Google Stadia Will Reveal How Stupid Internet Data Caps Are

As the gaming industry begins to shift from physical media to cloud streaming services, it will soon find itself on a collision course with America’s substandard broadband. Worse, 4K game streaming will run face first into broadband usage caps and overage fees that serve no technical purpose—outside of jacking up your already costly monthly bandwidth bill. Last week, Google delivered more details on the company’s Stadia game streaming service, which promises to eliminate game consoles and shift all processing power to the cloud. The company’s Founder’s Edition launch bundle includes a Chromecast Ultra, Stadia controller, and three months’ worth of Stadia Pro for $129. Meanwhile, at E3, Microsoft talked about xCloud, its streaming service, and Bethesda announced Orion, its game streaming tech. According to Google, Stadia will deliver a small roster of modern titles—without downloads—to any device with a Chrome browser. To take full advantage of games at full 4K resolution and 5.1 surround sound, Google says that users will need a 35 Mbps connection.

One problem is that many Americans lack access to the speeds necessary to take full advantage of the service. FCC data suggests there’s still tens of millions of Americans stuck on sluggish DSL lines or satellite broadband connections that barely meet the FCC’s standard definition of broadband (25 Mbps downstream, 4 Mbps upstream). But a bigger problem for Stadia users is going to be US broadband caps and overage fees.

For years, US broadband providers have quietly implemented monthly usage restrictions in a bid to cash in on the rise of streaming video. The surcharges not only act as a glorified rate hike on already expensive US broadband connections, but can deter consumers looking to ditch traditional cable TV and use streaming alternatives like Netflix. Initially, ISPs tried to claim such limits were necessary to help manage congestion on their networks. After those claims were repeatedly debunked (often by telecom executives themselves), ISPs stopped offering any technical justification whatsoever. “There's no real evidence of congestion on wired networks—even the older ones—and if there were, data caps are a dumb way to address them,” Matt Wood, VP for consumer group Free Press told Motherboard. “Congestion occurs, if at all, at a particular time and place. Putting a monthly cap on broadband users to manage congestion is like putting a monthly cap on gas usage to stop people driving at rush hour: there might be some impact, but it's horribly imprecise at best, and people will still drive when they need to.”

A lack of competition and timid regulatory oversight has resulted in no real penalties for ISPs that have erected unnecessary limits to generate additional revenue. While HD and 4K video streaming services frequently bumped into these usage limits, game streaming is going to blow past them. Google says that users who stream games at 720p, 1080p, or full 4K will eat through bandwidth at a rate of 4.5 GB, 9 GB, or 15.75 GB per hour, respectively. Were you to stream Stadia games at full 4K, you’ll easily burn through a terabyte of data in less than three days. In the usage cap era, that’s a fairly obvious problem. Presumably, users would be looking at similar data usage for other upcoming streaming services. Comcast, for example, imposes a 1 terabyte monthly cap in all territories but the Northeast, where competition from Verizon’s (uncapped) FiOS service has hindered Comcast’s ambitions. Users who exceed this allotment have two options: either pay $10 for an additional 50 GB of data, or shell out $50 more every month to eliminate the cap entirely. “This data plan is based on a principle of fairness,” Comcast’s website claims. “Those who use more Internet data, pay more. And those who use less Internet data, pay less.” But there’s nothing fair about limits that have no technical or financial justification. US consumers already pay some of the highest prices in the world for broadband, regardless of their usage habits. Flat rate unlimited broadband is already hugely profitable for ISPs, and users who only consume a few gigs of data never receive a discount from their ISPs. Comcast’s cap is also among the more “generous” allotments. AT&T, for example, imposes monthly usage caps as low as 150 GB on its millions of DSL subscribers, requiring they pay $10 each additional 50 gigabytes of data consumed. Many smaller, regional ISPs have limits that are dramatically lower, some as restrictive as 10 GB per month. Because there’s no competition in countless US markets, consumers often have little recourse to the costly restrictions and can’t switch to an uncapped ISP.

Another major problem is that caps are already being used to harm ISP competitors in the video space. AT&T, for example, doesn’t apply these arbitrary limits if you use its own streaming service, but will hit you with these charges if you use a streaming provider like Netflix. Despite this being clearly anti-competitive, regulators have yet to issue even a tepid warning.

"Wireline providers like AT&T can find ways to lift their customers' usage caps, just so long as those customers are also willing to buy Pay TV packages or watch AT&T-owned DIRECTV or Time Warner video,” Wood said. “That tells you all you need to know about the supposed need for these caps. It's paper thin, and blows away as soon as you toss some more cash at the internet provider for their own content they push."

While the problem is exclusive to video streaming at the moment, it’s likely to spread into the game streaming space. Many ISPs are exploring their own game streaming platforms. If industry precedent holds (and net neutrality rules aren’t restored), it’s very likely that ISP game services likely won’t count against your monthly usage limit—but Google Stadia will. Whether Google Stadia succeeds in revolutionizing gaming remains to be seen. But game streaming seems inevitable, and as these cloud-based alternatives begin to emerge, they’re going to highlight the arbitrary limits imposed by regional telecom monopolies with just one goal: jacking up your already expensive monthly broadband bill.