Telus (Toronto: T.TO) is putting some coal in their broadband consumers' stockings this holiday season, announcing this week that it plans to cut its usage caps while retaining the current monthly rates.
As seen in a guide on the company's website, customers who subscribe to the telco's standard DSL and Fiber to the Node (FTTN)-based broadband services will be affected by these changes.
Two of Telus' higher speed tiers--High Speed and High Speed Turbo 25--will reduce their usage limits, from 150 GB a month to 100 GB and from 500 GB to 250 GB, respectively.
The service provider said these caps, which will go into effect on Feb. 1, are designed "to better manage internet investment."
Broadband continues to be a major revenue driver for Telus. During the third quarter, the telco reported broadband revenues rose 18 percent with the addition of 26,000 new subscribers. It attributed the growth to promotions and the pull-through effect of Optik TV sales.
Besides being unsurprisingly upset about the proposed rate increases, some Telus customers in a DSL Reports user forum said that though they saw a "usage reminders" section in their accounts, the section did not include any usage information. Of course, that could change come Feb. 1.
Usage-based billing (UBB) has been a controversial issue in both Canada and the United States. In addition to Telus and Bell Canada (NYSE: BCE), U.S.-based telcos and cable MSOs such as AT&T (NYSE: T), Frontier (Nasdaq: FTR) and Time Warner Cable (NYSE: TWC) have begun developing UBB programs to prevent so-called bandwidth hogs from consuming too much bandwidth.
Time Warner Cable, for one, said during the UBS Warburg UBS Global Media & Communications Conference this week that it would offer its usage-based broadband billing option nationwide. CEO Glenn Britt said the company does not want to place usage caps on its broadband products, but rather find a way to "offer unlimited service but that we should offer a choice of a lower price with the consumption to match it for people who don't need unlimited" bandwidth.
Although service providers have justified usage caps and UBB with the argument that they need to do it to protect their investments, the actual reality is that only a very small percentage of users will consume anything near the caps they create.
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