A Wolf In Sheep’s Clothing

There has been a long-running narrative in tech writing about the downfall of, or the necessity to bring about the downfall of, cable companies. Recently, I was discussing the merits and drawbacks of cable with a friend of mine, and ended up at an interesting predicament. We agreed that cable was expensive, yes; we also agreed that people who subscribed to the services that companies like Comcast provide walk a thin line between freedom (otherwise known as net neutrality) and tight, restrictive control; but, we ended up agreeing that, based on what we’re getting from the “evil empire” of Comcast, it’s not a bad deal.

The discussion started with HBO Go, a service that HBO provides its customers that allow them to stream HBO programming on demand to a large number of connected devices. It’s a great way for members of the same household to watch their favorite shows and movies without having to fight over the TV. The downside is that HBO Go is not purchased as a standalone service, it’s a part of HBO. While that seems ridiculous, someone recently asked me how much I’d be willing to pay for HBO service if it meant I could watch the shows anywhere. Considering what I was paying for Netflix and Hulu, I said I’d probably be ok with paying $8–10 a month. When I got home, I checked the price of HBO, and, to my surprise, it was only $10 a month (I was assuming that it would be much higher, since it’s a premium cable channel, and cable is controlled by “evil” media companies). It was then that I considered what I was getting for my monthly offering at the Altar of Comcast.

For my monthly fee, I get a whole heaping pantload of data, combined with a paltry offering of standard-definition TV channels. The most common narrative I hear is that people feel like they’re bullied into paying for channels they don’t need in order to get the ones they want. “Just let me pay for the channels I want!” everyone seems to say. And I agree with them! Why should someone be charged for something they don’t use and didn’t really ask for? After all, when you walk into a store and pick out the items you want, the store clerk doesn’t start shoveling unwanted merchandise into your basket. The same should go for programming and media, right?

Well, we’re actually a lot closer than we think, in my opinion. In addition to the base fee for my cable, I pay $8 per month each for Netflix and Hulu, which allows me to access a great deal of TV programming and movies for just under $20/month. I can add HBO to my cable package and get HBO go for “free” on my iPad and Apple TV, which accesses the content through…the same cable connection that I’m already paying for. So it’s…not really free, is it? In fact, it’s almost like I’m being charged double…and yes, that’s frustrating. But the same parallel can be drawn with merchandise. Sometimes you don’t want the “free” stuff that gets bundled with your popcorn, or the tchotchke that is shrink-wrapped your deodorant. In this case, I think of the stuff I don’t use as “bonus” features.

The structure I painted above makes sense when you look at it vis-à-vis the type of relationship that most people have with their cell phone carriers. Really, it’s very much the same – a person pays a monthly fee to be able to use that carrier’s network and pipe data to their device, the amount of which is allowed each month varying by user. Any other dues and subscriptions that the person pays are completely separate from the carrier. To carry the analogy even further, look at what’s happened to the precious airtime minutes and text messaging packages – they’ve all been ditched so that carriers can charge users for what they’re really hungry for: data. The airtime minutes and texting is almost a throw-in now.

The example of the carriers, however, should also serve as a cautionary tale. While most people are used to the fee structure now, there was a time when tiered data plans were met with hatred and anger because people realized they were being taken advantage of. Then, when the mighty marketing machines that drive these carriers went to work convincing people that they would save some money every month if they forfeit their right to an unlimited amount of data, people caved left and right…and they did this just as streaming media was entering the spotlight. It was the perfect one-two blow to the American consumer.

Now, the fear is that terrestrial data providers will repeat the same behavior that their wireless brethren got away with. That they’ll introduce tiered data plans, bandwidth caps, and heavy throttling to ensure that they can strangle every last nickel out of the American populace. This all assumes, of course, that net neutrality laws remain in place. While net neutrality laws are supposed to protect the Internet and the free flow of information around the globe, I have a feeling that terrestrial data providers will use net neutrality against consumers, making the argument that they can provide open pipes so long as consumers pay for the privilege.

At any rate, the current situation of à la carte channels and pricing is almost kinda not-really-but-sorta here…if you know where to look.

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The Cap’s the Limit

Aren't these gentlemen just the dapperest?

There was a recent incident over the border with our friends in the north regarding internet usage and the billing thereof. Those silly Canucks thought it would be appropriate to put ridiculous data caps (50 GB? seriously?) in place to make sure their customers were doing anything cRaZy, like using the internet they paid for. No, silly person! You can’t watch streaming video on the internet or rent movies from online providers! That’s silly! You need to drive out to a video rental store and take home a physical disc so you can watch it in your deeveedee player. What’s that you say? All the video stores are shutting down because all of these super awesome streaming movie companies are putting them out of business? Pish posh. Less talking, more driving to video stores. They don’t have what you want? Just rent something anyway. Rent it. Just shut up and rent something.

Ahem.

Before I get too carried away, this is what I’m referring to:

Canadian cable provider Shaw hit back at mounting complaints of restrictive bandwidth caps by unveiling a new set of Internet plans with much looser caps and increased speeds.

The whole thing is ridiculous, and honestly degrading to consumers in general. There is no need to be imposing these types of restrictions on the average consumer. If there’s a problem with a few users eating up hundreds upon hundreds of gigs of data each month, then address the issue with them. Otherwise, putting data caps in place, even large ones, as listed below, is asinine.

Starting June 7, capped plans will start with at least 400GB of data per month at 50Mbps down, 3Mbps up at $59 per month for those with a Legacy TV package, moving up to 100Mbps down, 5Mbps up and 750GB of data for $79 per month.

A second phase in August will add a 250Mbps download, 15Mbps upload plan with a 1TB cap for $99.Both phases will have genuine unlimited plans. In the first phase, a 100/5 unlimited plan will be available for $119 on top of the TV plan. From August onwards, this plan will be replaced by a 250/15 version for the same price. Existing 1Mbps, 7.5Mbps, and 25Mbps plans are getting an immediate boost from 15GB, 60GB, and 100GB caps to 30GB, 125GB, and 250GB respectively.

It sounds all fine and good, right? To be honest, I don’t think I’ve ever hit anywhere near that amount of data in all the time I’ve been using the internet, so I’m not complaining about the size of those limits, I’m complaining about the idea that caps need to be instituted on a large-scale basis. It’s condescending and hostile towards consumers. The article then taps into the ongoing discussion going on in the United States right now:

Internet providers in North America have regularly tried to claim that the rapid growth in online video has raised the costs of maintaining their networks and that they allegedly need to institute low caps to keep these costs check. Critics, including smaller providers and advocacy groups, have shown evidence the claims are often false since the cost of bandwidth has often gone down. They have at times accused companies like Bell and Rogers of using low caps to either delay network upgrades or to discourage competition from nimbler rivals to traditional TV, such as iTunes and Netflix.

The fact of the matter is, Internet usage is increasing, and telecommunications companies are shaking in their boots because their fat paychecks are going to start dwindling. I’m all for making money, but not when it comes at the expense of customer satisfaction. The trend here is, as I said before, hostile. No company should treat its customers like they’re harming its business. Your customers are the reason that you’re here to begin with, and don’t you dare try to justify your actions by pointing the finger at innovation and progress.