The debate over usage caps and Internet video raged on in the press this week. Netflix weighed in with an acceptance that high bandwidth caps were justified although low caps with high overage charges were not. Meanwhile, AT&T has introduced a bandwidth cap of 150GBs on its DSL service with an overage charge of $10 for 10GBs extra. Wholesale rates for bandwidth are just one or two pennies per GB, meaning a $10 charge appears punitive, far from a fair retail rate.
Operators have also made plain their antipathy toward companies such as Netflix. Brian Roberts recently dismissed Netflix as just a rerun channel. Glenn Britt, Time Warner Cable's chief, also believes Netflix will "go the way of Blockbuster" with customers preferring TWC's high-priced PayTV service. This antagonism has led to widespread suspicions that these operators will find some way to disadvantage OTT video services on their broadband networks; a last-ditch effort to put a lid on net-to-TV video.
I was delighted to hear a refreshing new attitude to both caps and OTT video at the TIA 2011 Conference this week in Dallas, Texas. Smaller telcos and cable companies see these issues quite differently than incumbents. On my panel "Bridging the Legacy and Over-the-top Worlds" on Wednesday, Kerry Sutton, Product Development Manager at Hill Country Telephone, commented that he wanted services like Netflix to work best on his broadband so that he can "sell as much bandwidth as possible."
He viewed services like Hulu and Netflix as helping him achieve that goal. As well, Mr. Sutton said there are no caps on Hill Country's consumer broadband services.
Matthew Schonlau, Switching and Transmission Manager at Pioneer Telecom, said he didn't view OTT video as friend or foe. Rather he wanted Pioneer to help customers get the best experience possible from both PayTV and OTT. He saw Pioneer's key value as making access to all content--regardless of source--as simple as possible, while addressing those problems preventing a great experience. So, Mr. Schonlau is happy for his customers to enjoy OTT services as long as Pioneer is there to help them do it.
So while the biggest operators annoy their customers with bandwidth caps and fuss about OTT services, their smaller brethren are accepting it as part of the landscape. They're rolling up their sleeves and figuring out how they can keep serving their customers. I can only hope the likes of AT&T and Comcast take a leaf out of their book.
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