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Cable Stock Booster Predicts AT&T Provides ‘Safe Passage’ for Cable Internet Overcharging Schemes

Phillip Dampier March 14, 2011 AT&T, Charter Spectrum, Cox, Data Caps, Online Video, TWC (see Charter) 5 Comments

Craig E. Moffett joined Sanford C. Bernstein & Co. as the Senior Analyst for U.S. Cable and Satellite Broadcasting in 2002.

Craig Moffett, perennial cable stock booster, predicts AT&T’s move to implement usage limits on its broadband customers will provide cover for cable operators to rush in their own Internet Overcharging schemes, starting with budget-priced usage plans.

Moffett released a research note Monday claiming Charter Communications, Cox Communications, and Time Warner Cable are among the first most likely to move towards limiting their customers’ broadband usage, with Comcast standing on the sidelines, at least for the moment.

Moffett thinks AT&T’s announcement is excellent news for wired providers, who could reap enormous new profits on top of some of the world’s most expensive broadband packages.

“AT&T’s move provides air cover that makes it easier for all of them to follow,” Moffett told his clients. “We view the move as good news for all the terrestrial broadband operators.”

Moffett believes usage caps have everything to do with stopping the torrent of online video.  He notes AT&T’s caps are set high enough to target AT&T customers who use their connections to watch a considerable amount of video programming online.

“Only video can drive that kind of usage,” Moffett writes.

Moffett has repeatedly predicted any challenge to pay television models from online video will be met with pricing plans that eliminate or reduce the threat:

“[I]f consumption patterns change such that web video begins to substitute for linear video, then the terrestrial broadband operators will simply adopt pricing plans that preserve the economics of their physical infrastructure,” Moffett said. “Of course, any move to preserve their own economics has far-ranging implications. Any move towards usage-based pricing doesn’t just affect the returns of the operators, it also affects the demand of end users (the ‘feedback loop’).”

Currently there are 5 comments on this Article:

  1. jr says:

    “you need the freedom to only read text”-Craig Moffett

  2. Internet TV says:

    This seems like they are unfairly targeting. It’s odd that Broadband is the most profitable portion of the home market. Something like 90% profit at it’s current monthly rate. It’s also funny the company with the worst Internet service is raising it’s rates.

  3. James Karvey says:

    Just switched from Charter to ATT UVerse because of usage caps. Sales rep at ATT said we have no plans to implement usage caps. So essentially, ATT delays their announcement a few months to soak up disgruntled (and I am disgruntled) cable Internet users before springing the trap.

    I don’t believe their reasoning for the caps. I do believe in a corrupt political system and corrupt politicians. Net neutrality – DOA.

  4. Fred says:

    Can someone help us here in South Carolina force Charter to drop their caps altogether? Also, can someone tell Mr. Moffett no one wants UBB.

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