The coronavirus could upend broadband monetization models

Amid the global coronavirus pandemic, US broadband providers are under increased scrutiny from the Federal Communications Commission (FCC) while consumers are spending additional time at home.

att sign

In an effort to protect consumers from high overages or connectivity issues that may result from increased internet use, Democratic members of both the FCC and the US Senate have asked internet service providers (ISPs) to temporarily suspend broadband caps and overage fees for affected communities.Advertisement

Consequently, broadband providers are lifting caps on data usage and increasing peak data speeds in response to the coronavirus outbreak:
  • AT&T temporarily lifted broadband usage caps, per Motherboard. The carrier usually imposes broadband usage caps that range from 150 GB for low-cost plans to 1 TB per month for higher-cost plans. When customers reach their data limit they receive an overage charge of $10 per each additional 50 GB consumed. By lifting broadband usage caps, AT&T is helping to reduce the likelihood that consumers will max out their plans while they spend additional time at home.
  • Mediacom has offered customers in all service tiers 50GB of additional data through the end of March, according to Motherboard. Mediacom imposes monthly caps of 400 GB to 6 TB depending on the plan, with overage charges of $10 per each additional 50 GB consumed, meaning customers could save $10 per month if they pass that limit
  • Comcast increased peak data speeds for low-income customers and is providing free broadband trials. The broadband provider increased download speeds on its Internet Essentials plan to 25Mbps, up from 15Mbps, and increased upload speeds to 3Mbps, from 2Mbps. Additionally, new customers can trial the service, which usually costs $9.95 per month, free of charge for 60 days.

However, once the dust from the pandemic settles and life begins to return to normal, it will be next to impossible for providers to reimpose usage caps and data overage fees. Various telecom experts with whom Motherboard spoke "warned that broadband usage caps and overage fees are little more than a glorified price hike, employed by regional telecom monopolies to drive up costs."

If broadband providers like AT&T should decide to reintroduce usage caps for their plans after temporary subsidies, it's likely that already frustrated broadband customers could choose to switch to rival ISPs such as Verizon, RCN, Frontier, Optimum, Spectrum, and CenturyLink, which have already done away with those practices.

Signup Today: Connectivity and Tech Briefing by Business Insider Intelligence