Cable service may be happy you dropped TV
The steady march of TV cord cutting – plus continued inflation in programming costs – has led some smaller cable operators to stop fighting this trend. But if yours invites you to dump its TV service and switch to online streaming, its internet rates may hide a surprise that will be painful to you and profitable to your internet provider.
Data caps limiting how much you can download per month are an unpleasant reality at too many providers, but small cable services can be significantly less generous with them. Those same companies also have the hardest time keeping programming costs in check and increasingly lose money on video.
“(A)mong smaller cable operators, it has become commonplace to stop even trying to preserve the video subscriber base,” a MoffettNathanson Research study observed. That note called out two second-tier firms, Cable One and Mediacom, as being particularly at peace with seeing their video subscribers quit.
That March 13 report, however, didn’t mention those two firms’ low data limits. At CableOne, the cheapest plan listed – a $55 option with downloads of 100 megabits per second – only allots 400 gigabytes of data, while at Mediacom, a $69.99 plan offering 60 Mbps downloads imposes the same 400 GB cap.
With Netflix high-definition streaming using up about 3 GB per hour and Sling TV (going by its 5 Mbps bandwidth requirement) consuming almost 2.2 GB an hour, only three hours a day of streaming could eat up half of a 400 GB cap.
You can get past those limits, but it will cost you: CableOne’s 200 Mbps plan increases the cap to 600 GB but costs $65, while Mediacom’s 100 Mbps, $79.99 plan lifts it to 1 terabyte. (These prices don’t reflect promotional discounts; Mediacom’s site doesn’t list prices across its network, so I checked random addresses around Des Moines, Iowa.)
“We think we have pretty robust allowances,” Mediacom spokesman Tom Larsen said in a phone interview. “Less than 5% of our customers go over their allowances in a month.”
That firm does warn subscribers nearing a cap (Larsen declined to use that word) but does not break down usage by site or app – a widespread failing among ISPs with data caps.
Cable One did not return two emails and a phone call requesting comment.
Other providers can be significantly stingier: The datacaps database maintained by BroadbandNow includes many small cable operators that only allow 100 GB.
Jameson Zimmer, head of product and senior analyst at BroadbandNow, said in an emailed statement that some smaller cable operators “have legitimate issues with streaming as the growth in traffic from Netflix and YouTube has been massive and leads to slow peak-use performance.” Larger ones, he added, typically do so for “business purposes” – read: because they can.
MoffettNathanson analyst Craig Moffett also said smaller cable operators are more likely to impose strict data caps. He wrote in an email: “The larger operators generally don’t, or their usage limits are so high as to not matter for most customers.”
Expect more cable services outside giants like Comcast to log off of traditional TV, said Alan Wolk, lead analyst at TVREV – not only do they escape money-losing programming deals, they no longer have to deal with sending out trucks and technicians to install cable boxes.
“I think it is definitely the wave of the future,” he said in an email. “Smaller companies can offer high-speed broadband plus a deal on a popular (streaming TV service) like Hulu Live TV or YouTube TV.”
Rob Pegoraro is a tech writer based out of Washington, D.C. To submit a tech question, email Rob at rob@robpegoraro.com.
Follow him on Twitter: @robpegoraro.
Internet rates may hide a surprise that will be painful to you.