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Are Data Caps Coming for Landline Internet Service?

We're reluctantly getting used to data caps on our mobile phones. But as Americans, we're spoiled with essentially unlimited data from our landline Internet providers — a situation that might one day change.
/ Source: TechNewsDaily

We're reluctantly getting used to data caps on our mobile phones. But as Americans, we're spoiled with essentially unlimited data from our landline Internet providers — a situation that might one day change.

Landline providers are dealing with exploding demand. Every Netflix addict adds to that. Absent more network capacity, the providers will be forced to do something.

Right now, monthly landline data limits in the U.S. are usually so high that most users are unlikely get close to them. A high-definition movie takes up about 1 to 2 gigabytes, for example, and it would take at least 10 hours of high-def Netflix streaming to hit the 30 GB limit that Cox Communications puts on its cheaper service plans, such as its $30-per-month starter package. By comparison, most wireless data caps are now in the single gigabyte range, after which the carriers throttle your download speed.

The issue is, what happens when demand rises? According to the quarterly "State of The Internet Report" by networking software company Akamai from April 2012 (the most recent), the average U.S. customer demand is anywhere from 57 to 636 megabytes per month, depending on the region.

Although the growth of fixed-line, broadband subscribers is leveling off (according to a 2011 report from McKinsey & Co.), households are demanding faster data speeds. Telecom providers already offer varying service levels, but since network build tends to follow, rather than lead, demand, odds are the data caps will start to become noticeable at some point.

Living within limits

What do people do when they get capped? A study from Georgia Tech examined what can happen by looking at a dozen households in South Africa, where small broadband caps were in place until 2010. (They have gone up a bit since then.)

The landline plans in South Africa were not unlike the ones offered in the United States — for your smartphone. They ranged from 1 to 9 GB per month. Imagine watching a Netflix movie and having it suddenly cut off in the middle.

Caps in the United States are a lot higher, ranging from tens to hundreds of gigabytes. And as one might expect, the behavior of South African Internet users is very different.

Some users routinely paid additional fees for more data during the month. Others visited family members to use their Internet accounts. Some even switched to smartphones (which, coincidentally, sometimes had higher caps than the landline systems).

Are we headed to this scenario in the U.S.? Not quite, though carriers are looking at ways to cap data usage.

Time Warner Cable, for example, offers essentially unlimited data, but the company is piloting a program in southwestern Texas with incentives to use less. Users who stay below 5 GB per month will get $5 off of their bill. For light Internet users — those who do only a little email and Web surfing — that might work. Alex Dudley, a spokesman for Time Warner Cable, noted that the plan is "opt in," not mandatory.

Other ISPs have caps that vary with the plan you choose. Cox has one of the lower ones for its cheaper service — 30 GB per month, combined upload and download, with the $25 Starter Package. That's enough for most activities, and even for downloading a few HD movies (a 2-hour film will typically be about 4-5 GB).

[For more about Web video, see " What Are Smart TVs? "]

AT&T introduced data caps in April 2011: 150 GB per month for DSL subscribers and 250 GB for users of its higher-end U-Verse service. EarthLink has a 250 GB cap.

Not a problem for most

Todd Smith, spokesman for Cox, noted that only 2 to 3 percent of customers ever run into the data caps. Whenever someone exceeds that, Cox will call and suggest moving up to another tier.

Most of the time that happens because a residential customer is running a business out of their house, he said. Technically, that's not allowed. But Internet service providers don't police that — it's too time-consuming. And it is often better to keep the customer than it is to cut them off.

Dudley from Time Warner Cable agrees. "The people that hit the limits are often our best customers," he said. They simply move customers to a higher tier.

Keeping  track

Cox has a table that shows typical levels of data use depending on the kind of things you do online. Whether or not you are shopping for Cox service, it's a good way to estimate how much monthly data you will need.

Cox also offers an online tool for its customers to see how much data they are using each month. That can also be a helpful security tool. Data use shoots up when your computer has become infected with a Trojan or becomes part of a botnet — an army of computers commandeered by a hacker, typically to attack a website.

"In some cases, customers who exceed their limit don’t even realize it, because their computers are infected with [malware] that’s consuming bandwidth," Smith said.