On the heels of Time Warner Cable's announcement yesterday
that they'd be expanding metered billing trials in the States, Canadian cable ISP Cogego has dropped the news on customers in our forums
that they'll be imposing metered billing on users. Bravely taking the brunt of the user complaints directly, Cogeco network engineer Krispy is fielding questions from users about the new shift. According to Cogeco, the new caps will be as follows:
Lite – 10GB/mo bitcap - $2.50 per GB over to a maximum of $30
Lite Plus – 20GB/mo bitcap - $2.00 per GB over to a maximum of $30
Standard – 60GB/mo bitcap - $1.50 per GB over to a maximum of $30
Pro – 100GB/mo bitcap - $1.00 per GB over to a maximum of $50
Users will start seeing usage charges on their bills in April and May but will not be charged officially until June -- as part of an apparent plan to get users used to the amount of bandwidth they use and the extra charges they'll incur. Everything counts toward your cap except Cogeco VoIP traffic, and users will be notified via e-mail when they get close to the cap. According to Cogeco, they'll be offering a new meter on their portal page.
The shift to metered billing started in Canada roughly a year ago
, when Canadian carrier Rogers began imposing caps ranging from 2-95GB, with users on the lowest tier incurring overage charges of up to $5 per gigabyte
For its part, Cogeco insists the shift to metered billing was necessary because the "reality is that 'bandwidth' is not free," according to Krispy. "While transit may appear cheap, the reality is a network like this takes continual maintenance and upgrades to get the transit to and from you," she says, adding that this is "just a natural evolution of the technology" and "not a money grab."
Charging per gigabyte is more forced migration than natural evolution -- the impetus originates with investors and executives who fear the impact Internet video will have on TV revenues. Imposing such low caps in the age of HD video -- and charging users $1-$5 per gigabyte for bandwidth that costs a carrier pennies -- is
a money grab, and it's only made possible by a lack of sustained, viable competition and napping regulators.
While carriers correctly note there are obviously other costs beyond bandwidth that go into providing service -- those costs are more than covered by advertising, alternative revenue and the monthly charges customers are currently paying. Meanwhile, evidence suggests heavy users can be handled without resorting to metered billing by imposing a very high cap (like Comcast's 250GB cap in the States), and by nudging those users -- which carriers freely admit only make up a small fraction of their userbase -- onto a business-class of service.
As with Time Warner Cable yesterday
, the argument that carriers don't make enough money under the existing flat-rate system to operate or support infrastructure upgrades is something simply not supported by the healthy profits clearly illustrated in earnings reports. Anybody bothered by the metered billing trend should be demanding hard numbers from any carrier boldly claiming that flat-rate pricing isn't a completely viable business model.