ANALYSIS: The Average Household Will Surpass ISP’s 1TB Data Caps Within 3 Years

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Rob Toledo

May 05, 2020

Fast facts:

  • Our most recent analysis tracking the growth of home internet usage has found that the average broadband-connected U.S. household will surpass current 1TB ISP data caps before 2024.
  • Escalation in data usage in recent months due to stay-at-home orders has caused a spike that might decline in the near future, but home internet usage will remain notably higher than pre-outbreak usage for the foreseeable future.
  • ISPs will face pressure from consumers to increase data caps like they did in the late 2010s. It is unclear at this time if any major ISPs will do so.

When many ISPs increased their data caps from 300GB per month to 1TB per month, it felt like a cap that would never be reached. At the time, the average household had two or three connected devices and would stream Netflix or watch YouTube a few hours a day.

But four short years after the data caps from most major ISPs increased, some home internet customers are rapidly approaching the new limit. These increases are coming from a wider range of high-bandwidth usage including services like Netflix streaming movies in 4K UHD, YouTube on multiple devices, family video conferencing, more people working from home, and more broadband-intensive web browsing.

As we reported this month, the average home internet customer is now using close to 400GB of data a month, a number that would have surpassed the original ISP data caps from 2016 by over 50-100GB. At current fee structures for overages (which vary by provider), this would add between $200-$250 a year to the average household cable bill.

Our newest analysis of historical FCC data and trending usage data predicts that within the next three years, or before the year 2024, the average household will use over 1TB of broadband data a month, putting them above the current caps. The mean will likely remain below current cap numbers, but as more households turn into power users, the average will continue to spike.

2020-2024 estimations based on FCC data and consumer trend analysis.

Interestingly, we started conducting research on this trend prior to the COVID-19 pandemic. Toward the end of our research and as self-isolation policy started peaking, we are now seeing the largest spikes in home internet usage in history, far beyond what we could have previously predicted or analyzed. ISPs have properly responded by placing temporary holds on their overage fees for breaching data caps, which reflect that many more consumers have reached or exceeded the 1TB monthly data cap during the pandemic.

While we believe this spike will mellow as people return to a more normal life in the next 12 months, it will still settle considerably above pre-outbreak levels. As policy gravitates toward more generalized self-isolation and work-from-home, we expect a substantial overall increase of demand on home internet to remain.

While it is possible that ISPs will respond similarly to previous usage increases by raising the caps again, there will be lag time. Pressure from consumers who see the overage fees will hopefully guide ISPs in the right direction when it comes to setting data usage limits.

We will continue to follow this trend, especially in light of recent increases in home broadband demand and report on this development.