll booths for the benefit of a few giant telecommunications corporations. That will allow other countries to once again leap ahead of the United States and Canada, just as they have done with Internet speeds, delivering superior service at a lower price.

China now ranks first in the world in terms of the total number of fiber to the home broadband subscribers. So far, it isn’t even close to the fastest broadband country because much of China still gets access to the Internet over DSL. The Chinese government considers that unacceptable. It sees the economic opportunities of widespread fiber broadband and has targeted the scrapping of every DSL Internet connection in favor of fiber optics by the end of 2017. As a result, with more than 200 million likely fiber customers, China will become the global leader in fiber infrastructure, fiber technology, and fiber development. What country will lose the most from that transition? The United States. Today, Corning produces 40% of the world’s optical fiber.

Global optical fiber capacity amounted to 13,000 tons in 2014, mainly concentrated in the United States, Japan and China (totaling as much as 85.2% of the world’s total), of which China already ranked first with a share of 39.8%. Besides a big producer of optical fiber, China is also a large consumer, demanding 6,639 tons in 2014, 60.9% of global demand. The figure is expected to increase to 7,144 tons in 2015. Before 2010, over 70% of China’s optical fiber was imported, primarily from the United States. This year, 72.6% of China’s optical fiber will be produced by Chinese companies, which are also exporting a growing amount of fiber around the world.

John Lively, principal analyst at LightCounting Market Research, predicts China could conquer the fiber market in just a few short years and become a global broadband leader, “exporting their broadband networking expertise and technology, just like it does with its energy and transportation programs.”

Meanwhile in the United States, customers will be arguing with Comcast about the accuracy of their usage meter in light of a 300GB usage cap and Frontier’s DSL customers will still be fighting to get speeds better than the 3-6Mbps they get today.

“Note: Enforcement of the 250GB data consumption threshold is currently suspended.” (Image: Houston Chronicle)

AT&T’s enforces usage caps with overlimit penalties on its slow speed DSL service while waiving overlimit fees for its higher speed U-verse Internet service.

In 2011, AT&T introduced a 150GB monthly data cap on its DSL customers and a 250GB cap on U-verse Internet access, promising an overlimit fee of $10 for each 50GB customers stray over their allowance. Since that time, although AT&T continues to claim all customers have a usage allowance, it only penalizes DSL customers with overlimit fees.

What makes one customer subject to a higher bill while another can use as much data as they like without penalty? Competition.

Stop the Cap! has found AT&T’s DSL customers are among those least favored by the phone company. Subjected to a data cap with penalty fees for exceeding the allowance is just one of the issues bothering customers like Sheila Rivers, who lives on Houston’s west side. Her Internet bill has gone up year after year no matter how much data she uses. Her phone line with DSL used to cost her around $45 a month. Last year, it increased to $65 and AT&T has now informed her they want another $10 a month, bringing her phone bill to almost $75 a month. As long as it hasn’t rained recently, she gets just under 6Mbps speeds from AT&T. This past spring her connection barely exceeded 2Mbps.

When Rivers complains about her bill, she is quickly offered U-verse at about half the price for faster speeds. She’d take advantage of the offer, except she can’t. AT&T’s engineers tell her there are “no more ports” open in her neighborhood at the moment.

That’s also true for Jim in downtown Chicago. He’s an AT&T DSL customer and not by choice. AT&T was supposed to upgrade his building to U-verse more than a year ago, but it still has not happened. Comcast has a record of delivering appallingly bad service in his building, judging from his neighbors who cannot stay connected to Comcast’s Internet service. That leaves him with AT&T DSL with that 150GB usage cap. He regularly pays $30 in overlimit fees every month for exceeding it.

“AT&T won’t budge on waiving the extra fees on DSL, unless I agree to sign up for U-verse and then they will issue me a courtesy credit,” Jim tells Stop the Cap! “I keep telling them ‘yes, please’ and around a day later I receive another call canceling my order because U-verse is not available in the building. It’s clear the DSL usage cap is supposed to convince people to switch to U-verse for a bigger allowance.”

(Image: Houston Chronicle)

Except AT&T has not enforced its 250GB usage allowance with overlimit fees anywhere we could find. In fact, customers tell us they are specifically exempted from any U-verse caps based on a message they see on AT&T’s usage measurement tool:

Note: Enforcement of the 250GB data consumption threshold is currently suspended.

This week, the Houston Chronicle’s TechBlog reports usage caps for U-verse have been suspended across the city of Houston. AT&T’s current reasoning for harshly enforcing caps on its DSL service while not enforcing them at all for U-verse customers was murky:

“We’re educating our customers on Internet usage, and we inform them if their usage might affect their monthly bill.”

So what is different about AT&T’s lower speed DSL service that presumably generates less traffic than its higher speed U-verse counterpart?

The answer seems to be competition.

AT&T has aggressively upgraded many of their urban and suburban service areas to U-verse. That upgrade alone does not mean the end of DSL for customers in an upgraded area, but AT&T has clearly embarked on an effort to convince customers to abandon older DSL service in favor of U-verse. In most cases this is accomplished with promotional pricing, dramatically reducing the cost of U-verse and convincing customers sticking with DSL is an expensive mistake.

AT&T also faces cable competition in nearly 100% of their U-verse service areas — competition that has raised broadband speeds and cut prices for new customers. If the competition offers faster Internet speeds with no usage cap, toughing it out with AT&T U-verse may seem unwise. Enforcing that 250GB cap would likely drive a number of customers to the competition.

In contrast, more rural and outer suburban communities are less likely to have a cable competitor and much more likely to qualify only for DSL because AT&T has not upgraded those areas to U-verse. That leaves AT&T with a monopoly, where customers have no other choices for service. It is very easy to enforce usage caps in these areas.

“It doesn’t make any sense that AT&T would cap me to 150GB on my DSL line and charge me overlimit fees for using too much when my next door neighbor with U-verse can use the Internet 24/7 and never be asked to pay anything extra for doing it,” Rivers said. “It rubbed me wrong enough to call Comcast, where I was offered more than 10 times faster service with cable TV thrown in for $15 less than what AT&T has been charging me and no usage caps for now at least. I can’t stand Comcast but AT&T is worse.”

Rivers thinks AT&T is making a big mistake having usage caps at all.

“That one issue just cost them my business after eight years with them.”

Stopping Cox’s money party from getting started, if we can help it.

Stop the Cap! today formally declares war on Cox’s usage cap experiment in Cleveland, Ohio and will coordinate several protest actions to educate consumers about the true nature of usage-based billing and how they can effectively fight back against these types of Internet Overcharging schemes.

Time Warner Cable quickly learned it was deeply mistaken telling customers that a 40GB monthly usage allowance was more than 95% of customers would ever need when introducing a similar concept April 1, 2009 in test markets including Rochester, N.Y., Austin and San Antonio, Tex., and Greensboro, N.C. The company repeatedly suggested only about five percent of customers would ever exceed that cap.

Six years later, it is likely 95% of customers would be paying a higher broadband bill to cover applicable overlimit fees or be forced to upgrade to a more expensive plan to avoid them. Before Time Warner realized the errors of its way, it claimed with a straight face it was acceptable to charge customers $150 a month for the same unlimited broadband experience that used to cost $50.

Cox’s talking points for customers and the media frames usage caps as a fairness enforcement tool. It is a tired argument and lacks merit because nobody ever pays less for usage-capped broadband service. At best, you pay at least the same and risk new overlimit charges for exceeding an arbitrary usage allowance created out of thin air. At worst, you are forced by cost issues to downgrade service to a cheaper plan that comes with an even lower allowance and an even bigger risk of facing overlimit fees.

Industry trade journal Multichannel News, which covers the cable industry for the cable industry does not frame usage caps in the context of fairness. It’s all about the money.

“If you’re a cable operator, you might want to strike [with new usage caps] while the iron is hot,” said MoffettNathanson principal and senior analyst Craig Moffett, a Wall Street analyst and major proponent of investing in cable industry stocks.

Multichannel News warned operators they “must tread carefully in how they deliver the usage-based message.” Instead of getting away with punitive caps, Time Warner Cable had to “rethink” its definition of fairness, keeping prices the same for heavy users of bandwidth but offering discounts to customers whose usage was lighter. No money party for them.

So how did Cox frame its message in the pages of an industry trade journal to fellow members of the cable industry? Was it about fairness or collecting more of your money. You decide:

Customers will be notified of their data usage and any potential overages beginning in mid- June but won’t have to pay for overages until the October billing cycle, a Cox spokesman said. That gives customers the chance either to alter their usage or step up to a more data-intensive plan.   The additional charges serve as a temporary step-up plan for certain consumers, the spokesman said — they can keep their current level of service and pay the additional fee during months when usage spikes, like when their kids come home from college.

The Government Accounting Office, charged with studying the issue of data caps, found plenty to be concerned about. Consumers rightfully expressed fears about price increases and confusion over data consumption issues. In short, customers hate the kind of usage-based pricing proposed by Cox. It’s a rate hike wrapped in uncertainty and an important tool to discourage consumers from cutting their cable television package.

It’s also nakedly anti-competitive because Cox has conveniently exempted its television, home phone, and home security products from its usage cap. Subscribe to Cox home phone service? The cap does not apply. Use Ooma or Vonage? The cap does apply so talk fast. If a customer wants to use Cox’s Home Security service to monitor their home while away, they won’t eat away their usage cap. If they use ADT to do the same, Cox steals a portion of your usage allowance. Watch a favorite television show on Cox cable television and your usage allowance is unaffected. Watch it on Netflix and look out, another chunk is gone.

While Cox starts rationing your Internet usage, it isn’t lowering your price. A truly fair usage plan would offer customers a discount if they voluntarily agreed to limit their usage. But nothing about Cox’s rationing plan is fair. It’s compulsory, so customers looking for a worry-free unlimited plan are out of luck. It’s punitive, punishing customers for using a broadband connection they already paid good money to buy. It’s arbitrary — nobody asked customers what they wanted. It doesn’t even make sense. But it will make a lot of dollars for Cox.

Cox claims it only wants usage caps to help customers choose the “right plan.”

The right plan for Cox.

To escape Cox’s $10 overlimit fees, a customer will have to pay at least $10 more to buy a higher allowance plan — turning a service that costs less to offer than ever into an ever-more expensive necessity, with few competitive alternatives. Will Cox ever recommend customers downgrade to a cheaper plan? We don’t think so. Customers could easily pay $78-100+ for broadband service that used to cost $52-66.

Back in 2009, the same arguments against usage caps applied as they do today. Industry expert Dave Burstein made it clear usage caps were about one thing:

“Anybody who thinks that’s not an attempt to raise prices and keep competitive video off the network — I have a bridge to sell them, and it goes to Brooklyn,” Burstein said.

A well-placed source in Washington, D.C. with knowledge of the matter tells Stop the Cap! the Federal Communications Commission is prepared to take a hard look at the issue of Internet data caps and usage-based billing if a major cable operator like Comcast imposes usage allowances on its broadband customers nationwide.

Comcast introduced its usage cap market trial in Nashville, Tenn. in 2012 but gradually expanded it to include Huntsville and Mobile, Alabama; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville and Memphis, Tennessee; Charleston, South Carolina; and Tucson, Arizona.

“Two and a half-years is exceptionally long for a ‘market trial,’ and we expected Comcast would avoid creating an issue for regulators by drawing attention to the data cap issue during its attempted merger with Time Warner Cable,” said our source. “Now that the merger is off, there is growing expectation Comcast will make a decision about its ‘data usage plans’ soon.”

In most test markets, Comcast is limiting residential customers to 300GB of usage per month, after which an overlimit fee of $10 per 50GB applies. Despite that, Comcast’s forthcoming premium gigabit speed plans are exempt from usage caps, the company announced.

Comcast sustomers in market test cities have not been happy with the usage caps, some confronted with inaccurate usage measurement tools or “bill shock” after claiming to find surprise charges on their cable bill. One federal employee offered his own story of bill shock — $200 in overlimit fees on his April Comcast bill. The customer spent $70 a month on broadcast basic cable television and Comcast Internet service. As an almost cord-cutter, he could instead rely on one of several alternative online video providers like Netflix or Hulu, but watching video that did not come from Comcast’s cable TV package contributed to eating his monthly usage allowance and subjected him to hundreds of dollars in extra fees.

“I’ve reviewed [the] account to see and can confirm the charges are valid,” responded a Comcast representative who defended the company’s usage cap trials. “Please understand that we are not here to take advantage of customers. We are here to provide a great customer service experience.  After researching [the] account, at this time no matter what level of service you obtain, the Internet usage [allowance] will remain the same.”

To date, the Federal Communications Commission has left the issue of data caps and usage-based billing on the back burner, despite a Government Accounting Office report that found little justification for usage limits or compulsory usage allowances on broadband.

In 2012, former FCC chairman Julius Genachowski defended the practice, claiming it would bring lower prices to light users, spur “innovation” and enable consumer choice. But Comcast customers have found little, if any savings from Comcast’s so-called “data usage plans.” The only savings comes from enrollment in Comcast’s Flexible Data Option, which offers a $5 discount if a customer keeps usage under 5GB a month on just one plan — Comcast’s 3Mbps $39.95/mo Economy Plus tier.

“We don’t see much innovation coming from Comcast’s usage limit trials because Internet pricing continues to rise and the plans have the side effect of discouraging customers from using competing video providers, which can consume a lot of a customer’s usage allowance,” our source adds.

You are over our arbitrary usage limit!

As far as enabling consumer choice, Comcast’s own representative put the kibosh on that, unless a customer wants to pay higher Internet bills.

Net Neutrality and issues surrounding Title II have consumed much of the FCC’s attention in the residential broadband business during the first half of the Obama Administration’s second term. Usage billing and data caps are likely to become bigger issues during the second half if there is a decisive move towards compulsory usage limits and consumption billing by large operators.

“An operator the size of Comcast absolutely will draw scrutiny,” said our source. “If Comcast decides to impose its currently tested market trial plans on Comcast customers nationwide, the FCC will take a closer look. Under Title II, the agency is empowered to watch for attempts to circumvent Net Neutrality policies. Usage caps and charging additional fees to customers looking for an alternative to the cable television package will qualify, especially if Comcast continues to try to exempt itself.”

Cable industry officials have also become aware of the buzz surrounding usage caps and growing regulator concern. Some reportedly discussed the possibility of FCC intervention behind closed doors at the recent cable industry conference in Chicago. Multichannel News reported (sub. req.) cable industry executives increasingly fear federal officials will ban usage pricing for wired broadband service on competitive grounds. Online video competitors rely on large cable and phone companies to reach prospective customers, many that may think twice if usage allowances are imposed on consumer broadband accounts.