Demystifying Data Caps

Internet speed test

My service provider has a data cap buried in the fine print of my bill. For the big internet service providers, the cap is typically in the 250 to 300 GB range. But what does this really mean? How do I translate this data cap into something meaningful, like hours of video streamed?

Until we cut the cord on our expensive pay TV package, I basically ignored the data cap. And many internet providers do not enforce data caps for customers that also subscribe to a TV package. But now I have become concerned that we might exceed this cap and trigger warning letters and extra fees. 

The data itself costs my internet provider close to nothing. Of course my internet provider has costs, but total data usage is not really one of them. Data caps are purely a way for the big internet providers to maintain their overall profit margins when more and more of their customers are becoming cord-cutters and avoiding costly Pay TV bundles. 

So how can I turn hours of viewing into gigabytes of data usage? It turns out that bandwidth usage varies significantly based on the streaming service, the video quality of the stream, and the specific streamed content. For example, video content with high levels of action would typically use more bandwidth. Netflix is the most commonly used streaming service, so this seemed like a good place to start. Netflix does a nice job of breaking down their data usage on their website at https://help.netflix.com/en/node/87

For Netflix, HD content takes up to 3 gigabytes (GB) per hour while newer Ultra-HD content displayed by new 4k Ultra-High Definition TVs takes up to 7 GB per hour. Over time, streaming video is becoming more bandwidth efficient but this is a very slow process.

Of course, watching free Over-the-air HDTV is one way to completely bypass any data usage restrictions imposed by your internet provider.

Summary

As streaming continues to grow, the big Cable and Telco internet providers are introducing data caps. Customers who exceed this artificial limit will pay additional fees. With a cap of 250 GB per month, you can stream 2.5-3 hours per day of HD Netflix content, and only about 1 hour per day of Ultra HD. So doing the math, it appears the big internet providers are placing their bandwidth caps exactly in a place to punish cord cutting, and this will get worse with a new 4k Ultra-HD TV. Bottom line: it pays for cord cutters to find an internet provider that does not impose a data cap.