Customer Spending Caps Hit Comcast's Blazing Fast 50Mbps Broadband Service?

How much would you spend on faster broadband?

This has mostly been an academic question in the United States, where speed-hungry consumers have been glad to get 6Mbps downloads and 1Mbps uploads from the local cable franchise, with few other choices.

Now Comcast is changing the game with its extreme 50Mbps broadband service roll out, based on Docsis 3.0. The upgrade means customers who used to pay $42.95 for 6Mbps downstream and 1Mbps upstream now get 12Mbps/2Mbps, while customers who once paid $52.95 for 8Mbps/2Mbps now get 16Mbps/2Mbps.

Good deal, right? But according to the ever-excellent DSLReports, some customers are responding to the upgrade by downgrading to a cheaper offering.

One recurring theme we've seen in our forums is that the new speeds have many users downgrading. In both forum threads and polls, many customers on Comcast's 16Mbps/2Mbps tier say they're downgrading to their 12Mbps/2Mbps tier -- apparently because they don't think an additional 4Mbps downstream is worth $10. Customers used to be willing to pay the additional $10 for double the upstream speed, but there's no longer an upstream difference between the tiers.

Meanwhile,
$139.95 for broadband remains a little too rich for most people's blood. The less expensive 22Mbps, $62.95 tier seems more popular among speed freaks. As always, curious users can track deployments and customer experiences in our Comcast forum.

This reminds me a bit of the early resistance among dial-up subscribers to broadband service itself -- short sighted and very likely short lived. Price resistance will melt over time as people come to recognize the qualitative change that massive increases in bandwidth provide, and prices will inevitably drop.

What's less clear is how Comcast hopes to sell 50Mbps broadband for $139.95 and keep its TV franchise intact. At those prices, upgrading broadband becomes cost-neutral if consumers also decide to dump their cable subscriptions. (Comcast is now offering upgrades across 20 percent of its service footprint, according to DSLReports, going head to head with Verizon's 50Mbps FIOS optical networking service.)

Seems like that could be the best deal of all. From a Comcast press release on Thursday:

"With Extreme 50, Comcast customers will be able to download a high-def movie (6 GB) in about 16 minutes, a standard-def movie (2 GB) in about
5 minutes and a standard-def TV show (300 MB) in a matter of seconds."

Update: As some commenters have noted, Comcast has instituted a bandwidth cap on all of its residential customers, including top tier customers. The cap is 250GB per month and the company claims that very few of its customers will ever hit the threshold. Still, especially if you're paying for 50Mbps service, that limit has got to be hard to swallow. At full capacity, a customer could run through their entire allotment in about 10 hours. The downgraders may be on to something, at least while the caps stay in force.