Rogers Takes Internet Meter to the Masses
Whether you agree or disagree with recent moves by U.S. cable operators toward consumption-based Internet business models, it's becoming clear the genie is out of the bottle.
Among larger MSOs, Time Warner Cable Inc. (NYSE: TWC) is taking its first stab at it in Beaumont, Texas, while Comcast Corp. (Nasdaq: CMCSA, CMCSK) is mulling over a more generous model that would cap consumption at 250 gigabytes per month.
BendBroadband , a smaller operator in Oregon, has introduced a usage allowance of 100 gigabytes per month, charging $1.50 per gigabyte beyond that limit. Insight Communications Co. Inc. , meanwhile, has no current plans to deploy a usage-based model but has left the door open, according to a recent blog entry by Insight's CEO, Michael Wilner.
But if you're wondering which North American cable operator is leading the way, look no further than Canada's largest MSO, Rogers Communications Inc. (NYSE: RG; Toronto: RCI). As other operators develop models of their own, it's likely that they'll study the Rogers model closely and even steal an idea or two.
Rogers, which has about 1.5 million cable modem subs, initially launched an "additional use" policy (a cap of 90 gigabytes, and $1.25 per gigabyte after that) more than a year ago for its high-end, 18-Mbit/s Extreme Plus tier.
In July, following a three-month grace period, the MSO will begin enforcing a new consumption-based model across its entire high-speed Internet customer base, with different data volume caps and charges for its various Internet access packages. That new model includes a small rise in the usage limit for the MSO's Extreme Plus users, who will be able to consume 95 gigabytes of data as part of their monthly subscription package.
Although Rogers will charge its broadband users for any bandwidth consumed beyond their allotted threshold, the operator has built in a $25-per-month limit for additional payments.
"We are moving quickly from one tier and from a concept to full implementation across the entire base," says Phil Hartling, the MSO's consumer market VP. "It's a natural evolution of the [service] category, and one that treats customers fairly. It's a critical step for ISPs."
The table below outlines the new Rogers policy and how it stacks up for most of its customers.
Table 1: 'Additional use' rates for live billing*
|Extreme Plus||95 GB||$1.25||$25.00|
|Grandfathered** Lite||60 GB||$2.50||Unlimited|
|Ultra Lite||2 GB||$5.00||$25.00|
|Grandfathered** Ultra Lite||60 GB||$5.00||Unlimited|
|* Starting July 3, 2008 |
**Customer qualifies if signed on prior to Jan. 14, 2008
Source: Rogers Communications
Customers who signed up for the operator's "Lite" or "Ultra Lite" cable modem service tiers before January 14, 2008, are "grandfathered" into the MSO's initial consumption levels. That means that they are given a higher threshold than those who have signed up since January 14. Those "grandfathered" customers will have a larger allowance, but won't get the benefit of the $25 ceiling. To Page 2