Pay TV Usage Caps: Will Watching Netflix Lead to Higher Cable Bills?

By Karla Robinson
December 5, 2011

Netflix subscriptions could end up costing consumers $28 a month instead of $8 if cable companies decide to add charges for Web streaming.
“U.S. providers like Time Warner Cable have weighed usage-based plans for years as a way to squeeze more profit from Web access, and to counter slowing growth and rising program costs in the TV business,” reports Bloomberg. “While customer complaints hampered earlier attempts, pay TV companies are testing usage caps and price structures that point to the advent of permanent fees.”
As online video streaming increases in popularity, Web data usage soars. Some companies have penalties in place for customers that exceed their monthly gigabyte allowance, while others do not.
Adding charges will not only help cable companies’ Internet revenue, but also possibly boost pay TV service by disincentivizing online services like Netflix and Hulu.
A Netflix spokesman told Bloomberg, “[The practice] is not in the consumer’s best interest as consumers deserve unfettered access to a robust Internet at reasonable rates.”

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