IPTV Technology Featured Article

Bandwidth Caps: Telco Opportunity

By Gary Kim, Contributing Editor

As Time Warner (News - Alert) Cable and Comcast experiment with different techniques for coping with Peer-to-Peer downloads, an interesting strategic opportunity presents itself.

 

Time Warner is testing a usage cap for new customers in Beaumont, Texas, charging $1 for each Gigabyte consumed beyond a preset cap.

 

Monthly caps depend on the bandwidth plan a customer has chosen. $29.95 packages running at 768k kbps downstream have a 5 Gbyte cap. Plans costing $44.95 run up to 7 Mbps and have a 20 Gbyte cap. The $54.90 plan runs up to 15 Mbps and comes with a 40 Gbyte cap.

 

A least initially, few customers will find they have any problems. But that might not be the strategic objective.

 

If a cable operator wanted to protect its core TV revenue streams, it might want to restrict the ability to view similar content using the Internet. Bandwidth caps are one way to achieve that goal.

 

That of course creates an opportunity for telcos to differentiate. Verizon, with its FiOS (News - Alert) fiber to the home service, is among the best positioned to create marketing space between itself and Time Warner, should the bandwidth cap plan be more widely adopted.

 

The Cox (News - Alert) Communications cable modem service limits per-month consumption to 40 Gbytes downstream, and 10 Gbytes upstream. That limit applies to users of service running from 5 Mbps to 9 Mbps.

 

Telcos offering multi-channel video services won't be too happy about cannibalization of linear video service revenues, either. But they don't have the huge installed base the cable operators do.

 

Assuming consumer demand continues to build, and assuming the content providers decide they really can make as much, if not more money, switching to on-demand delivery methods, a huge strategic advantage will accrue to providers deemed to be Internet video friendly.

 

Gary Kim is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

 

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IP stands for Internet Protocol, a data-networking protocol developed throughout the 1980s. It is the established standard protocol for transmitting and receiving data in packets over the Internet. I...more