Policy + charging

Mediacom Unleashes Usage-Based Broadband

Mediacom Communications Corp. is the latest U.S. ISP to join the usage-based broadband club and will begin to charge some customers extra if they exceed a new set of monthly consumption thresholds.

Mediacom will charge customers $10 for a bucket of 50 gigabytes when they gobble up more than their monthly allowance, which varies by the level of service they subscribe to. The policy took effect on Aug. 1, a company spokesman confirmed.

On the high end, Mediacom's monthly limit on its 50Mbit/s and 105Mbit/s (downstream) Docsis 3.0 tiers is 999GB per month. On the low end, its 3Mbit/s Launch tier comes with a 150GB-per-month limit. According to DSL Reports, the first to report on the new policies, Mediacom has also affixed a 250GB soft cap on its Prime tiers (12Mbit/s to 15Mbit/s) and a 350GB limit on its 20Mbit/s Prime Plus service.

Mediacom's new policy applies only to new cable modem customers and existing ones who opt in for it, the spokesman said, noting that the company's average Internet customer consumes about 31GB per month, "so we do not anticipate this having much impact on customers."

Existing customers who don't opt in will still be subject to a hard, monthly 250GB cap on excessive use that's been in place for a while. About 98 percent of Mediacom's broadband customers haven't come near it. Mediacom, the eight-largest incumbent U.S. cable operator, had about 887,000 broadband subs as of March 31, 2012.

Why this matters
It's clearly open season for cable operators and other broadband ISPs to start introducing new usage-based pricing and move away from hard caps. Time Warner Cable Inc. (NYSE: TWC), AT&T Inc. (NYSE: T), Suddenlink Communications and most recently, Comcast Corp. (Nasdaq: CMCSA, CMCSK), have launched or are now testing usage-based pricing models that are striking fear into the hearts of Netflix Inc. (Nasdaq: NFLX) and other over-the-top video service providers. (See Comcast Turns On Usage-Based Broadband.)

Among those examples, Comcast is testing a policy in Nashville, Tenn., that also charges $10 for an extra 50GB of data once customers go beyond a 300GB limit. And in the vein of Mediacom's new approach, Comcast is also planning to test a model that raises and lowers the monthly ceiling based on a customer's level of service. (See Netflix Fears by-the-Byte Tiers .)

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— Jeff Baumgartner, Site Editor, Light Reading Cable

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