Charter Tries On Consumption Caps
Charter Communications Inc. has confirmed a report that the MSO will soon impose monthly Internet usage caps on certain customers.
Under the new scheme, Charter will apply a monthly 100-gigabyte ceiling on customers who subscribe to a service tier with speeds up to 15 Mbit/s, and a 250GB cap on packages that provide download speeds between 15 Mbit/s and 25 Mbit/s.
Charter is not imposing a monthly usage ceiling on a new Docsis 3.0-fueled 60 Mbit/s tier, according to MSO spokeswoman Anita Lamont. Charter recently launched the wideband service in some neighborhoods of St. Louis, Charter's corporate hometown. (See Charter Takes On U-verse .)
Lamont notes Charter will notify customers directly via several means (including email, phone, and postal mail) if they exceed the cap and it "becomes an issue." Those customers will be given multiple warnings before service is suspended. Charter has yet to adopt an on-screen meter that shows customers how much capacity they've consumed during a given month, but customers are clearly free to use applications available on the Web from third parties.
Charter doesn't expect many customers to be affected by the new policy. "More than 99 percent of Charter Internet customers" consume less capacity per month than the new limits will allow, Lamont says.
Charter will flesh out the new rules in more detail when it publishes a revised Acceptable Use Policy on Monday (Feb. 9). Light Reading will try to get Lamont to send us an autographed copy.
Although Charter is the latest MSO to impose a new consumption-based Internet policy, the company has foreshadowed such a decision. In late December at the CableNEXT conference in Santa Clara, Calif., Charter CTO Marwan Fawaz said all-you-can-eat Internet business models are not sustainable as speeds increase and traffic, including more based on video, continues to surge. "Eventually, we will go to a usage-based solution," he predicted. (See Paying by the Pound .)
With the new policy, however, Charter is only part of the way to the vision foretold by Fawaz. That's because two different approaches to this issue have emerged: hard, relatively large monthly caps designed to reign in "excessive use," and a more metered approach that gets built into the cable modem service's revenue model.
Charter, like Comcast Corp. (Nasdaq: CMCSA, CMCSK) and its 250GB threshold, has developed capping policies designed to keep power users in check and suspend service if customers repeatedly exceed the consumption ceiling. (See Comcast Draws the Line at 250GB.)
On the other side of the spectrum, operators such as Rogers Communications Inc. (NYSE: RG; Toronto: RCI) and Time Warner Cable Inc. (NYSE: TWC) have deployed or are testing metered approaches that charge extra once customers exceed given consumption levels. (See Rogers Takes Internet Meter to the Masses and TWC Tees Up Metered Internet Trial .)
TWC has been chided for what some consider to be a less-than-generous meter policy it's testing in Beaumont, Texas. But, the MSO, which expects to use consumption-based billing in at least four more systems this year, plans to introduce a range of metering tiers that aim to accommodate different types of Internet users. (See TWC Tees Up More Meters .)
— Jeff Baumgartner, Site Editor, Cable Digital News