ISPs May Institute Usage Fees To Counteract Streaming Video Surge
ISPs May Institute Usage Fees To Counteract Streaming Video Surge
Posted 11/30/2011 at 11:45am
| by Brad Chacos
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If you’ve cut the cable and switched to streaming services like Netflix or Hulu to fill your Sons of Anarchy viewing needs, you might be in for a nasty shock before long: higher prices. No, Netflix isn’t raising its rates again. It’s your Internet connection itself that your wallet should be worried about! Reports say that major U.S. ISPs, including Time Warner Cable, Charter, Cox and AT&T, are experimenting with usage-based Internet fees – not just to quell streaming users’ massive broadband needs, but also to make Netflix less attractive (and traditional cable more attractive) to TV watchers. Most of the largest ISPs sell digital TV services as well, remember?
According to Bloomberg, companies like Time Warner are losing cable customers on quarterly basis, partly because of dish-based alternatives, but mostly due to streaming services. Since streaming services require large amounts of bandwidth, the cable companies (who just so happen to also control your Internet tubes) figure they’ll make the money back by charging heavy users higher Internet usage fees. And if users balk at the higher Internet costs, what do you know? They can always switch back to cable. Win-win for the ISP! According to the article, “Cable companies see usage-based billing as a way to limit the appeal of online services like Netflix and Hulu, and reduce the threat from new entrants like Amazon and Google.” In addition, usage fees are considered by industry insiders as a great way to squeeze out some extra revenue for ISPs, as traditional cable services are losing growth momentum and incurring rising costs.
Thoughts?
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leyden105
December 04, 2011 at 5:33pm
I'am paying for the fast service Att has it should have as much bandwith as I can use at that speed!
And if not they should only be able to charge real costs per a gig which is only a few pennys and no more.
bling581
December 01, 2011 at 10:49am
They should not be allowed to do this. I wish I could say I'd be amazed if the government doesn't step in and put their foot down, but look what they've let them get away with so far. I only have two choices for internet, Time Warner and AT&T, so if this happens I have no where to go. If the cable companies think this will lure me into getting cable again they're dead wrong.
RUSENSITIVESWEETNESS
December 01, 2011 at 5:08am
Time to break the monopolies before they prevent all future innovation.
tekknyne
December 01, 2011 at 9:51am
Agreed. To me this sounds like cable companies clinging desperately to their fading monopolies. I never understood how the government can allow these things to happen. Assured profitability, really? Seems like a privelidge awarded to only a few. Can we say CORRUPTION!?!?
h e x e n
December 01, 2011 at 4:05am
I hope the cable companies enjoy losing my money. If push comes to shove, I'll cancel my TV package in order to pay for the higher internet costs, which will still probably save me more than I'm giving them.
Some billionaire needs to start laying cable and begin a new company. Maybe communities should band together and start laying their own cable, fiber optic at that.
Wouldn't it be great if little super fast cable providers started popping up that were outside of the monopolized control of Charter and Comcast?
Morete
December 01, 2011 at 2:28am
Time to break up the broadband duopolies and force divestment. ISP's should be forced to lease access to their networks to third party ISPs so companies like AT&T and Comcast would have to compete. This way they would not have to cry about building and spending on new infrastructure at a loss by using only what is already built.
warptek2010
November 30, 2011 at 11:10pm
Thoughts? Here are some thoughts... this is the way corporations treat their customers in this era, like complete shit. Not at all like the old days where the customer was king and they bending over backwards to get your business. It is time that corporations, instead of concentrating on raising their share price for the investor, BEGIN TO TREAT THEIR CUSTOMERS AS THEIR INVESTOR and either treat us with some respect in the form of low prices or make the customer share holders. It is afterall OUR money.
Carlidan
December 01, 2011 at 1:34am
Don't think ISP really care anymore when they have a monopoly in residental areas in most cases. It's a win win situation for them. I'm so pissed because I switched to Time Warner to avoid what AT&T was doing with data capping. Now Time Warner is thinking of doing basically the same thing. GRRRRR........... So fucking irratated And the problem I have only two fucking options AT&T or Time Warner. Can't get Verizon FIOS even though I know my resident has fiber optics because I can get AT&T's Uverse. Someone needs to start somekind of petiton on this.
stevinp
November 30, 2011 at 9:33pm
If they want to start charging for how much data I use, then lets do the same thing with cable tv.
I don't use the 50 music channels so take that off my bill, oh and by the way Time-Warner Cable, "All" channels are now broadcast in digital, how can you charge me for a "digital tier" still. How about we do a class action lawsuit to make cable "a la carte". Pay only for the channels you want. No pushing those on-demand channels down the pipe unless I want them. That will eliminate a lot of wasted bandwidth.
CaptainFabulous
November 30, 2011 at 8:12pm
My thoughts? I will stop watching TV altogether. There is no chance in Hell I'm going back to cable TV and no way I'm going to pay more for Internet so I can stream. So for guys like me they'll actually lose money. Go ahead Time Warner, just try me...
GenericUsername
November 30, 2011 at 8:02pm
A) Utilities are regualted. ISPs do not want to be regulated like a utility. You can't say you should be able to charge like a utility but not be regulated like one.
B) Utilities have useage meters and show you your useage on your bill. Most ISPs don't do the former and none do the latter. With ISPs it's "You went over. Now pay up. We don't need to prove it, just trust us." Would your electric, water or cell phone company get away with that? Nope.
Slurpy
November 30, 2011 at 7:16pm
So what makes this different from the electrical companies charging you for power used, the water company charging you by gallons used, and cellular providers charging by the minute (or by data transfer)? It seems reasonable to me that customers who use more of a resource should have to pay more for it than others who just barely touch it.
I have no doubt that the ISPs will screw us on rates, because that's just what they do, but it seems like a reasonable overall plan, anyway.
Ghok
November 30, 2011 at 8:00pm
Well, bandwidth is not a resource in the same way water or gas is. While it is "used", it is not something that is consumed or is finite in the same way as a natural resource.
Besides, their business model isn't really a problem as far as I'm concerned. The problem is a lack of competition that prevents me being able to get a fair price. That kind of thing just doesn't really tend to happen with telecoms, as you say. That's the problem. It's gouging. I'm more than happy to pay a little extra for extra bandwidth (though I'd prefer a business model where I pay more for faster speed), I just want a fair price. Luckily where I live, I have an ISP that lets me do just that.
While I agree that is seems like a reasonable overall plan, it's completely different with how the internet has been traditionally offered in the last decade, and the reason for its implementation is to make me pay more to a giant company that makes a lot of money already. I understand why a business wants to wring me for all they can, but it's a problem when a lack of competition means that they actually can get away with it.
jkroeder
November 30, 2011 at 7:47pm
Bits and bytes are not "consumed" like power and water. Aggregate data used is an inifinite resource. A lot of people confuse the terms "bandwidth" and "data". They're two different things. You can't "run out" of data.
People already do pay more if they use more. How? By subscribing to FASTER speed packages. That's how networks and bandwidth is measured. It is the width of the pipe, not the amount of data that flows through it.
Slurpy
December 02, 2011 at 6:33am
The data is essentially an infinite resource, but you weren't paying for the data before, and you won't be now. What you would be paying for is wear and tear on the the network. Data is free, but it costs electricity to transmit. This electricity generates heat, which needs to be whisked away, costing more elecricity. This heat also shortens the lifespan of the equipment, it weakens solder joints and causes atomic migration, which kills transistors and ultimately ICs. And atomic migration is determined by the temperature squared, so if anything, the ISPs should be charging for data on graduated tiers, since downloading 10 GB over 10 minutes costs them a lot more in infrastructure than 10 GB over 10 hours. Just like a progressive tax on the rich, richer, and richest, it's only fair.
Carlidan
December 02, 2011 at 2:06pm
Interesting anology, Slurpy. But the question are they losing money for from "bandwith hogs". There latest excuse for these extra fees is that they want to "punish" people who use too much bandwith at one time, not because they are losing money. They want to be fair too all the customers. If that was really the case. If it was, why don't they back that up with some kind of proof. Hey if it's true, they I will understand then. But I doubt it is either. They just want more profit.
Carlidan
December 01, 2011 at 1:52am
That's what pisses me off, I pay for the service I thought I was getting. But they decide later to change it. And sad part the contract you agree upon let them do it legally.
FreeJet
November 30, 2011 at 5:41pm
Cox Communications has a "data usage allowance" on their high-speed internet subscriptions. They even have a meter you can use to monitor your daily usage. I have the "Preferred Package" and I found out that gives me an "allowance" of 200GB a month. I'm not sure what would happen if I exceed that limit if I were to, for example, stream Netflix all day, everyday. Probably nothing...yet. I've only managed to use a maximum of 175GB or so a month doing what I usually do.
dstevens
November 30, 2011 at 4:21pm
Dosent piping endless streams of an HD channel all night and day long take up more bandwidth than say falling asleep watching a Netflix movie... this is simply anti competative practicing at its best... here's an idea.. lower the cost of your outdated service u nubs. Then you get your market share back... I mean really its simple math.. 140+/mo for cable with movies... and all its shortcomings vs 25? For. Netflix / Hulu combined.... oh and limited if any commercials, and I watch what I want when I want.... stfu cable greedy losers... my guess is that advertisers are pulling their ads to keep with the net viewers %... sucks to fail epically as the cable companies have
jtrpop
November 30, 2011 at 3:21pm
I don't see how this could be legal. Talk about anti-competitive practices.
Carlidan
December 01, 2011 at 1:54am
Oh it's legal. Read the contract when signing to their services. They have to right to change anything when they deem necessary.
tony2tonez
November 30, 2011 at 3:17pm
good thing im using my neighbors connection, wait til he hits the cap faster then he thought! lol
zNelson24
November 30, 2011 at 2:33pm
This is why we need Net Neutrality. These big ISPs that also have video services, and can cut access and charge for services that aren't theirs. AT&T doesn't own YouTube or Netflix, and shouldn't be charging for either.
Carlidan
December 01, 2011 at 1:55am
But we don't want "governement" to take "control" of our internet! ./sarcasm
firefox91
November 30, 2011 at 2:23pm
I have Verizon FIOS service in my area. I pay for both their TV service (albiet the entry level) and internet. I also have Netflix. My family watches both the regular TV and Netflix. If they start capping my data to get me to buy MORE TV service, they are going to find themselves without a customer. Although I doubt this will happen. Verizon has typically been more easy going on these types of things where AT&T and Comcase are always looking to squeeze people.
AntonioGarrison
November 30, 2011 at 1:30pm
I've gone above and beyond my ISP's "Limit" before. They gave me a call to say "Hey you're over your limit of XXGB's this month, if this happens again we will have to charge you X per GB after this month". So I refrained from hosting an MP3 server since then. I have never received a phone call from my ISP, I've had a few myself (even one in Germany for a year) and never told about my excessive bandwidth usage.
My point is that I'm sure this incurred fee for the massive overage on bandwidth would be for people who download GB's upon GB's of data daily. I'm sure a normal user of netflix and hulu won't have a huge bandwidth issue. Now torrenting and filesharing are a great way to burn through that limit. Cable is on its way out anyway. It's overpriced and you're paying for the other 90% of channels that you don't watch. I've upgraded my internet to be able to stream more fluently(it was only $5 more).
It's all speculation as of right now. They can't force you to go back to Cable. Even if my internet bill was to jump up 40$ a month, I wouldn't switch. Cause it would still be cheaper to go with hulu & netflix with the addition charges of bandwidth.
compro01
December 01, 2011 at 7:20am
I'm sure a normal user of netflix and hulu won't have a huge bandwidth issue.
Right, every house only has one person in it.
1 hour per day of netflix HD per person in a 4 person family will blow through comcast's 250GB cap by the 22nd of the month, nevermind the smaller caps of AT&T and others.
Carlidan
December 01, 2011 at 2:02am
The problem is that people will be using more bandwith and consuming more data in years to come. It's not going to decrease. So what they are doing now is setting up ways to gouge more money out of consumers. I don't mind paying extra for bandwith, but don't add other fees on top of it.
draven913
November 30, 2011 at 1:19pm
well thank God I live in Kansas City. Hopefully google is up and running before time warner tries to fuck me!
jonnyohio
November 30, 2011 at 1:18pm
Yeah because lowering prices to become more competive never worked for anyone.
BadCommand
November 30, 2011 at 1:03pm
That's where competition comes in. The area where I am has 2 solid providers (Cox & Century)- both are already competing tooth & nail just to be your ISP. Neither would see caps as a good idea (in this area).
This is why collapsing competition is ALWAYS a VERY BAD idea- you hear that AT&T/T-Mobile?
genghiskhen
November 30, 2011 at 2:58pm
If you have 2 broadband ISPs to choose from in your area you are lucky. Many people do not. When you consider that these ISP monopolies also have monopolies on cable television you start to see how bad the problem is.
dstevens
November 30, 2011 at 4:25pm
I was under the impression that monopolies were illigal in the USA... didn't the gift try to tux with microshit over something like that? What's wrong with the world where everything is so backwards now.?
Slurpy
November 30, 2011 at 7:10pm
Thanks to Teddy Roosevelt, we got about 20 years of nearly-monopoly-free America, which is better than we could have expected. Then the government got heavy-handed again, and started approving their government-supported monopolies, like utilities, FCC bandwidth delegation, mail delivery, and public transit.
jonnyohio
November 30, 2011 at 1:21pm
Wish it was like that here...Time Warner is the only one allowed to provide services where I live so their only competition is dish and directtvwhy and dsl for Internet. Somehow I think that if there was competition there wouldn't even be an article about this.
zepontiff
November 30, 2011 at 12:56pm
More and more I start thinking that I'm going to start "kicking it old school" and just read and have a radio in my living room. Start hunting and fishing more. Fuck everyone.
CaptainFabulous
November 30, 2011 at 8:16pm
Yeah, I think I'm with you on this. Fuck 'em. Not much worth watching on TV anyway.
jakejules
November 30, 2011 at 12:53pm
We just defeated this bullshit in Canada.
A massive show of nerd power overturned the CRTC's (along with Bell, our friendly telecom monopoly) attempt to implement UBB (usage based billing).
If you're interested: http://openmedia.ca/news/regulators-pull-back-usage-based-billing-after-half-million-canadians-speak-out
mivanc
December 01, 2011 at 8:52am
That we did. I think it was a small victory, the fight ain't over. With the new model, we'll see a rise in prices of independant ISPs.
I switched to an independant ISP and saved 10$ a month and gained 240 GB of bandwith per month.
The same day, I switched my Netflix quality from low(SD) to high (HD). What a difference!
I also play games off STEAM. I had to wait 2 weeks once because I would have gone over the limit if I had downloaded a game.
If a small number of Canadians were able to fight against the big telcos, I have no doubt our neighbors to the south can make it happen as well.
ashinms
November 30, 2011 at 12:49pm
This kindof bullshit makes me sick to my stomach. It doesn't take that much money to send information. It's just like gas prices, nothing more than some greedy bastard trying to line his pockets.
warptek2010
November 30, 2011 at 11:25pm
You can add cell phone usage to that as well. Why are we paying these $40 to $90 bills per month for just 1000 minute plans? Why not pay $40 a month for unlimited useage? It's just data packets bouncing off a repeater tower, it's not like they have to keep creating some invisible ether to keep things working.
grinbills
November 30, 2011 at 1:43pm
For those of you curious to who really gets all that money you're paying per gallon of gas:
http://www.dailymarkets.com/economy/2011/04/27/gasoline-taxes-vs-exxon-profit-per-gallon/
On a related note to the actual story - the cable companies are banking on people not wanting to sacrifice the convenience of broadband altogether. If we want to take a stand on this, we have to be willing to sacrifice that convenience. If these companies see people switching services or dropping them completely, they'll take the reduced profits over none at all, or better yet, find ways to compete with Netflix, Hulu and the like at a similar price point. "What!" you say. "I won't be able to play MW3 on Xbox Live, PSN or Steam without my broadband!" And now we have finally approached what it means to sacrifice. Our lives are so hard.
chart2006
November 30, 2011 at 12:49pm
Anyone interested in joining me in an antitrust suit against ISPs for actively engaging in anti-competative behavior???
Typo91
November 30, 2011 at 3:32pm
I'm in orginaize a group or something on facebook. Get a we need a some lawyers and shit
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