Comcast Bandwidth Cap Sucks for Shareholders

Comcast this week blundered their way into a decision that will likely go down in internet history as being blindly ignorant.  Like IBM giving away the farm to Microsoft in the early 80's and Yahoo! giving away the farm to Google in the late 90's and TimeWarner giving away millions for AOL, Comcast just made a collosal mistake which is going to have terrible implications for its shareholders.


Comcast has chosen to limit bandwidth for its cable internet users.

Many Internet providers reserve the right to cancel the service of the most excessive users. The 250-gigabyte cap is Comcast’s way of specifying a longstanding policy of placing a limit on Internet consumption, and it comes after customer pushed for a definition of excessive use.

But on the Internet, consumer behavior does not stand still. As the technology company Cisco stated in a report last winter, “today’s ‘bandwidth hog’ is tomorrow’s average user.”

New York Times article

Now, this would presumably block people from downloading large files and 'slowing down the internet for other users on the block'.  But if you look at what types of files make up large downloads, that is currently video.

Aha!  They are trying to protect their own business of enabling people to watch video via cable.  No good, enabling your customers to watch download movies via netflix if that cuts into PayPer View or On Demand downloads and sales.

But consider that Comcast has added an entirely new business line in the form of Cable Internet on the infrastructure it had already built for cable.  They made the pie bigger, and now they are going to chase away customers from eating that bigger pie. 

Why would a consumer opt to go with a service that blocks them from getting the full advantages of the internet?

They won't.

As an example, I today get cable internet from Time warner and actual Cable from Direct TV. 

If I were still a comcast customer and they tried to pull this crap on me, I'd drop the cable internet and go with someone that didn't block me from getting what I wanted.

By making this move they have just taken away the value proposition of one of their hotest new business lines to save an old business line with a short life expectancy.  Its kind of like selling someone Grohe faucets and then telling them that they can only dring 250 glasses of water.

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