Comcast Corp. will delay a new fee on heavy internet users in the Northeastern U.S. following criticism of plans to expand the controversial strategy during the pandemic.
Comcast intended to impose extra fees for heavy internet use on customers in about a dozen markets starting in May, including New York, New Jersey, Pennsylvania, Virginia and Washington. The Philadelphia-based company already charges such fees, called usage-based pricing, in other parts of the country.
But Comcast was criticized for raising prices at a time when millions of people need internet access to work and attend school from home. The outcry included the attorney general of its home state of Pennsylvania.
In markets where Comcast’s usage-based pricing already exists, customers who exceed the limit pay $10 more for additional increments of 50 gigabytes, with overage charges capped at $100 a month. Customers can pay $25 to $30 more each month for unlimited access. One terabyte equals about 1,000 gigabytes.
Internet service has been a bright spot for cable providers, especially during the pandemic, attracting new subscribers, boosting revenue and bolstering profit. That’s a big benefit at a time when pay-TV customers are dropping service for streaming. The companies have tried to frame the pricing strategy as a fairness issue, saying customers who only go online to check email shouldn’t pay as much as users who play high-definition video games or watch movies and TV for hours.
Some consumer groups say there’s no reason for the fees. “This is just arbitrarily capping users so you can charge them more,” Gigi Sohn, a distinguished fellow at the Georgetown Law Institute for Technology Law & Policy in Washington, said in an interview.
More at Bloomberg.