October 6, 2011
Suddenlink Communications has posted a new "allowance plan" for residential cable modem customers that caps monthly data consumption and starts charging extra if they exceeds those limits for a third time.
The new policy, which has been rumored to be coming, applies only to residential Internet accounts and has yet to go active in all of Suddenlink's markets. Suddenlink wouldn't reveal its rollout plan, but noted that customers will be informed as the policy goes active on a market-by-market basis. (See Suddenlink to Fit Broadband Caps, Overage Fees .)
Here's how Suddenlink breaks out monthly usage limits by speed tier:
If the max advertised download speed is�
The monthly usage allowance will be�
Compared to an average monthly usage of�
Less than 10Mbit/s
Between 10Mbit/s and 20Mbit/s
Greater than 20Mbit/s
Customers who exceed their consumption limits more than twice are subject to a fee of $10 for every 50GB consumed above the ceiling.
But Suddenlink hopes it won't come to that. On the first overage, customers' Web browsers will be directed to an MSO notification page, where they will be asked how they want to receive future notifications (via the Web browser or by e-mail).
After that, customers will be notified if their account reaches 80 percent of their monthly allowance and again when it exceeds 100 percent. They'll be hit with overage fees if they exceed the cap again.
Suddenlink insists that "very few" (1 percent or less) of customers consume more than their monthly allotment based on historical data. Customers can track usage via a meter that's updated daily. The MSO also won't allow customers to rollover unused gigabytes to the next month like some cellphone plans allow.
Why this matters
Suddenlink is one of a small group of U.S. broadband service providers to launch a policy that combines consumption caps with overage fees, something that is commonplace in Canada. AT&T Inc. (NYSE: T) has also pushed ahead with a cap-plus-overage-fee policies.
Other U.S. ISPs are expected to follow with similar policies amid a new set of Federal Communications Commission (FCC) network neutrality rules that allows them. Some MSOs, such as Comcast Corp. (Nasdaq: CMCSA, CMCSK), have opted to apply "excessive use" ceilings without overage fees, but customers who exceed them repeatedly without upgrading to business-class tier or implementing some other MSO-approved remedy run the risk of having their service switched off.
Read more about bandwidth caps.
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