Why Comcast Is About To Lose Its Data Caps

Senior Contributor
02.17.14 7 Comments

Comcast, Wikimedia Foundation

One of the serious concerns about Comcast and Time Warner Cable merging is that Comcast will start imposing its data caps on Time Warner Cable users. Leaving aside that this merger is far from a done deal, it’s hard to see how Comcast is, in the long run, going to be able to sustain its capping policy. Here’s why Comcast data caps are going to be an endangered species.

Comcast Will Sacrifice Them To Regulators

The FCC may have been told it can’t impose specific net neutrality rules in court, but it’s not giving up anytime soon. And this merger essentially puts the FCC in the perfect position to make Comcast eat dirt and like it; no FCC approval, no merger.

And one thing that definitely raises the FCC’s ire is a merger giving customers crappier service than they had before. Comcast will likely either turf the caps voluntarily, or have them ripped off by regulators, but either way, they’re going.

Netflix And Amazon Will Sue Them Out Of Existence

Here’s a handy GIF to explain what Netflix and Amazon will do to Comcast and other ISPs over the next five years or so:



Here’s the fundamental problem that Comcast doesn’t realize yet: Web services really are subject to anticompetitive laws, and they do have to abide by it. Comcast has, so far, largely kept its belief that its streaming services don’t count towards data caps to the Xbox 360, because it tries to pretend data is the same thing as oil, or fudge, or something else you pump through pipes instead of ones and zeroes, but they’re obviously planning to try and make that a reality on anything that streams video. Verizon is already setting itself up to get dragged into court and beaten with sticks by Amazon, and it’s unlikely Netflix won’t join in the fun, probably as soon as this year.

The simple fact of the matter is that Netflix and Amazon have more money, more lawyers, more to lose, and the law on their side. In fact, expect both Netflix and Amazon to exert a lot of effort to keep this merger from happening in the first place.

Congress Makes Them Illegal

If the regulators don’t peel off Comcast’s data caps, and Netflix and Amazon won’t manage to punch a hole in them, Comcast still has to deal with the fact that the federal government can simply pass a law and force Comcast to remove those caps as well. In fact, that’s likely to come sooner rather than later.

There is nothing that can motivate a politician like passing a popular law, and the Keep The Netflix And Internet Porn Flowing Act of 2014 is probably being written as we speak. True, Comcast has a lot of money… but again, so do Netflix and Amazon, and all the money in the world can’t help you if no one likes you. It doesn’t help that Comcast’s attempted merger will put it squarely in the sights of none other than Chuck Schumer. Schumer is a publicity hound and he loves consumer-rights issues, and he’s already twisting arms. It really won’t take much for the guy to decide beating up Comcast in the Capitol Building will make him look good.

In short, data caps are the last wails of a dinosaur before it gets sucked under the tar. And now that Comcast has made itself such a target, expect that tar to be particularly hot and sticky.

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