Cable companies are behaving as if the flat fee for Internet access will soon be a dinosaur. Although there has been a retrenchment in some offerings, this is only skirmish in the battle. The cable companies will try again.I am not a gamer nor do I download movies yet, but I do not want to be restricted in my usage. I do send and receive large files, mostly PowerPoint and PDFs as part of my business. I also deliver many webcasts. The files continue to grow larger, so I am concerned about caps placed on my usage. I also plan to increase my Unified Communications applications, especially video conferences with my clients. Once caps are common in consumer Internet access, then the caps will be implemented for business Internet access.
I have found caps that are daily, 3Gbyte per day and others that are monthly, 10Gbyte, 20Gbyte.... So I did some math to see what these caps mean. Assume you have T1 access at 1.5 Mbps which is theoretically 187,500 bytes per second. A 3Gbyte cap means that I would reach that cap after 4.5 hours of transmission in one day. A 10Gbyte monthly cap would take about 15 hours of transmission to reach in a month. A 100-Mbps subscriber would reach a 10Gbyte cap after approximately 2.5 hours of transmission in one month.
Time Warner Cable (TWC) set up a trial for capped usage. It is stopping the trial because there has been a considerable backlash from the customers. The charges were $1 to$2 per gigabyte when transmission exceeded the cap.
Glenn Britt, CEO of Time Warner Cable issued a statement (emphasis added):
It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met. While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process.
TWC thinks there is a need for customer education on the subject of caps. Then this means TWC will probably reintroduce the caps at a later time. They will not give up.
Wave Broadband (serves Washington, Oregon and California) instituted a 3Gbyte per day cap in January 2009. The result is that 10-Mbps customers are throttled back to 1.5 Mbps or slower when they exceed the cap. What makes this problematic is that section 7 of the Wave Broadband service agreement is not specific on the quantitative measure of the caps.
I agree that Wave Broadband or ISP may change the throughput, consumption, and other applicable limits of any tier(s) by amending the price list or Terms of Use. My continued use of the HSD service will constitute my acceptance of any new limits. I also agree that Wave Broadband may use technical means, including but not limited to suspending or reducing the speed of my service, to ensure compliance with these limits and the Terms of Use, and that Wave Broadband or ISP may move me to a higher tier of HSD service or impose other charges and fees if my use exceeds these limits.
This vagueness is common to the service agreement or acceptable use policy of the ISPs, leaving customers to learn of the limits AFTER they are penalized.
Cogeco of Canada has introduced caps even though they observed the backlash that TWC encountered. The caps introduced are:
* Lite subscription--10GB/mo cap, $2.50 per GByte over the cap to a maximum of $30
* Lite Plus subscription--20GB/mo cap, $2 per GByte over the cap to a maximum of $30
* Standard subscription--60GB/mo cap, $1.50 per GByte over the cap to a maximum of $30
* Pro subscription--100GB/mo cap, $1 per GByte over the cap to a maximum of $50
* Lite Plus subscription--20GB/mo cap, $2 per GByte over the cap to a maximum of $30
* Standard subscription--60GB/mo cap, $1.50 per GByte over the cap to a maximum of $30
* Pro subscription--100GB/mo cap, $1 per GByte over the cap to a maximum of $50
The introduction of metered billing started in Canada last year when the Canadian carrier Rogers began enforcing caps ranging from 2 to 95GBytes. Users who subscribe to the lowest tier service incur overage charges of up to $5 per gigabyte.
Charter Communications is another entry into caps enforcement. Their acceptable use policy has been changed. It appears that subscribers to 15-Mbps or less service will have a monthly cap of 100 Gbytes. Those with higher speed access will have a cap of 250 Gbytes. Some suspect that initially the caps will not be strongly enforced. I think that Charter is waiting to see what the customer reaction will be to the caps.
The cable industry is making more money and experiencing lower costs. So what is driving the cable companies? Some suspect that with the companies instituting the caps, the customer will be reluctant to download movies, e.g. from Neflix. A movie can be anywhere from 1 to 4 Gbytes depending the quality and extras that are found in many DVDs. At that rate, a 100 Gbyte cap is reasonable. But there are caps of 5, 10 and 20 Gbytes out there. Downloading a movie may cause my other accesses, for business or social networking, to incur extra charges. As I consider UC, I believe that the lower caps will force many customers to avoid movie downloads or move to the more expensive business access. In either case, the cable companies win with more revenue.
This topic has generated enough responses to involve Senator Charles Schumer of New York. Schumer is against the caps as set by TWC and spoke to them directly, which convinced TWC to abandon the caps charges. A website, www.stopthecap.com is a place to look if this subject is of interest to you. It has a great deal of news demonstrating that ISP caps are becoming a major issue.
