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So you’re ready to switch from cable or satellite TV to Internet-only video? Beware: many Internet providers limit how much you can download from websites like Netflix or Hulu.  Isn’t that exactly the point?  KRIV-TV in Houston investigates.  (2 minutes)

Rogers Communications claims usage caps are not creating problems for customers, but if and when they do, the company says it will get rid of them.

Luiza Staniec, manager of public relations for Rogers’ Quebec and Atlantic Canada region, made that remarkable claim in an interview with the New Brunswick-based Times & Transcript.

“At this point there is a cap. It hasn’t really caused a problem,” Staniec said.  “If the cap begins to affect users online, we will abolish it.”

At issue is Netflix’s popular streaming service, which opened for business in Canada last year.  Consumers are embracing the $7.99 service which delivers unlimited streaming of the Netflix online library.  But an increasing number of customers are discovering that while they can watch as much Netflix as they’d like, Internet Service Providers like Rogers have usage limits in place to keep online viewing under control.

Netflix told investors to expect $50 million in operating losses in international business this year, in part because growth in Canada is being hampered by stingy usage limits and high priced broadband.  Once consumers get a broadband bill with overlimit fees attached, some are reconsidering their love affair with video streaming.

Lindsey Pinto, communications representative for OpenMedia.ca, a consumer rights organization, says a regime of usage limits in place at most Canadian ISPs will ruin high bandwidth applications and services like Netflix, as consumers find them too expensive to use.

“It takes a lot of bandwidth to stream a movie or watch Netflix,” Pinto told the newspaper. “People will stop doing things that will bring them over the cap. There will be a disintegration from these services under this model.”

Staniec counters that Rogers offers higher usage cap plans (for more money) to accommodate Netflix viewing.

“If you watch a lot of movies, pick the package with the highest cap,” she says. “If you don’t watch too many, you don’t need the high cap.”

She added Rogers is willing to be flexible, adjusting caps “to suit the consumers.”

But last summer Rogers actually reduced the usage cap of its popular Extreme service plan from 95GB to just 80GB per month, one day after Netflix announced plans to enter Canada.

[Updated 5:12pm EDT — We heard from Ms. Staniec who wants readers to know she was respectfully misquoted by the reporter at the Times & Transcript:

“The correct message I conveyed was that our offer will evolve as customers needs/use evolves. The journalist added, ‘perhaps one day they will be abolished altogether.'”

Staniec would like our readers to know she herself made no statement about the issue of abolishing usage caps.]

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Frontier Communications’ DSL service delivers abysmal results for customers looking for quality time with Netflix.  For the second quarter running, the independent phone company’s ability to keep up with Netflix’s high quality video is about on par with a garden slug in a triathlon — yes, it may eventually reach the finish line, but you’ll be dead before it happens.  Even more embarrassing for Frontier, their service is occasionally beaten by Clearwire, a wireless ISP with a bandwidth throttler that can reduce your online experience to the painful days of dial-up if deemed to be using “too much.”

“Frontier sucks,” writes Stop the Cap! reader Doug in Charleston, W.V. “After they took over where Verizon fled, my ability to watch Netflix online became a source of endless frustration, so now I limit myself to mailing DVD’s back and forth.”

Remarkably, Charter Cable, which does poorly in customer satisfaction surveys, is again the runaway winner, followed by Comcast, the heavily usage-capped Cable One, Time Warner Cable, and Cox.  Verizon and AT&T only deliver middling performance.

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Wall Street Journal: Top execs of some media behemoths are shifting their public stances toward Netflix Inc. of late. They’re now trying to persuade investors that the video streaming service will expand their business rather than destroy it. (4 minutes)

You are forgiven if you are confused about the love-hate relationship the cable industry has with online video streamers like Netflix — one that the Wall Street Journal likens to manic bipolar episodes.  Weeks after blaming Netflix for getting video programming too cheaply and threatening cable subscriptions, cable industry executives were hugs and kisses about online video at the recent Cable Show in Chicago.

“The reason why there’s interest in these Internet video providers that is that they’re deploying technology that’s making the experience better for consumers,” Time Warner Cable CEO Glenn Britt said in an interview with MarketWatch during the National Cable & Telecommunications Association’s annual Cable Show last week.

“There’s nothing about [cable companies] that stops us from doing that. So I would say … we as an industry just need to pay attention and give consumers what they want. Then there’s no room for these other guys. I don’t mean to say that in a negative way, but it’s true.”

Britt

Of course, this is the same man that has earplugs firmly implanted to help resist another rejection of his Internet pricing schemes that Time Warner Cable customers loathed in 2009.  Britt’s desire to give “consumers what they want” just doesn’t play in this part of town while the cable company is installing software to measure and potentially meter broadband usage.

What is different in the online video spectrum is consumers have choices.  They can adopt Time Warner Cable’s glacially-slow rollout of its TV Everywhere concept, watch Hulu, use Netflix, or simply steal content providers don’t want them to watch.  For customers of Time Warner Cable facing competition from AT&T, there is potentially nowhere to run to avoid an Internet Overcharging scheme which could bring the online viewing party to a rapid conclusion when your viewing allowance is used up.

Britt says he is struggling with rights holders to provide more accessibility to online video streaming of popular shows.  He’s also thinking about how many restrictions to slap on subscribers.

MarketWatch talked with Britt and found him dealing with nagging questions about how many devices each user account should be authorized to use for viewing. “Should it be three, should it be 10? If I make [that number] too small, you’re not going to be happy as a customer,” Britt philosophized. “If I make it too big, you’re going to give the password to all of your friends, and they won’t have to buy a subscription to begin with.”

As Netflix traffic continues to grow, analysts are pondering whether Netflix is a primary driver behind consumers cord-cutting their pay television packages in favor of watching video content online.

A recent article in The New York Times claims that Netflix may be behind the recent decrease in cable television households, citing a report from the Diffusion Group, a media analyst.  The group’s study claims 32% of satellite, telephone, or cable-delivered pay television customers were planning to downgrade or cancel their packages in 2011, a giant increase from the 16% measured in 2010.

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Trefis, another research firm, is challenging those assertions, noting an in-depth review of the study finds only around 7% of those planning to pull the plug cited Netflix as the chief reason.

What is causing a rush to downgrade or cancel service?  Rate increases, particularly for add-on services like premium channels or extra tiers including sports and movies.  Time Warner Cable recently boosted prices for HBO to as high as $15 a month for many subscribers.  Netflix may have an impact on these consumers, deciding to drop premium services like HBO, Showtime, and Starz!  For several dollars less than what these premium channels charge, Netflix customers have unlimited access to the company’s streaming video library.

Relentless annual rate hikes have often triggered subscribers to review their packages and delete services to keep the bill stable.  Economic distress is also a widely cited factor among those completely canceling pay television.  The report does not measure how many consumers, especially younger ones, don’t ever start a pay television subscription.  These subscribers never had a cord to cut.