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Cable Fears Congestion, Not Cord-Cutting

Mari Silbey
7/31/2013

Communications service providers (CSPs) are more concerned about the impact that over-the-top (OTT) video traffic will have on the capacity of their networks than the prospect of losing customers to the streaming Web video services, according to the results of a recent multinational survey conducted by Incognito Software Inc..

And the most popular tactics for fighting back against network congestion? Bandwidth caps and fair-use policies.

Incognito surveyed 65 broadband providers from around the globe, mostly cable operators and predominantly from the Europe, Middle East, and Africa (EMEA), Latin American, and North American regions. A whopping 86 percent said they did not view cord cutting as a major threat, but many were concerned about the flood of video on their networks.

While most operators (more than 80 percent) have already upgraded their infrastructure to deal with greater traffic volumes, they are also wielding other weapons in the war against bandwidth overload. In Latin America and North America in particular, operators cited usage caps and fair-use practices -- where speeds are throttled for high-consumption subscribers -- as their methods of choice for dealing with congestion.

Although the Incognito study included a high representation of small and mid-sized operators, the conclusion about bandwidth caps falls in line with recent activity from America's second largest cable provider, Time Warner Cable Inc.. Time Warner is now offering discount incentives to some subscribers if they agree to a plan with a usage cap. (See TWC Rethinks Its Broadband Strategy.)

Meanwhile, in good news for consumers, the Incognito survey did find that many service providers are also considering other options for competing against OTT services in the future. Some will offer premium features such as unlimited streaming to generate new revenue, while others (mainly in Latin America) plan to create their own proprietary OTT offerings.

— Mari Silbey, Special to Light Reading Cable

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sam masud
sam masud
8/1/2013 | 3:10:42 PM
re: Cable Fears Congestion, Not Cord-Cutting
Bottom line--when the competition gets tough, try squeezing the customers. I agree with Ray below that CSPs will lose subs while OTT traffic will grow.
Ray@LR
[email protected]
7/31/2013 | 3:13:55 PM
re: Cable Fears Congestion, Not Cord-Cutting
Of course, there is the double whammy that the CSPs lose a whole load of subs AND have their networks swamped by OTT traffic... the 'good ol' days' are certainly long gone.,
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