Recently, I read a story, thanks to my fabulous RSS reader (Vienna), about an incident in which a Comcast customer had his Internet service terminated because he exceeded some, apparently ill-defined, limits on his downloads.

The story caught my attention because I write a lot about HDTV and Internet TV, and I'm also a Comcast customer. So I started digging.

Here's what The Beta Stage said.

"Comcast accused [the customer] of downloading 305GB in November and 297GB in December. It's Comcast's policy to suspend any account that exceeds usage limits twice in any year. Doesn't Comcast advertise unlimited use? What are the usage caps? Comcast representatives would only say 'I'm sorry but I cannot divulge that information.'"

From that starting point, the author, Brad Levinson, went on to make a forecast:

So, say you have Joost open for 10 hours a day -- perhaps hacked on your Apple TV. Congrats: You're 1/3 of the way towards being kicked off of Comcast for a year. Add some BitTorrent. Add video podcasts. Add iTunes movie downloads at a gig apiece. Throw YouTube into the mix. Then multiply that by the number of computers in your household. Problems? I'd say.

It all sounds pretty ominous. Joost is coming. We'll all be downloading HD content. Comcast might want to scare customers away from Internet TV and back to their traditional broadcast offerings.

I did some digging and found what seems to be one of the original stories at The Colorado Springs Gazette. It may be a different customer.

Here are the facts:

• Comcast gave the customer a warning first.
• The customer asked what the limit is so he could comply, and Comcast refused to give a number.
• When the Colorado Springs Gazette journalist asked Comcast for an official answer, Cindy Parsons, VP of Public Relations for Comcast in Colorado said that customers who exceed the average national usage by a factor of 100 are in violation.

That's 100 times the usage of the average national customer.

So I called Cindy Parsons and chatted with her myself. She confirmed the same numbers provided to the newspaper. Violators whose usage is 100x the national average are first warned. She also verified the same sample numbers: violators would have to download 256,000 photos, 13 million e-mails or 30,000 songs. Depending on the size of each kind of file, it looks to me like something on the order of several hundred gigabytes is the upper limit and matches, more or less, with the Beta Stage story.

However, what I was worried about was video, not e-mails. Acoording to Joost, downloads come in at 320 MB per hour. If you watched 10 hours of Joost per day, as Mr. Levinson posited, that alone would be about 96 GB per month. Still pretty far from Comcast's limits even if you're buying music and movies on top of all that from iTunes. However, it's close enough for some to raise concerns.

Ms. Parson's response was that Comcast monitors traffic all the time. She wouldn't go so far as to say that as the customer base moves more and more to TV on the Internet, the average would rise -- and so would the 100x factor, but I think they'd have to do that. In my opinion, not hers.

What she would say, on the record, was that customers are contacted first, before their service is disconnected, to determine if there's a better plan for them. Perhaps they're running a business out of the home. Ms Parsons also said, "Comcast constantly seeks to research and develop new technologies to provide the best possible internet experience for customers."

Which is polite PR speak for the fact that Comcast more or less has to pay attention to the satisfaction of their customers in a very competitive environment. In fact, hardly a day goes by that I don't get a big, colorful card in the mail from Qwest inviting me to save money, avoid constanly rising cable prices, and come over to Qwest's bundled Internet, TV, and digital voice services. (DirecTV is their partner.)

The Big Picture

While retaining customers is important, I believe the larger issue is that the Internet is a modern utility and a lifeline. People who work at home and connect to the office via VPN depend on it. Commerce depends on it. Customer support and all kinds of other daily activities depend on this essential resource. So, I think Comcast and all its bretheren, Time Warner, Cox, and so on, need to be very careful about exercising the power they have to hinder competition to their own broadcast TV services.

That said, I've hardly ever heard about a company with the power to harm the competiton not take up that option. The question really is, what's in the cable company's best interests? How much money is there to be made from cable TV services versus Internet services, how much oversight is there from government at all levels, and how proactive are the company's managers in realizing where the market and money is going?

My take right now is that Joost and other companies that are delivering video on the Internet are going to make a lot of money with their delivery partners, both directly and indirectly. If Comcast needs more bandwidth in order to make more money, they'll invest in new equipment and pass the cost on to the customer. But I really don't see the cable companies blocking or metering Internet video. Instead, I suspect that every cable company executive is drooling at the prospect for increased bandwidth that can be used as a marketing tool, a good tariff justification to quietly raise rates, and new services and revenue.

I posed the question to Ms. Parsons about tiered services. For example, a basic service for casual users and a more expensive service for heavy users. She didn't have any information to share about that, but that's certainly one way to deal with non-business customers who require lots of capacity.

My take is that the market will adjust. No Internet Service Provider can afford to clamp down on video services like Joost, annoy its customers, drive them into the arms of the competition, and lose out on new revenue.