We saw it first with Comcast’s 250 GB cap on bandwidth. At the time it was an outrage, but now it seems like nothing. Time Warner recently jumped on the bandwagon of capping bandwidth, only they decided to limit customers to a scant 40 GB a month. Cable companies are trying to stay afloat in a sector that is beginning to reject their business model, only they are doing so by imposing severe anti-competitive restrictions on their customers.
The real problem cable is facing is that people are going elsewhere for television, movies, and other content that used to come solely from companies such as Comcast and Time Warner. Yet with the dawn of streaming on-demand entertainment, people are no longer dependent on cable for these services. Indeed, most users would rather stream a movie of their choice over Netflix or watch a show whenever they wanted on Hulu, instead of being dependent on the airing schedules that have determined when one could watch a program that have been in place since the beginning of cable as an industry. Cable companies see this as an attack on their monetary interests, and thus are imposing caps in an attempt to deter people from abandoning the old ways.
Rather than cling to the old, cable companies should realize that they are most ready to embrace the new. Unlike services such as Hulu and Netflix, cable companies already have partnerships with the vast majority of the companies which control how content is distributed. Thus Time Warner, instead of capping bandwidth, could move all television shows over to a streaming, on-demand model. Your cable box would essentially be a media center computer with access to a proprietary mega-Hulu.
While capping bandwidth is bad for both consumers and ultimately the cable companies’ livelihoods, one has to remember that they are old companies with heavily entrenched business models. The only reason that cable companies are ISPs in the United States is because they already had the infrastructure for bandwidth in place; laying hundreds of miles of cable is an expensive process. Yet given their dire positions, cable companies will have to innovate in some way, lest they lose even their foothold in the ISP market.
