In trial markets around the country, Comcast has been testing out new ways of charging customers for Internet usage. Customers are allowed 300GB of data per month, and once they reach that point—which many people with a decent grasp of the English language might refer to as a limit or cap—they’re charged an extra $10 for each additional 50GB. Subscribers have the option of paying an extra $30 or $35 for unlimited plans that let them stream and eat up as much data as they want.
But back to that cap. For months, Comcast has insisted that “cap” is the wrong word. As far as the company is concerned, there is no cap. “We don’t call it a cap,” a Comcast spokesman told Fortune in September. “We call it a data plan just like wireless companies have data plans.”
In early November, a Comcast customer service script was leaked, revealing that agents are never supposed to use the term “data cap.” Instead, representatives are instructed to say “data usage plan.” The GB limit is “not a cap,” the script explains, because “we do not limit a customer’s use of the Internet in any way at or above 300 GB.”
On Tuesday of this week, Comcast CEO Brian Roberts spoke with Business Insider‘s Henry Blodget at BI’s Ignition Conference, and when asked about data caps, he stuck with the company script. “They’re not a cap,” Roberts said. “We don’t want anybody to ever not want to stay connected on our network.”
Not only is the word “cap” being broadly misused, according to Comcast, but the company is clinging to the idea that the trial data usage system is fairer than what’s in place now. In the same way that “the more bits you use, the more you pay” with cell phone data plans, Roberts said, customers who use the most Internet bandwidth should pay the most. The concept is in place everywhere you turn, he said: “Just as with every other thing in your life, if you drive 100,000 miles or 1,000 miles you buy more gasoline. If you turn on the air conditioning to 60 vs. 72 you consume more electricity.”
“Part of the rationale for all of these trials is this principle of fairness,” the Comcast spokesperson explained to Fortune in September. “Those who want to use more pay more, and those who want to use less pay less.”
Well, that’s not exactly true. The plans being tested generally only offer customers the opportunity to pay higher bills. The option of true data-based pricing, in which light users would pay significantly less money for Internet service, is not on the table. In a few test markets, customers can choose a “flexible data option” that will slash a measly $5 off their monthly Internet bills if (and this is a big if) the subscriber uses less than 5GB of data. Comcast will charge a $1 for every 1GB over that mark, so any potential savings could be negated by streaming a few hours of Netflix. In most test cases, though, people who use the Internet minimally are not rewarded with bills that are lower than they were paying before the arrival of “data usage plans.” And in all situations, heavy bandwidth users will have to pay extra.
Even more important, the notion of comparing Internet data usage to gasoline or electricity is deeply flawed. Oil and electrical companies incur costs for every gallon of gas and kilowatt hour of electricity generated. The same cannot be said of every gig of data provided by a broadband Internet service. The customer service script advised agents that they should never say the plan is about “congestion management” because “it is not,” Comcast acknowledged in the memo—which, again, wasn’t supposed to be seen by the public. The bandwidth provided by Comcast is not a scarce resource like gasoline; there’s plenty of capacity, and it’s not like Comcast is losing money on customers hogging the data.
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“So reject the myth that Comcast is simply trying to cope with limited bandwidth,” Harvard Law professor Susan Crawford wrote last week at Medium in a brutal, comprehensive takedown of the company’s data-pricing scheme. “Even Comcast isn’t pretending that’s the case. This is a business strategy. It has no empirical relationship to the cost of delivering a megabyte or 500GB of data to your home.”
Complicating matters further—and raising even larger questions about the concept of “fairness”—is the way that Comcast is tabulating customer data usage. Specifically, while typical Internet usage—streaming Netflix or Hulu, watching YouTube—is counted toward one’s monthly data threshold (not cap!), Comcast’s own Stream TV service can be used without limit, and without counting toward the non-cap limit. Such a system obviously makes Comcast’s service far more attractive, giving it an (arguably unfair) advantage over other streaming options.
Comcast has also gone to great lengths to point out that only a very small percentage of customers—somewhere between 5% and 10%—go over the 300GB monthly limit. “You can watch hundreds of shows and movies and other things before you hit these levels, many devices,” CEO Roberts said this week. “I don’t think it’s illogical or something people should be paranoid about.”
And yet it would hardly seem paranoid to be concerned that a business with a long track record of complicated, opportunistic pricing strategies, abysmal customer service ratings, and an overall reputation as America’s most hated company might not have the best interests of American consumers at heart.
In fact, there’s good reason to believe that in the near future, the current 300GB data limit levels will be reached by far more than 10% of Internet users. “In about five to seven years, those seemingly abundant data caps will begin to look paltry,” Crawford wrote. By 2020, forecasts call for the top 15% of Internet users to require about 1,000GB of data monthly.
With this in mind, it’s understandable that Comcast hopes that customers never see 300GB as a “cap.” If it was a true cap, then it would cap Comcast’s ability to make more money off of subscribers.