Cable Operators

Mediacom Turns On Bandwidth-Surcharge Meter

8/06/2012 7:02 AM Eastern

Mediacom Communications has become the latest broadband provider to move to usage-based pricing model, a change operators say is necessary to manage exploding Internet demand.

The usage allowances, introduced Aug. 1, vary by package and range from 150 Gigabytes per month for Mediacom Launch (3 Mbps down) to 999 GB per month for Mediacom Ultra (50 Mbps down) and Ultra Plus (105 Mbps down). Customers who exceed their monthly usage allowance will be charged $10 for each additional 50 GB used.

Only new customers and existing customers who opt-in to the new packages will be affected by the change, according to Mediacom group vice president of legal and public affairs Tom Larsen.

"Today, our average Internet subscriber uses about 31 GB of bandwidth per month, so we do not anticipate this having much impact on customers," he said.

Mediacom's shift to usage-based pricing was reported Friday by DSLReports.com.

Internet service providers say usage-based billing is necessary to ensure their networks provide consistent and reliable bandwidth to all customers by keeping excessive use in check.

But consumer advocates and online-video distributors including Netflix have complained that usage-based broadband pricing will inhibit the growth of Internet TV options as an alternative to traditional pay TV. The Department of Justice is investigating whether bandwidth-usage restrictions violate antitrust laws, among other industry practices, according to reports.

Comcast last week kicked off a usage-based pricing trial in Nashville, Tenn., with a maximum monthly allowance of 300 GB with each additional 50 GB chunk an additional $10. Comcast's new pricing structure, which eventually will replace the MSO's static 250 GB cap across its footprint, is not optional.

Other U.S. wireline Internet service providers that have cap-and-overage plans include AT&T and Suddenlink Communications. In Texas, Time Warner Cable has introduced an optional, lower-priced plan for lighter users while retaining unlimited-usage pricing for most subscribers.

Privately held Mediacom is the eighth-largest cable operator in the U.S., with about 1.1 million basic subscribers.

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