Is Metered Broadband Designed To Keep You From Ditching Cable TV?

Om Malik is beginning to suspect that “metered broadband” may be less about bad, evil P2P and more about competing video download services.

Stacey crunched the numbers yesterday and came up with an interesting conclusion: If you bought the monthly 15 mbps/40 GB transfer option for about $56 a month, you’d get about 40 hours of standard definition video along with enough bandwidth for your normal browsing and surfing habits. That’s just over 75 minutes of SD Internet video every day – two or three shows at best – which means you might need to continue buying the “video connection” in order to watch more television. Sure you can slice and dice the data transfers with other online activities, but this is all about video.

How close are you to ditching cable and watching all your shows online or through a “Netflix box?” Are you already there? Is cable the new “land line?”

Why Tiered Broadband Is the Enemy of Innovation [GigaOm](Thanks, Henry!)

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  1. crabbyman6 says:

    Vindicated [consumerist.com] johnva and I had this same idea in a previous post, now it looks like there are actual numbers to show it.

  2. CaptZ says:

    Who did not realize this? I stated in the other thread that the networks and Netflix has a business model to stream over the internet. Of course it is for competitive reasons. They don’t want the networks and Netflix to encroach on their turf. Did you really think this was about bandwidth? Posh…..this is all about the bottom line for the cable companies.

    This will not go well for them either way.

  3. Well, my basic cable is $17/month and gives me $10 off my broadband through Charter. So for a net of $7 a month I get network tv plus Discovery, no antennae needed. Not worth ditching…yet.

    We’ve been experimenting with Netflix streaming lately and have been impressed. Not sure I’m ready for a Roku box yet (we use the laptop hooked up to the TV and receiver)

  4. mycroft2000 says:

    I haven’t had cable or satellite for 10 years, and I don’t miss it one bit. If I hear that a show’s worth watching, I’ll wait for the season to end and rent the DVD’s. I always find it amusing in personal finance stories in the newspaper when people list cable as a “necessity.”

  5. HeartBurnKid says:

    Of course it is. You don’t see DSL or fiber connections getting metered, do you?

  6. Well, it sure got me to ditch VoIP…and Time/Warner as well. I’m not sure if my Internet was metered or not, but it sure was limited by their utter inability to keep the damn thing on on a consistent basis. Usual scenario has three flakes of snow falling at 34 degrees, followed by the going out altogether – no cable, no Internet, no nothing. Calling it in, they naturally blame the weather, then offer to schedule me for a service call – in two weeks.

    Verizon DSL and DirecTV FTW!

  7. Rippleeffect says:

    This is no different than a burger chain charging me extra for pickles or cheese, but not giving me a break when I ask for no onions or tomomatoes.

    This is only to serve the company’s bottom line and won’t provide better support to the customer.

  8. Underpants Gnome says:

    Makes sense, Comcast is charging $7 for an on-demand HD movie now, so they don’t want me downloading one from a competitor for cheaper, at least not with getting their hands on a piece of the pie first.

  9. JasonKeiderling says:

    I already cancelled cable and use the internet for all my television activities. I use the site [www.free-tv-video-online.info] for most of my television and movie viewing. I use thw site [www.ovguide.com] which is a guide to sites such as the first one if the first site doesn’t have what I want and I want to look for one that does.
    Also, thanks to the transition to over-the-air HDTV, I can receive digital quality over-the-air signals from my antenna. The advantage to HD broadcast signals is that if you pick a signal up, you’ll get a perfect quality picture. Since all broadcast signals either are already or will be HD by next February I say forget about installing a satellite dish and install a roof-top antenna. Maybe it’s time for roof-top antenna’s to make a comeback! The only down side to that is you might need to actually enter a Radioshack and put up with their terrible customer service to buy one, since I don’t know anyone else who still sells them.

  10. Trai_Dep says:

    @crabbyman6: Same here. And people called me a paranoid hater. Sigh.
    Dangers of conglomeration people. Companies or a raft of services into one.

  11. bohemian says:

    Of course this is. Our broadband is $35 a month, basic cable is about $55, with digital being another 10-20 and so on. They charge more for the basic services and less for the add ons. They don’t want people ditching their TV service.

    The irony is that cable TV is a lousy value. Hundreds of channels of utter crap in order to get the 10 you watch.

  12. JasonKeiderling says:

    @JasonKeiderling:I forgot to mention. If you watch TV on one of those websites, you’ll probably want to run an S-video connection to your TV. If you do, use Fn+f4 (on windows) to make your TV the primary monitor so you get full screen.

  13. Trai_Dep says:

    @JasonKeiderling: And, OTA DTTV signals have much higher bandwidth (better picture). Win/win!

  14. GMFish says:

    I’ve been saying this for years. That’s because ISPs in the US are not independent and have built-in biases to kill true broadband. Our cable ISPs will try to kill IPTV and our telephonic ISPs will try to kill VOIP.

    This is why I was hoping that internet over powerlines would succeed, because power companies have no such biases.

    And it’s also why most other countries have better broadband than the US. There is simply no way that cable or telephone companies will allow the type of broadband available in Sweden, Japan, or Singapore. Their gravy trains would end.

  15. @Underpants Gnome: @Underpants Gnome: Best. Handle. Ever.

  16. GriffonJames says:

    Just to clear up a misconception. The transition to digital next year does not mean that all over-the-air transmissions will be HDTV. All television broadcasts will be digital in either Standard Definition (SDTV) or High Definition (HDTV).
    [www.fcc.gov]

  17. tastybytes says:

    yeah.. this is old news.. that net neutrality NEEDS to get passed. the companies are using their control of one service to “persuade” you to use their competing service because you will not incur additional fees. it is not cost effective to cancel cable, because if i watch TV over the internet, i now have to pay extra for going over my download limit..

  18. JasonKeiderling says:

    @GriffonJames: That still works for what I suggested. As long as the transmissions are digital you will get a crsip-clear picture if you get one at all. It’s just a bonus that some will be HD.

  19. Gann says:

    @JasonKeiderling: Thanks for the urls, next month I’m cancelling as well. Cable = worst entertainment value on the dollar possible, except for maybe self destructing DVDs.

  20. Franklin Comes Alive! says:

    @tastybytes: Problem is, this has nothing to do with net neutrality. If they were physically limiting your ability to access TV shows, but nothing else, that would be in violation of the spirit of net neutrality. Under this system, all data is still treated equally, you just have a limit on how much you can get.

  21. trogam says:

    Never thought I’d actually say Net Neutrality needs to be implemented with no strings attached…but…
    Can you say…Monopoly?

  22. crabbyman6 says:

    @Franklin Comes Alive!: Exactly, this is a loophole that I doubt anyone really expected. Who would have expected them to gimp their whole network just to limit something’s growth, but then again these are the cable companies so its not a shock. If they slow everything down then its neutrally craptastic to every packet type, not just TV or P2P. There’s really not much anyone can do to fight this unless the government steps in, the providers will rule their own cables and the services will suffer for it.

  23. sljepi says:

    I am already there – my Roku/Netflix box is comming in 3 days and i am canceling classic cable. I will retain basic cable – 13 channels.

  24. battra92 says:

    I’m debating on turning in my HD box ($7 a month) to Time Warner since I never watch it. The rest of the household loves cable so I can save at least $84 a year this way. Not a lot but meh, every little bit helps.

    Now if I ditched the HD box, Starz, HBO and Encore I’d save $31.57 but seeing as how it’s part of my rent, I can’t really make those decisions.

  25. Trai_Dep says:

    @Franklin Comes Alive!: You’re correct, of course. Tho I bet that this issue would get swept under any Net Neutrality provisions, since it’s the same beast, slightly different color. Err, hopefully.

  26. bohemian says:

    We have been looking into ways to cut the cord with cable after they jacked our bill to $169 a month. We also are not beneath going back to DSL from the phone company if they start crippling our broadband.
    With a long range HD/UHF/VHF antenna in our garage we can get broadcast TV from three states including PBS from 4 states, two of those do the multiple channels thing so we would have 8 PBS channels of content. With a cheap ($200) Free to Air 30in dish we could get more network, more PBS, News backhauls, NASA TV, G4 and a ton of international channels.
    If we want to spend about a grand we could get a big dish and have everything we want for about $30 a month.
    That is without digging into internet TV.

  27. Gokuhouse says:

    The government will charge consumers tax on goods and services that other companies are providing…The cable companies are charging more money through metered bandwidth because they can’t get their minds wrapped around the idea that they should really offer a new service to compete with other companies, not just charge them more trying to force them to keep an out dated service like cable TV. Does anyone else see how cable companies are acting more and more like government? At the very least the government organizes a military to protect this nation.
    Maybe I’m just dumb(and that could be the case) but shouldn’t a company try to offer goods and/or services that their customers would like? Ala-cart cable would be awesome. So would having the ability to buy a certain amount of upload and download speed. I don’t need 8 Mbps download most of the time…if I could I would go down to 2 or 3 and increase my upload a little to save some money. BUT I can’t do that with my cable company.

    Okay, I’ll get off the soap box for now.

  28. Heresy Of Truth says:

    We just ditched cable because we have Broadstripe at the apartment. Broadstripe preformed the miracle of making me wish for Comcast again.

    We are going to move this month to a Comcast area, and will get the full package deal, until the deal runs out. Then it will only be internet. Cable TV sucks. I watch free shows on Archive.org, Hulu.com, and Netflix. That’s a better deal than paying for hundreds of channels of crap programming.

  29. alyssariffic says:

    Where I live the only provider I’ve found has basic cable packages at around $60. For $15 and the cost of internet (which I’d be paying anyway) I just get Netflix and watch online. If you haven’t looked, you’d probably be surprised at the variety of shows available on the internet. When I started it seemed like there was just The Daily Show and Colbert report online, and now there’s a lot more. Living without cable is easy. If it were < $20 I think myself and my roommates would get cable, but at 20 per person we’d rather not.

  30. warf0x0r says:

    This is such a conflict of interests. Their scaling back their business in order to increase profits and maintain market share. WTB 1x[FCC Regulations on Cable Companies Internet offerings] will tip!

  31. Franklin Comes Alive! says:

    @Trai_Dep: How can you prove that this is what Comcast/TW/et al. are doing? I don’t think there is any way that this sort of behavior can be legislated away. True net neutrality? Sure, that may (someday) fly. But forcing companies to offer ‘unlimited’ vs. metered is something I can’t imagine happening.

  32. @trogam: Regulation! Regulation! If take out all the regulations, you end up with de facto corporate rule.

    But technically, this is “neutral”: all traffic counts towards the cap. There’s just an obvious, innovation-stifling, protectionist advantage to them in imposing an unconscionably low cap.

    I whole-heartedly agree with Om’s analysis.

  33. @Franklin Comes Alive!: How can you prove that this is what Comcast/TW/et al. are doing?

    Using reason and logic.

  34. Hate_Brian_Club_I'mNotOnlyThePresidentI'mAClient says:

    I canceled my cable from Comcast the day I received my Netflix streamer in the mail and when they informed me my internet bill would go up to $45 a month without having a bundle I canceled internet too. Now I have DSL, watch what I want when I want and pay roughly $25 less a month.

    I don’t know why everyone doesn’t do the same, television is 33% commercials, paying for it seems ridiculous.

  35. Franklin Comes Alive! says:

    @Michael Belisle: Sure, we all think we can see it, but can you *legally* prove it, and furthermore, would you expect our infinitely wise legislative bodies to use reason and logic in figuring this out?

  36. BearTack says:

    I have no doubt that the capping of broadband is to provide an anticompetitive edge for the cable companies in delivering movies and other video. Those companies which are capping seem to want to charge insane amounts, like a dollar a GB for going over the caps. Their profit margin on this charge is undoubtedly around 99%.

    But this is the smallest of the frauds being perpetrated on US customers. In the early 1990′s the US and the major communications companaies devised a plan to provide 45Mb internet access along with 500 channel TV access capabilities and other goodies. The telecoms were given higher phone rates, specialized charges, accelerated tax depreciation schedules and direct tax credits to the tune of $2000 per subscriber, some $206 billion dollars in all for the development and implementation of this network. But box number 1 was never built.

    The money just “disappeared” into the coffers of the communications industry. An incredible crime against the citizenry. But the worst is that the network will likely never be built. The lost opportunity costs are believed to exceed 5 Trillion dollars, around $25,000 for each and every subscriber.

    References:

    [www.pbs.org]

    [www.teletruth.org]

  37. darksunfox says:

    @Gokuhouse:
    With Comcast I have 8Mbps download speeds and never see anything near 8Mbps. I think with the way that cable companies have oversold their bandwidth, a lot of the “speed tiers” already in place are theoretical more than actual so I doubt they’d ever be able to do speed tiers. Also, the math they are using between bits, bytes, kbits and mbits is so confusing to consumers… selling internet in speeds of bits and quantaties of bytes is just weird.

  38. Frank_Trapasso says:

    BitTorrent, folks. I watch my shows the night they air, without commercials, in a higher resolution than my television can support.

  39. Saboth says:

    @Rippleeffect:

    The burger chain analogy doesn’t really work when cable companies have monopolies in most areas. I have no dsl avaliable, and the only other option is satellite. So I am stuck with cable for internet. If I don’t like the way a burger join runs things, I can go somewhere else.

    I see this as cable companies stifling competition in a roundabout way. Although they will get away with it since internet usage *is* going up.

  40. sdf632 says:

    Call me a communist or whatever, but if this sort of thing becomes the norm in america, then i suspect a lot of people will probably have to face the decision of leaving america in about 10-20 years when we alone are technologically backward and insulated.

    hell, i can’t even try to load japanese websites through my POS 3MB connection.

  41. jerros says:

    Well if cable companies are looking for me to cancel my broadband, digital phone & cable then they are certianly on the right track with “Metered Broadband”.

    The prices for phone, cable & internet aren’t all too different between cable, phone companies and satellite providers. As long as they all offer similar services then theres not much of a reason to switch between them. However metered broadband would be more inconvienent to me than the hassle it would be to cancel my cable, broadband access, and phone & use another provider which offers similar services and unlimited broadband access.

    So dispite their intent the result is going to be a migration of people who have cable internet access looking for alternatives and in the process finding “package deals” for FIOS or Satellite.

  42. Lyrai says:

    When I moved into my apartment a few years back, I was too poor to afford TV and Internet. I could only pick one, so I went with internet. I have never regretted the decision.

  43. BenjaminCachimbear says:

    And not just for people who abuse the system, but for everybody. I work
    12+hr days, so I don’t watch much actual tv, but I also refuse to use a
    pay-per-episode system like itunes, so when the Roku box came along, I was
    very interested. We already had a Netflix account, and so I showed it to the
    wife, and she gave me the ok to order one. We’ve had it for about 2 weeks
    now, and have really been enjoying it. The wife’s a music teacher, and
    Netfilx offers tons of old musicals and the like, and they have a lot of old
    sci-fi series that I like. The best part, my dad came to visit us this past
    week, and my wife only had to show him how to use it once( now realize he’s
    had the same tv for over 3 years now, and still has to call me and ask how
    to switch it from tv to dvd and back when he wants to watch a movie). If he
    can use it, ANYBODY can! Granted the New Release section is lacking at the
    moment, but I don’t care for most new stuff anyway, so that point is pretty
    much nil.
    Blah blah blah to my point.
    For the 2 weeks I’ve had the Roku box, I’ve noticed at around 8:30p.m.
    central, my box will pause, and rebuffer dropping the quality from 4 to 1,
    if I’m lucky 2. Now I’m not blaming netflix at all because I have Comcast,
    and as anyone will tell you(even them), they cripple their bandwidth during
    “peak” hours. 1 is still very watchable, but that’s not the point. I don’t
    use my internet for anything other than email and paying bills, nothing
    else! I don’t download things overnight with the bittorrents or anything,
    but becuase everybody else does, I’m being punished for using my internet at
    certain hours of the night. Now don’t take this the wrong way, I’m not
    hating on bittorrents or anything, I believe that if you pay for your
    internet(any service for that matter) you should be entitled to use it
    however you see fit, the ISP should not be allowed in any way shape/form/or
    fashion to limit how/why you use your internet service that you shell out
    your hard earned money for. Especially now, with(insert cliche about gas
    prices here) but it’s true, the entertainment industry as a whole is taking
    a hit, because now instead of going to the movies at night or on the
    weekend, I’ll be more inclined just to stay at home and check out whats on
    the Netflix…. But now, that is being threatened.
    I guess the major point is that; it’s just disconcerting to know I can’t use
    a product I paid for to its full potential, because of a service I pay for,
    and their shiesty business practices…. Jumps off box.

  44. DogTheSixth says:

    I ditched my cable in January – I realized there were maybe 3 shows that I actually cared about watching each week, and I could watch all of them on-line the day after they aired. Otherwise, cable was just an excuse to sit on my ass and flip channels for hours hoping I’ll find something good to watch.
    BTW, since getting rid of cable and the attendant ads, I no longer get that weird monthly urge to eat crap from Mickey-D’s.

  45. cetiel says:

    I have gladly not dealt with cable since moving out on my own several years ago. I can’t say I haven’t missed it at all, because certain programs and channels are nice, but it’s very easy to go without it. This is especially true now that ATSC tuners are much better and deliver high-quality HDTV with a $5 antenna.

    We have Comcast or RCN here, but RCN doesn’t service my neighborhood. With the remaining choice, I’ll take Verizon for DSL (extremely reliable here), and antennas for TV.

    I use EyeTV (plus a USB ATSC tuner) on my MacBook for a PVR, which presents a nice TV schedule days in advance without the crappy interfaces found in too many STB’s, and records very high quality shows without breaking any laws or paying anyone a dime. And beyond downloading the schedules it doesn’t use any bandwidth so nobody can control how much I record. Plus the standard PVR fast-forward if I’m watching something I recorded, plus exporting in a more compressed format so I can keep a stash of shows on my laptop without any external media.

    Granted, I think PBS has great programming a lot of the time and that’s not everyone’s cup of tea, but most of the shows I hear people talking about are on the big three/four which are readily available for free, in HD, in most markets in the US.

    I also watch older shows on DVD. I tried an AppleTV briefly but returned it due to the lack of things I like from the store and my uneasiness with paying for media without a physical disc.

    All of this, not counting the laptop I already had, has cost me about $150–once. That’s two months of cable here. As another poster said I laugh when I see cable listed as an essential expense. You can get all your idiot box entertainment for free.

  46. camman68 says:

    @GriffonJames: To clear up ANOTHER misconception – All TV is not required to go Digital by 2/2009. Only the “Full-Power” stations will be required to switch to digital. Other stations will be allowed to continue to transmit the same analog signal that is being transmitted today.

    Especially in rural areas, complete digital service will not be available for quite some time as there is no time-frame mandated by the FCC.

    The advertising that states ALL stations will be converted to digital is very misleading.

    [www.fcc.gov]

  47. Gokuhouse says:

    @darksunfox: You are completely correct. I never see anything near 8Mbps either, but for instance my cable company offers one slower level of service for 50% the cost of what their 8Mbps is but here’s that catch…The download speed is 128Kbps…Now that’s what ticks me off…They charge 50% the money but only deliver about 1/60th the speed. So, in my mind it’s worthless since it nearly brings me back to dial-up days.

  48. smackswell says:

    No shit sherlock.

  49. With the exception of live sports and news, there’s really nothing I would miss if you pulled the plug on my cable and if my Netflix Roku box had a deeper library. Even then, I could enjoy the sports in a local bar and can get the news over the Internet. I suspect that I am not alone here, that the smart folks at the telcos realize this, and that everything on earth will be done to stop us from getting what we want, which is simply to watch commercial-free entertainment on our own schedule for a reasonable subscription fee.

    That said, there are ways to fix this. Normally, I’m terribly allergic to government regulation, but since we’ve already opened that can of worms by subsidizing the hell out of the cable industry, I think it’s just fine for the FCC to find some more enterprising small operators and create conditions which would facilitate their success, pretty much revisiting the spirit of the terribly flawed Telecommunications Ace with some informed hindsight. Of course, the FCC has the _power_ to do this but not the _will_, given its attachment to the telcom lobbyist teat, so it will take a grass-roots movement and a few willing Senators to make this happen. If a compelling issue (parental choice, minority programming, etc.) can be attached to this initiative, and thus make it more appealing for said Senators to pander to a populist concern than for them to pander to their lobbyists, maybe this can happen.

    So far, the arguments for Net Neutrality haven’t resonated with the average American the way they have with the average technogeek; what can be said to make Suzie Soccermom want this?

  50. FilthyHarry says:

    problem with cable is frankly for all that you get, the % that is just absolute garbage or just flat out commercials makes whatever you pay for it a waste. I lost cable a long time ago. Now I d/l Daily Show and Colbert and get my news online and from PBS over the air. I miss nothing.

  51. diablofreak says:

    oh please verizon fios come to NYC before they cap me.

  52. fever says:

    Cable is a “necessity” because there’s no better way to get my girlfriend to leave me alone to get stuff done than turning on the tv and letting her zone out to The Hills or some junk. Granted, this means my brain is slowly rotting, as well as my bank account, but it does keep the rest of me in shape…

  53. JustThatGuy3 says:

    @AtomicPlayboy:

    Just so you know, the “parental choice” and “minority programming” lobbies are at 180 degrees from each other. Parental choice means choosing your content, which means a huge drop in penetration for minority content. As an example, BET is in the vast majority of US homes today – if people had to choose it and pay for it specifically, and even if every black family in America did, it would be in ~10% of US homes.

  54. JustThatGuy3 says:

    @AtomicPlayboy:

    Also, bandwidth caps aren’t a “net neutrality” issue, any more than charging per minute for phone service was a common carrier violation. Honestly, the more pushback there is against active traffic shaping (i.e. slowing bittorrent), the more the broadband providers, and especially the cable guys, are going to go with the simple and “fair” bandwidth cap route. Right now, 5% of customers are 50%+ of the bandwidth. Putting a cap in place that charges those 5% extra would do one of two things: 1. generate more revenue from them or 2. cause them to leave. Either outcome is fine by the cable guys.

  55. @JustThatGuy3:
    I know that these issues can be opposed, and am fully aware of the various aspects of a-la-carte cable proposals. I was offering these simply as examples of issues that viewers and politicians could rally around. Also, I’m not saying that bandwidth caps are a net neutrality issue, but was using the latter as an example of a technical issue that doesn’t have much traction with the average user. My general point is that bandwidth capping, net neutrality, or other technical issues need to be better explained to non-technical consumers in ways which would compel them to demand what we all seem to want.

  56. TheNerd says:

    I haven’t had a TV for a while now, and I don’t miss it. We get cable through Comcast for an outrageously low price, simply because my husband asked the salesperson what discounts were available. It seems if you act like you may be going with the competition, they’ll do their best to get you to choose them. (Not that I haven’t had my share of problems with Comcast, but at least they resolve them within a day.) I don’t miss TV, because the Internet has all that TV has, plus the ablilty to filter out advertisements!

  57. darkryd says:

    Dropped my cable 2 years ago. Now I rent movies through netflix, catch up on the occasional TV show online through Hulu or other sites, or rent an entire season of a tv show at once and watch it – free of commercials.

    I dont miss cable one bit.

  58. wesrubix says:

    No. It’s about companies who are too cheap to invest in their own infrastructure, and would rather sell customers short.

    Verizon understands that investing in its infrastructure will build its business naturally.

    Many cable providers do not understand that notion and would rather tell customers they can only use so much bandwidth to save the money that should be spent on expansion.