Cox planning to impose usage overage fees
DSLReports has received information confirming that Cox Communications will be testing overage fees this summer ahead of a potential nationwide deployment. A Cox insider familiar with the cable operator’s network management practices says that customers in the company’s Cleveland, Ohio market will be informed on May 19 that they’ll soon be facing overage fees of $10 for every 50 GB over their usage cap they travel.
From June to September, Cox customers in Cleveland will have their “overage” usage tallied on their bills, but users initially won’t be charged. Instead, they’ll see the estimated overage fee and an accompanying credit. They’ll face the real charges starting in October, according to the insider.
A draft customer support script obtained exclusively by DSLReports states that this lead-in period will “give customers the opportunity to familiarize themselves with their typical data usage and take action, such as secure their WiFi network or change service plans, if they exceed their limit.”
The script also notes that customers will be notified via e-mail and a browser popup when they’ve reached 85% and 100% of their monthly data allotments. Cox services like Cox TV Connect, Cox Digital Telephone and Cox Home Security will not count toward the usage cap, a Cox insider claims.
As we noted last week, Cox just got done dramatically increasing the usage allotments on all of the company’s tiers. As it stands now, these are the allotment limitations the company’s users face:
- Starter: 150 GB/month
- Essential 250 GB/month
- Preferred 350 GB/month (the most popular plan)
- Premier 700 GB/month
- Ultimate 2 TB/month
Given the dropping cost of bandwidth and the soaring costs of services, broadband operators in the States have had a hard time justifying caps and overages.
Time Warner Cable, you’ll recall, faced a severe customer backlash back in 2009 when it tried to impose usage caps and overages across the company’s footprint. The company backtracked after public and political pressure, ultimately settling on making caps and overages a voluntary offering.
Cox’s support script repeatedly tries to downplay the usage charges by claiming that only around 5% of the company’s users will be impacted. One portion of the script goes so far as to try and suggest that usage limits will help the poor by allowing Cox to provide lower-cost services. The script also trots out some very familiar justifications for imposing caps and overages in the age of HD (and soon 4K) Internet video:
“Data usage plans promote fairness by asking the high capacity Internet users to pay a greater share of network costs. Some critics of data usage plans push a flat fee pricing model, meaning that users would pay a flat fee whether they simply use the Internet to surf the web and check email or if they are a “super user” and consume copious amounts of bandwidth.
Data usage plans are a far more fair approach, giving consumers a choice based on their personal needs rather than forcing all customers to absorb the network costs incurred by the 5% of customers who exceed their allowance.
In contrast, critics of usage caps and overages often counter that American consumers already pay some of the highest prices for broadband services in the developed world (OECD data), and usage overages aren’t about “fairness,” they’re about protecting TV revenues from the inevitable rise of Internet video. Similarly, consumer advocates have argued that if just “5%” of users are causing problems, why not push those users to business-class tiers, instead of imposing surcharges on your entire userbase?
Insiders say Cox is planning to move forward with usage charges for all of the company’s markets depending on the success of (read: customer response to) this initial trial. I’ve reached out to Cox with request for comment and will update this post accordingly.
Source: DSLReports
