Time Warner Cable Supports Data Usage Limits4 Jun, 2010 By: Erik Gruenwedel
Time Warner Cable June 4 said it supports efforts by telecommunications companies and cable operators to cap monthly data usage limits among subscribers and replace plans with a consumption-based pricing model.
AT&T said beginning June 7 it would supplant the current $30 monthly unlimited mobile data plan with a $25 plan for 2GB of data and $10 thereafter for each additional gigabyte of data used.
The typical 2GB limit would accommodate about 200 minutes of standard-definition video, 10,000 e-mails without attachments (1,500 e-mails with attachments), 4,000 Web pages and 500 photos posted to social media sites, according to AT&T.
BTIG Research analyst Walt Piecyk said streaming a standard-def Netflix video at 375 Kbps would use up the entire 2GB cap at 3 hours per week. Streaming in high def (2.6 Mbps) would use the cap in just 26 minutes of consumption per week.
The switch is significant considering AT&T is the exclusive carrier for the Apple iPhone 3G, Touch and iPad devices that tout portable video consumption, including Netflix movie streams.
Indeed, unlimited data usage has been a major selling point for smartphones and related media devices luring consumers with video-on-demand (VOD) movies, including Blockbuster On Demand, Amazon VOD, Walmart’s Vudu, Netflix and Best Buy’s pending CinemaNow digital service.
Speaking at an investor conference in New York, Glenn Britt, CEO of Time Warner Cable, said that with the market push for wireless devices and rich-media consumption, implementing price-regulated consumption makes sense.
“It is clear to most observers that this has to go in that direction ultimately,” Britt said. “In most businesses when usage goes up, that’s a good thing because people pay more. And people who use less, pay less.”
He said that initially iPhone/iPad consumers would more readily accept such a change than cable subscribers, which is why Time Warner aborted similar efforts at a data usage cap last year.
“The move away from flat-rate mobile broadband price plans will trigger many things, among which will be a change in consumer behavior,” said Declan Lonergan, analyst with The Yankee Group. “Consumers will change, at first painfully, but later more naturally. Despite the rumors of mass exodus, mobile broadband consumption won’t fall off a cliff.”
Indeed, Lonergan said that with a competitive market, cable operators and telecommunication companies will implement notification systems, monitoring tools to help heavy data users adjust accordingly to avoid undo regulatory and consumer rights scrutiny.
Then again, subscribers/consumers intent on hoarding Web-based movies and repurposed TV programming can still do so provided they have access to unlimited Wi-Fi at home and at more than 20,000 AT&T Wi-Fi Hot Spots nationwide.