Analyst: ISPs preparing to introduce usage-based billing

By on November 30, 2011, 4:30 PM

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.




User Comments: 20

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ramonsterns said:

It takes me an hour to watch a 20-30 minute show, with ads interrupting every 10 minutes or so for 10 minutes.

Then they wonder why no one wants to pay for cable.

Raswan Raswan said:

ramonsterns said:

It takes me an hour to watch a 20-30 minute show, with ads interrupting every 10 minutes or so for 10 minutes.

Then they wonder why no one wants to pay for cable.

On what channel are you watching tv? Standard 30-minute shows are 22 minutes with 8 minutes of commercials. Hour-long shows are 42-3 minutes, plus commercials. Let's try not to be hyperbolic if we can help it, mmmk?

ramonsterns said:

Raswan said:

ramonsterns said:

It takes me an hour to watch a 20-30 minute show, with ads interrupting every 10 minutes or so for 10 minutes.

Then they wonder why no one wants to pay for cable.

On what channel are you watching tv? Standard 30-minute shows are 22 minutes with 8 minutes of commercials. Hour-long shows are 42-3 minutes, plus commercials. Let's try not to be hyperbolic if we can help it, mmmk?

I only watch the Walking Dead on TV and that usually runs a straight hour.

thatguyandrew92 said:

ramonsterns said:

Raswan said:

ramonsterns said:

It takes me an hour to watch a 20-30 minute show, with ads interrupting every 10 minutes or so for 10 minutes.

Then they wonder why no one wants to pay for cable.

On what channel are you watching tv? Standard 30-minute shows are 22 minutes with 8 minutes of commercials. Hour-long shows are 42-3 minutes, plus commercials. Let's try not to be hyperbolic if we can help it, mmmk?

I only watch the Walking Dead on TV and that usually runs a straight hour.

Most hour long shows on tv only have about 42 minutes of of the show, with about 18 minutes of commercials.

Guest said:

Cable prices are crazy for one. Every channel i want i have to buy a bundle of crap i dont want with it, and I dont think I should have to pay to watch commercials.

Guest said:

Hopefully the upcoming competition from Google, Sonic.net, BPT and other fiber optic service providers will make them rethink that strategy.

gwailo247, TechSpot Chancellor, said:

And people made fun of me for downloading everything on the planet. I knew this day would come.

H3llion H3llion, TechSpot Paladin, said:

gwailo247 said:

And people made fun of me for downloading everything on the planet. I knew this day would come.

Haha! xD no.1

Share it with us pls pls.

Guest said:

So instead of providing a better service or lowering cable prices so people stay, companies will charge more for using a service. This is why the Occupy movements are happening, companies tend to look at consumers as live stock and want to suck them dry, instead of providing services or goods that people want at a reasonable prices. One model is a giving model, give good services and your reward is profit, the other model is take as much money as you can from people while giving the least.

amstech amstech, TechSpot Enthusiast, said:

I like this.

I only use my roadrunner for a couple hours a night but the world is full of basement rats downloading 24/7.

Guest said:

It is still better to pay for what you want to watch instead of 100 channels of garbage and most of what I watch is ad free.

Muggs said:

We can solve this problem just dissolve all the local monopolies that exist in this country. I would love to tell timewarner to take a hike but they are my only alternative.

tehbanz tehbanz said:

amstech said:

I like this.

I only use my roadrunner for a couple hours a night but the world is full of basement rats downloading 24/7.

Why so harsh? some people just like the web more than you! That doesn't make said person a "basement rat", besides - no one should be FOR this. This is just extortion at it's finest, instead of charging more for shit why not just make a better product??

Another user hit the nail on the head saying "Every time I buy a channel i have to buy loads I don't want" Hell if i could buy 4-5 TV channels for $20~30 a month i definitely would. All i watch is nick, cartoon network, AMC, Discovery. Why do i have to pay 89~100 just to watch these three channels? just for that reason alone i "Cut" my cable and watch my shows online now. I'm sure most people have those 5-6 channels they watch, cable providers could take advantage of this and charge like $3~5 dollars a channel.

anyway sickbeard FTW!

Guest said:

See the problem is they cap the little guy...If it was really about the large downloaders how about just knock them off...Like a cap of 500GB or something realistic...But no they will make a cap of 20GB a month and tell people that's plenty for normal surfing and we are just stopping the big downloaders..Bull Crap! These companies brain wash people into thinking that giving them less is some kind of benefit... Ahhh I remember the days when you actually got more over time not less..Seems like that's the way of the world anymore Give you less and less while charging you more but making you think things are better Wake up people resist all this BS!

Guest said:

there is no bright side to this for the consumer. no one will see a drop in pricing.. the least you'll pay is what you are already paying... or more... plus whatever penalty the cable company wants to pile on you as 'overage'. we need more competition in the broadband world.

Renrew Renrew said:

Why is everybody complaining?. The airlines are doing to you on every flight and are raking in billions..

Every corporation that thinks they'll get away with it, will follow suit.

Guest said:

20gb allowance ha.....game you download around 10-15Gb nowadays downloading blueray or HD content 10Gb+ so 1 game, 1 movie a month no online play or browsing the internet thats just for one person....say your household has 4 laptops, desktop and 2 gaming consoles outrageous......luckily im in uk with virginmedia 100Mb line truely unlimited but little traffic management in peaktimes on news groups and p2p. One day everyone will be able to connect to each other for free no isp required with no speed caps all service inc tv, internet, phone, mobile etc in one mass free network.....Ohhhh think i was daydreaming not a chance when there is profit to be made.

penn919 said:

This is really going to screw online gaming services especially OnLive.

Guest said:

The ISPs that go forward nickle & diming customers may improve their bottom line in the short term, but ultimately it will be their undoing. It's a dying business model that no customers like. People want content without worrying about bandwidth & usage. Eventually a new competitor will deliver and wipe the field clean of the pestilence that is the baby bell telcos and archaic cablecos. In the meantime we will suffer so that CEOs can sit in their ivory tower pocketing millions for spewing crap out of their mouths.

Zecias said:

renrew said:

Why is everybody complaining?. The airlines are doing to you on every flight and are raking in billions..

Every corporation that thinks they'll get away with it, will follow suit.

doing what? and by saying "every corporation thinks they'll get away with it, [and](i'm assuming this is what you meant, but your english isn't very good. correct me if i'm wrong) will follow suit", you are contradicting your own point.

ie: every corporation think they'll get away with it, but by complaining and refusing their services we will stop that yes?

Also, just because other corporations are ripping us off even worse, it DOESN'T mean that we can't complain. Regardless of how badly we are being ripped off, we are still being ripped off which gives us a right to complain.

On the article:

Switch to your local ISPs to put these greedy bastards out of business.

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