Home » Broadband Speed »Comcast/Xfinity »Consumer News »Data Caps »Net Neutrality »Online Video »Public Policy & Gov't »Video »Wireless Broadband » Currently Reading:

Cable Stocks Soar, Rationing Broadband With ‘Usage-Based Billing Coming Quickly,” Predicts Analyst

When the FCC delivers for Big Telecom's agenda, stocks soar. Comcast shares exploded on news the company could largely do as it pleases with its broadband service. (CNBC)

Comcast’s stock price soared today as Wall Street was cheered by news America’s largest cable operator would likely face little regulatory restraint from consumer protection policies designed to keep broadband providers from meddling with Internet traffic.  But investors were also excited by the green light signaled by Federal Communications Commission chairman Julius Genachowski that launching Internet Overcharging schemes like “usage-based” billing, speed throttles and hard usage caps on broadband consumers was also acceptable marketplace behavior.

Craig Moffett, a Wall Street analyst with Sanford Bernstein said Genachowski’s remarks left the marketplace with little doubt it can get away with price increases and new limits on broadband consumption.

“The FCC here is expressly acknowledging the need to ration broadband, and that’s a really big deal,” said Moffett, appearing on CNBC this afternoon.  “I think you are going to start to see usage-based pricing plans from the broadband providers pretty quickly.”

Moffett also acknowledged his firm’s own research showing consumers despise such pricing schemes and admits the impact on America’s broadband landscape is likely to include a dramatic shift in how customers use their Internet accounts.

“When customers think they are going to be charged when they click on that link and watch a movie, they are going to be inclined to watch fewer movies,” Moffett said.  “You can’t expect linear progression of online video because there are going to be feedback loops like usage-based pricing that are going to limit usage.”

Moffett says cable operators are benefiting from Chairman Genachowski’s new approach because it opens the door to repricing wired broadband accounts to limit broadband consumption.  Since most analysts guessed regulators would allow usage-based pricing to remain on wireless broadband, the unexpected green light for similar rationing plans on cable broadband, DSL, and other wired services was welcome news, at least for providers and Wall Street.

Consumers that don’t deliver a resounding negative response to elected officials, the FCC, and the White House better start thinking twice about clicking that YouTube video, because that few minutes could cost plenty if providers slap higher prices and limits on broadband service in the coming year.

[flv]http://www.phillipdampier.com/video/CNBC The Fight for Your Right to Surf the Web 12-1-10.flv[/flv]

A Wall Street telecom analyst predicts the end of unlimited home broadband accounts is going to come quickly, now that the FCC has capitulated on Net Neutrality policies.  (3 minutes)

0 0 votes
Article Rating
3 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Lexster
Lexster
13 years ago

Genachowski’s number is (202) 418-1000 I suggest calling and making sure he understands that this is simply unacceptable. Phillip, could you please get another initiative started much like the one you began when Time Warner had those “test markets”? I’m starting to become legitimately worried about this. We need to rally.

Lexster
Lexster
13 years ago

It’s definitely a lot bigger and I’m glad you’re already on the ball. I’ve never been so worried. If this comes to pass, every single new internet technology is going to be squashed. Like in the video you posted, Netflix stock was dropping like a stone because if limits are imposed, no one’s going to risk paying extra ON TOP of their Netflix subscription to watch a movie. I definitely agree. If Genachowski is going to so easily bow to pressure, we need someone who won’t.

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!