NEW YORK — Comcast president Neil Smit said Tuesday the cable giant has no plans to start charging broadband subscribers by their level of bandwidth consumption, a model that recently received the blessing of Federal Communications Commission Chairman Julius Genachowski.
Usage-based billing for broadband service, which enables providers to charge heavy bandwidth users more than subscribers who use less, is widely viewed as a potential hedge for cable companies against the possibility that online video could replace traditional cable-TV service.
Online video and other rich media content on the Web uses far more bandwidth than more traditional Web content such as e-mail. As video content expands online, broadband-network owners could face traffic issues and higher costs, and companies could also adopt usage-based billing to replace lost revenue from traditional video services.
Wireless data providers such as AT&T have already rolled out usage-based billing plans, and cable executives such as Time Warner Cable chief executive Glenn Britt have said it will come to the wire-line business. The model, however, is controversial, and early tests of usage-based billing met with consumer outcry when Time Warner Cable tested it in several markets.
At an investor conference hosted by UBS, Smit noted that Comcast has set a monthly bandwidth cap for its broadband subscribers of 250 giga bytes and has provided a meter to its customers so they can see how much bandwidth they use.
He said the average user consumes 2 to 4 gigabytes a month.
Smit also dismissed accusations from network owner Level 3 Communications that Comcast’s recent demand for compensation from the company for an expected increase in traffic exchanged between their networks violates the FCC’s net-neutrality principles.
The traffic increase will be caused by Level 3’s new partnership with popular online video provider Netflix, which many investors view as an emerging competitor to the cable industry.
Smit said paid “peering” relationships such as the one proposed with Level 3 have been around for years and amount to a standard practice.
