Many
consumers in the U.S. have access to broadband service from either
cable or phone providers that offer unlimited data consumption each
month. Some providers do limit bandwidth that a user can consume in a
given month without overage charges in a fashion similar to that of
wireless providers.
Unlimited bandwidth is a great thing for
consumers who like to stream content online from services like
Netflix and others. Streaming video does consume lots of bandwidth
and some providers are looking to make money on streaming content as
it gains popularity from overage fees. One such provider is Rogers in
Canada.
CBC
News reports
that Rogers, the second largest ISP in Canada, announced this week
that it is lowering
its allowed download limits. Customers who sign up for
Rogers Extreme service after July 21 will get 80GB of monthly
bandwidth rather than the 90GB that people who signed up before that
date are allowed.
Buyers who opt for the Lite service
will get 15GB of bandwidth per month rather than the 25GB offered
before. Rogers is offsetting the reduction in monthly allowance for
Extreme service customers by upping speeds to 15Mbps from 10Mbps
before. The Lite service maintains its existing speed. Users who go
over their data allotment for the month are charged an extra $50.
The
announcement of reduced data allowances comes only a few days after
Netflix announced that it would be entering into the Canadian market
with its streaming service.
John Lawford, a lawyer with a
consumer watchdog group said, "It's easier to make money from
[data] overage charges because those aren't really advertised rates.
You're going to make more money from those overages, eventually, than
your regular monthly rates. It also kind of wrecks [Netflix's]
business model if the cost to the end user goes up after they've
subscribed and then they cancel it a month later because they can't
afford it."
The move is also seen as a way for Rogers to
put a damper on Netflix's viability in the Canadian market. Rogers
offers a streaming service similar to Netflix's streaming service in
Canada already and the two will be competitors in the market.
