Bandwidth Caps Will Break Consumer Habits And May Create New Ones

I always try to keep a consumer point of view when I look at developments in the broadband market – specifically, how carrier plans are going to affect consumer behavior. There’ve been a lot of rumblings recently about some possibly radical changes in carrier bandwidth policies and terms of service – ones that may have a bigger (negative) impact than carriers realize ….. changing customer habits.

I’m talking, of course, about the public statements, service trials and even unannounced actions being taken by carriers in the realms of bandwidth caps, tiered pricing and service (i.e., P2P) blocking. We’ve had enough reporter calls on these topics to know that these topics are reaching the mainstream press, making consumers across the U.S. (and Canada) more than a little bit nervous about their broadband consumption habits.
We’ve heard about byte caps ranging from 5 GigaBytes a month to more “generous” limits of say 40 GBs a month or more. It almost doesn’t matter the amount of the cap – many consumers are going to outpace the caps in short order and once negative reprisals start taking place, people are going to start changing their habits, and changed habits represent business opportunities for others.

Now nothing I’m saying here should be construed as saying that I don’t understand that carriers have legitimate concerns about carrying high bandwidth content on their networks without compensation. My point here is that if consumers begin facing the kind of uncertainty with their data plan’s monthly cost that they’ve traditionally faced with their mobile data plans, they may very well begin to look for alternatives. (It’s worth noting here that carriers have made a pretty definitive move towards “unlimited” rather than metered plans for mobile data services over the past year.)

Now many people will say: What alternatives? In a duopoly environment there really aren’t any alternatives, are there? Well I think that bandwidth/byte caps may force consumers to “think outside the box”, or in this case “outside the network”, and look at means of obtaining content that don’t rely on the Internet connection. A step backwards? Maybe for carriers, but for users, many are already doing this every day with other forms of content so it’s not a stretch.

An example here – widely ridiculed when it was made public back in May – is Blockbuster’s concept of “drive-by content fillups” in the company’s stores. Blockbuster’s CEO announced back in May that the company would be trialing a kiosk system in a number of stores that would allow customers to download movies to a portable device in just two minutes.