Jon Brodkin - Jul 20, 2016 3:13 pm UTC
CenturyLink next week will begin charging data overage fees very similar to the ones that Comcast has implemented.
Like Comcast, CenturyLink is charging the fees in part of its territory as a "trial" designed to gauge customer response before a wider rollout. The fees are also $10 for every 50GB of additional data, the same as Comcast.
While Comcast is limiting monthly overage charges to $200, CenturyLink's overage fees will not exceed $50 per month. But CenturyLink hasn't announced any option for residential customers to purchase unlimited data, and even paying the overage fees doesn't guarantee that customers can use the Internet as much as they like. Customers who don't reduce their usage or switch to a pricier package that allows more data usage could be disconnected entirely, CenturyLink says.
The "usage based billing trial" will start July 26 in Yakima, Washington only. There are different monthly limits depending on speeds, which are quite low on CenturyLink's DSL network. Service plans with speeds of 7Mbps or less will get 300GB a month before overage charges kick in, while plans that are faster than 7Mbps will get 600GB. (Comcast recently boosted its cap from 300GB to 1TB.)
CenturyLink operates fiber-to-the-home service in some areas. Customers with fiber who pay for gigabit speeds are exempt from the new data caps and overage fees. CenturyLink Internet customers who subscribe to the company's Prism TV service are also exempt from the caps and overage charges, a move that could encourage customers to pay for traditional cable TV instead of switching to online streaming services like Netflix.
Somewhat confusingly, CenturyLink has separate usage limits for customers outside of Yakima, Washington. Even though non-Yakima customers don't pay overage fees yet, they do face data caps. These customers are subject to "download guidelines" that allow consumption of 150GB a month on service plans with speeds of up to 1.5Mbps and 250GB for plans with speeds greater than 1.5Mbps. Customers who exceed these limits will be notified by CenturyLink that they must reduce their usage, upgrade to a higher speed plan (if one is even available), or buy business-class high-speed service.
"If you continue to exceed your usage plan without taking advantage of one of the many options provided, CenturyLink reserves the right to disconnect your service after the third month of excessive usage in a rolling 12-month period. CenturyLink will weigh variables such as network health, congestion, availability of customer usage data, and the line speed purchased by the customer as factors when enforcing this policy," the company says.
While the overage fees applied to Yakima customers are capped at $50 a month, CenturyLink says that "paying the $50 does not mean a residential High Speed internet customer is entitled to unlimited usage. Data usage that repeatedly exceeds the usage caps and interferes with other customers’ use of the service may still be addressed under the CenturyLink High Speed internet terms of service."
Customers in Yakima will have the overage fees waived the first two times they exceed the monthly limit.
We contacted CenturyLink this morning to ask if the new overage fees are designed to generate revenue or to account for a shortage of network capacity. We also asked whether and when CenturyLink will roll the overage fees out to other cities or throughout its territory, but we haven't gotten a response yet.
Last month, Frontier Communications CEO Daniel McCarthy acknowledged that data caps and overage charges are implemented to generate revenue rather than to solve any network problems, since networks are facing fewer capacity constraints as technology improves and data transport costs decline. Frontier isn't implementing data caps and overage fees for now, he said.
It's pretty clear that customers don't like home Internet data caps, but they generally have little choice as competition for high-speed Internet is so scarce. CenturyLink's trial to test customer response might result in changed implementation details—such as how Comcast raised its data cap and limited overage fees to $200 a month after furious complaints—but angry responses to the trial probably aren't likely to stop the spread of caps altogether.
UPDATE: CenturyLink didn't answer our question about network capacity, but provided a response, as follows: "CenturyLink is conducting usage-based billing trials in Yakima, WA, to allow customers to control their Internet usage. This gives our customers proactive management of their usage and ensures they are being billed fairly. Very few customers will see any change in what they pay for Internet service, as customers will only be billed an additional amount if they exceed the Internet usage limit for the High-Speed Internet plan they purchased. CenturyLink will analyze the data from this trial to determine next steps and make decisions regarding further rollout of usage-based billing."
