Google's Dead Wrong If It Thinks Broadband Caps Won't Hurt Game Streaming

from the do-not-pass-go,-do-not-collect-$200 dept

For a decade we’ve pointed out how broadband providers have increasingly imposed arbitrary, confusing, and punitive usage caps and overage fees to cash in on the lack of competition in US broadband. Not only have industry executives admitted these limits aren’t technically necessary, they’ve increasingly been abused anti-competitively. AT&T, for example, doesn’t impose the limits on its broadband customers who use its streaming video service (DirecTV Now), but will impose the added charges if you use a competitor like Netflix.

For years, ISPs have slowly deployed these unnecessary limits, hoping consumers wouldn’t notice they’re the frog in the slowly boiling pot of water. But as higher-bandwidth services like 4K video streaming have arrived, consumers have started to notice the unnecessary limits in greater numbers. But, however tight caps may become with 4K Netflix, that’s nothing compared to what’s going to happen as companies like Google begin pushing game streaming services like Stadia, which eliminate local game hardware, move all processing power to the cloud, and then stream everything to the end user.

Early analysis suggests that at full 4K, users will burn through Comcast’s monthly 1 terabyte usage cap in a matter of just three days. Many ISPs have far lower caps; AT&T for example imposes a 150 GB monthly cap on the majority of its DSL customers, who then have to pay $10 per each additional 50 GB of data consumed. It’s fairly obvious that as game streaming expands, users are going to be looking at some significant sticker shock (which, from the ISP perspective, was the whole point).

Enter Google executive Phil Harrison, who this week in an interview was asked about the impact broadband caps will have on the company’s game streaming ambitions. Harrison suggested the company isn’t worried, though his justifications for that confidence are laughable:

“ISPs are smart [and] they understand that they?re in the business of keeping customers happy and keeping customers with them for a long time.”

LOL, what? US broadband providers have the worst customer satisfaction ratings of any industry in America because they lack real competition in most of their markets. When you consider that means toppling the likes of the airlines, banking, insurance, and medical sectors, that’s no small feat. ISPs don’t have to “keep customers happy,” because there’s no penalty for not doing so. These customers usually have no alternatives to switch to, and rampant regulatory capture means there’s no real penalty from regulators for bad behavior either.

Harrison’s theory rests entirely on the false idea that ISPs will be shamed into raising usage caps:

“The ISPs have a strong history of staying ahead of consumer trend and if you look at the history of data caps in those small number of markets–and it?s actually a relatively small number of markets that have [data caps]–the trend over time, when music streaming and download became popular, especially in the early days when it was not necessarily legitimate, data caps moved up. Then with the evolution of TV and film streaming, data caps moved up, and we expect that will continue to be the case.”

Harrison’s wrong here too. Comcast is the country’s biggest broadband provider, and is increasingly nabbing a monopoly in more and more markets thanks to telcos that refuse to upgrade aging DSL lines. In the last decade, Comcast has raised its usage cap exactly one time since it was implemented, from 300 GB to 1 terabyte in 2016. Numerous other ISPs, with caps as low as 50 GB, have been just as stubborn. US ISPs already charge some of the highest rates in the developed world. Usage caps and overage fees are just double dipping on captive customers.

It’s like Harrison is basing his entire argument on a reality that doesn’t exist. To stay ahead of game streaming, ISPs like Comcast would need to raise their caps exponentially to 10 terabytes or even higher. But that would defeat the entire reason ISPs imposed these limits in the first place (read: make even more money off of emerging new services). You can’t shame natural monopolies into doing the right thing. Even if the inevitable stories blasting usage caps do force ISPs to raise caps, the new limits are going to be chosen based entirely on how to make the most possible revenue from captive customers.

Harrison also tries to claim in the interview that this will all work out thanks to 5G, which ignores that 5G isn’t some competitive panacea, is barely available, and in most instances will cost users significantly more money, while bringing some obnoxious, creative restrictions (Verizon already bans 4K video on its “unlimited” wireless data connections, for example). That’s before we even get to net neutrality, a concept Google hasn’t actually supported in any meaningful capacity since 2010 or so. Most ISPs are busy testing their own game streaming services and, like video, are likely to exempt those services from caps while still penalizing competing services like Google Stadia.

Harrison may just be naive, or he may believe that Google is big and powerful enough to buy ISPs off should they try to get in the way of Stadia. But, either way, consumers are inevitably going to be seeing some bandwidth sticker shock as they blow through their usage caps. And with little competition and no meaningful oversight, “public shame” isn’t likely to have nearly the impact Harrison seems to believe it will.

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Companies: google

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Comments on “Google's Dead Wrong If It Thinks Broadband Caps Won't Hurt Game Streaming”

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Big Noise From Winnetka says:

Just some gainsaying opinion by self-styled authority.

First, this is sure to be cited in future as evidence that Techdirt isn’t a Google shill. That’s a big part of purpose.

Minion as always blithely proposes that ISPs spend any amount required to enable what wants, while also attacking them for daring to profit.

In other words: GIMME GIMME FREE service.

Anonymous Coward says:

Re: Just some gainsaying opinion by self-styled authority.

In other words: GIMME GIMME FREE service.

You need to either go check your eyesight or go back to reading comprehension class as I didn’t see anywhere in that article where it mentions anything close to the author saying that all he wants is free service.

Anonymous Coward says:

Re: Just some gainsaying opinion by self-styled authority.

Funny thing, this side of the pond, I get a fixed rate DSL broadband connection for around £50, and no data caps. That include line rental, and free phone call over the weekend. By that standard the US ISP’s are price gouging their customers. Oh I also have choice of ISP’s, all around the same price.

This has been achieved by effective regulation, which has split the Infrastructure provider away from the phone company, enabling service providers to compete over a common infrastructure. Also, the regulator is distanced from the government, rather than being stuffed with political appointees who have a short time in the job.

PaulT (profile) says:

Re: Re: Re: Just some gainsaying opinion by self-styled authorit

Often not top 10 or 20. I say this often not meaning to brag but I live in Spain in a town of around 30,000 that didn’t have phone lines in most places 30 years ago, and I get 600mb fibre with no caps for about 60 euros a month. The stories I hear of people living in major cities in the US are shocking, yet people demand the government not regulate the ISPs..,

Anonymous Coward says:

AT&T, for example, doesn’t impose the limits on its broadband customers who use its streaming video service (DirecTV Now), but will impose the added charges if you use a competitor like Netflix.

It looks like that’s not true: one will not get added charges for using a competitor like Netflix if one also subscribes to DirectTV Now… which is a terrible policy but should still be stated accurately.

TKnarr (profile) says:

The ISPs are the ones who’ve been trying to gouge money out of Google, Netflix et. al. and sell the idea that content providers should pay the ISPs for the privilege of sending data to ISP customers who’re already paying the ISP to have the ISP transfer data for them. The ISPs won’t raise the caps, they’ll just double down on "Oh, if Google wants to use our wires to send data to our customers Google needs to pay us.". Any executive at Google (or any other content company) who doesn’t realize that needs to be sat down and forced to read/watch the ISPs making their claims.

Anonymous Coward says:

Well so far this year, I’ve hit Comcast 1TB cap 3 times. Had to fork out a bunch more money. Yes you can pay Comcast another $50 to get Unlimited which you USED to have. So really if you want to do online game streaming, you can really add another $50 to that monthly service to do it.

Right now I can’t even get 100Mbps even though I’m paying for 250Mbps service. I’ve called them once and it hasn’t gotten fixed. Looks like I’ll be calling again. But it’s beyond dumb. The faster the speed, the faster you hit that same 1TB cap. This makes no sense. Higher speed should be higher CAP and yet it doesn’t so kind of pointless to have higher speed unless yo pay even more for Unlimited.

It’s only 2 people at my house and I get most of my TV from the Antenna. I’m streaming Netflix programs, but I have no 4K TV in my house. It’s such a SCAM by these company’s trying to protect it’s own service by using these CAPS. These Government created monopolies need to go. There needs to be real competition. Why shouldn’t Comcast, TWC, AT&T, and everyone else fight for business in every town and City for users!!!

Anonymous Coward says:

Re: Re:

Why shouldn’t they have to fight for customers? Because they paid their politicians good money to ensure THEY wouldn’t have to do anything except collect money and raise prices…

They bought their monopoly fair and square, in the same way that Railroad Barons made their millions… on the backs of slaves, I mean serfs who have no other choice but to pay them for the limited service (if they want to be connected to the internet at all)

Sean says:

Re: Big World

Sure I’d agree that data caps are LESS common outside the US (but not exactly rare). But that dose not change much. Yes it’s a big world but the US is a pretty decent size market for gaming, making it pretty important for Stadia and other streaming services.

Data caps will be a issue for any game streaming service. It’s one of many factors that work to make the target audience even smaller. You need a potential customer with a pretty good connection (not just bandwidth but latency/overall quality), a pretty high or unlimited data limit. Someone willing to pay 10 bucks a month plus full price per game they want to play on the service. And I wonder how many would be willing to do that if they already have a console or gaming PC. Is it really worth 10 bucks a month plus full price per game just to be able to stream the game to your phone or tablet etc (as long as your on a high cap, high quality connection when you do it). It’s just such a narrow market at the time and the pricing structure dose not make much sense IMO.

Plus you give up any ability to play anytime your connection is having issues or google stadia is having issues, no mod support on PC compared to getting the same game on Steam etc vs Stadia. A drop from 4K 60 to 1080p if you stop paying the 10 bucks a month etc.

Stadia will probably do alright, at least at first at the very least just from people curious to try it. But I def don’t see it being a big hit anytime soon. Same for X-cloud or any other similar service. Hopefully Microsoft at least offers a better pricing model instead of 10 bucks a month plus having to buy each game at the same price you could get it from steam etc.

Sean says:

Re: Re: Big World

BTW I live in the US and am lucky enough to have a completely unlimited connection. It’s not the fastest in the world but it’s a extremely solid 100 Mbps down 20 Mpbs up. I use 3 TB+ every month with no issues and no throttling. But I still will pass on Stadia because of it’s pricing model. The fact I already have a gaming PC is another reason. There is no way it’s worth 10 bucks a month plus having to buy or re buy each game just to have the ability to play it on my phone. Heck I can do that for free when I’m in the house using steam link app on my phone.

Sean says:

Re: Re:

Google dose have a strong habit of starting something and just letting it die or killing it pretty quickly. God look at how many different messaging apps they have put out for android trying to give Android a unified "iMessage" equivalent. It’s a mess (anyone remember duo, or alo?). Google plus is dying, inbox, Google Fiber rollouts didn’t continue for long etc.

Anonymous Coward says:

slightly related

I agree caps will be bad for any service like Stadia, but that is not going to be your biggest problem. Google has a horrific history of killing off projects and I have no doubt that once the coolness factor wears off with Stadia they will drop it like so many other good products.

I was super excited when the announced Stadia, but then I remembered all the things they killed off and decided I won’t even get involved.

Anonymous Coward says:


… I’m fine with ISPs continuing with their data cap nonesense as long as they are no longer able to advertise or imply that the service is unlimited and also provide end users a way to throttle hourly/daily/weekly/whateverly their connection as well as turn it off easily…
Since that won’t be happening, I think that data caps need to be explicitly illegal on services sold as ‘unlimited’

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