Analyst: ISPs preparing to introduce usage-based billing

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As cord-cutting becomes more difficult to deny, cable companies are seeking methods to preserve profits. According to a Bloomberg report, several major providers will soon introduce to adopt plans that charge customers for the amount of bandwidth they consume. Along with squeezing more cash out of heavy Web users, usage-based billing could potentially discourage some people from abandoning their pay TV subscription.

Usage-based billing has been on the table for years and although it's been implemented across many mobile services such as AT&T and Verizon, it's less common to see with large US wired broadband providers. Even Comcast, which is notorious for its 250GB residential cap, doesn't really offer metered bandwidth or overages. Rogers, Canada's largest cable company, has been charging customers by usage since 2008.

According to analyst Craig Moffett, Time Warner, Cox and Charter are the most likely US firms to bill customers by their consumption, and at least one of them is expected to take the plunge by next year. "As more video shifts to the Web, the cable operators will inevitably align their pricing models," Moffett continued, noting that usage-based billing would allow cable companies to embrace the shift toward Web-centric media.

Bloomberg's write-up comes only weeks after Sandvine's Fall 2011 Global Internet Phenomena Report, which showed that Netflix represents 32.7% of all North American peak fixed access downstream traffic. BitTorrent, YouTube, Xbox Live, Flash videos, iTunes and other entertainment avenues also made Sandvine's top 10 traffic list. Much of that bandwidth is destined for TVs -- be it directly to smart TVs or through a set-top box.

ComScore released its usual monthly video statistics this week, showing that 184 million US Internet users watched an average of 21.1 hours of Web video during October. The total audience viewed 42.6 billion videos -- an all-time high. Unsurprisingly, a majority of that activity occurred on "Google Sites," which includes YouTube. Hulu ranked ninth in total unique viewers, but was second only to Google in minutes per viewer.

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