Stingy data caps throttle ViaSat subscribers

7 March 2013 by Steve Blum
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Download speeds don’t mean much when the price of a byte goes orbital. For the first time, a satellite Internet service provider, ViaSat, was included in the FCC’s Measuring Broadband America report. Satellite Internet subscribers live in severe broadband poverty, according to the FCC’s data.

Based just on ability to actually deliver advertized speeds, ViaSat was the clear winner in the testing. The download speeds experienced by users were, on the average, 37% better than promised. Fiber to the home systems were 15% better, cable modems were nearly at par and DSL services averaged 15% worse than advertised.

But, the FCC report pointed out, in contrast to other technologies that have high data caps and define service tier by download speed, “ViaSat offers a single service rate and provides service tiers in the form of data caps.”

As a result, the FCC data shows that satellite Internet subscribers do not receive anything close to the benefit delivered by other technologies.

“The satellite business model does not support large data caps, and this is evident in the behavior of the satellite consumers who participated in the study,” the report concluded.

Cumulative distribution of monthly user traffic, by technology. Source: FCC.

The chart above shows that the median DSL user downloaded about 17 GB of data a month, with cable and fiber customers doing about 39 GB and 35 GB a month, respectively. In clear contrast, the median ViaSat customer only received 1.2 GB per month.

ViaSat’s deficit in delivered service is even starker when you look at the heaviest users. The most that any satellite home received over the course of a month was 15 GB. In comparison, DSL customers maxed out at 807 GB and cable subs at 1.2 TB. The top fiber customers took 1.6 TB per month, more than 100 times what satellite homes received.

The California Public Utilities Commission is considering a proposal from ViaSat to subsidize satellite Internet service over a vast swath of the state, including areas that have wired broadband providers. Current rules would effectively prevent upgrades to that infrastructure for years to come.

Stranding those Californians on the wrong side of a hundred-to-one divide is the wrong thing to do.

Tellus Venture Associates assisted with several CASF proposals in the current round, including some that are impacted by ViaSat’s proposal. I’m not a disinterested commentator. Take it for what it’s worth.