ISPs May Institute Usage Fees To Counteract Streaming Video Surge

Brad Chacos

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.


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