Suddenlink: Usage Caps Have 'Become Significant Revenue Stream' "Overage charges have become a significant revenue stream for us," outgoing Suddenlink CEO Jerry Kent informed attendees of the company's conference call this week. Kent stated the company saw a 3.6% year-over-year increase in revenue to $605.1 million, thanks largely to residential Internet services growth and the implementation of usage caps. Suddenlink's current caps range from 250 GB to 550 GB, depending on speed. Users pay $10 per 50 GB over the cap they travel.

"Data plans are one step among several that help us continue delivering a quality Internet experience for our customers," insists the company's FAQ. Of course if you're a regular, you know the "consumer experience" has nothing to do with usage caps. Nor are caps implemented to manage network congestion, a narrative the industry gave up on several years ago. They're implemented for one (well, two) reasons: to raise broadband rates in markets with limited competition, and protect TV revenues from Internet video. A company can't just say "we're socking uncompetitive markets with price hikes," so instead they add insult to injury -- informing customers that mammoth price increases and restrictions are about improving the user "experience," or are about "fairness." Suddenlink implemented caps back in 2012 but faced a major customer backlash (a backlash they could ignore since most users had no other choice for reasonably-fast broadband). The company even had to suspend its usage caps temporarily after users complained they were being billed by Suddenlink for data consumption even when the power was out or their modems were off. That raises another issue with caps: regulators can't be bothered to confirm if meters are accurate. Of course Kent also admitted the company didn't want to push usage caps too hard, or they'd start to see notable customer defections. "I think allowance billing is a little bit of a hedge," said the CEO. "But frankly, we don't want overage charges to become too big of an allowance for us. I think that could lead to some churn." That of course won't be Kent's decision to make, since Suddenlink announced a sale to Altice for $9.1 billion That of course won't be Kent's decision to make, since Suddenlink announced a sale to Altice for $9.1 billion back in May . It's entirely unclear what kind of owner Altice (which has also acquired Cablevision's uncapped services in the east) will be in this regard, but given their overseas reputation for penny pinching it's unlikely they're going to back away from a money maker just to win consumer brownie points.







News Jump Wednesday Morning Links Tuesday Morning Links Monday Morning Links TGI Friday Morning Links Thursday Morning Links Wednesday Morning Links Tuesday Morning Links Friday Morning Links Thursday Morning Links - Valentines Edition Wednesday Morning Links ---------------------- this week last week most discussed

Most recommended from 30 comments

Slyster

join:2015-01-08

Sugar Grove, VA 19 recommendations Slyster Member Figures This should have been taken care of during the Title II movement. Unless you can prove that caps are needed to manage your network then you shouldnt havent them. decifal

join:2007-03-10

Bon Aqua, TN 12 recommendations decifal Member too few Too few competitors, they will get worse and worse with the fees....



I hope the dickbag that came up with this scheme gets kicked in the head by a rabid donkey ten times before walking a tight rope over an active volcano ..



Unlike electricity, data transfers do not cost the provider as much as they would like you to think they do...

wesm

Premium Member

join:1999-07-29

Seattle, WA 470.0 895.7

·CenturyLink

12 recommendations wesm Premium Member Then they're here to stay "Overage charges have become a significant revenue stream for us," outgoing Suddenlink CEO Jerry Kent informed attendees of the company's conference call this week. In that case, welcome to the new era of data caps unless or until the FCC takes action to block them. I wouldn't hold one's breath for them being completely blocked; it's entirely likely the regulators will require accurate, near-instantaneous metering--like electricity--but leave the specifics of pricing up to the individual companies.



Airlines have been saying the exact same thing for years about "added fees" for checked bags, being able to choose certain seats, and the like. That some ISPs have noticed cap overages generating lots of income means more are going to try it. In that case, welcome to the new era of data caps unless or until the FCC takes action to block them. I wouldn't hold one's breath for them being completely blocked; it's entirely likely the regulators will require accurate, near-instantaneous metering--like electricity--but leave the specifics of pricing up to the individual companies.Airlines have been saying the exact same thing for years about "added fees" for checked bags, being able to choose certain seats, and the like. That some ISPs have noticed cap overages generating lots of income means more are going to try it.

Simba7

I Void Warranties

join:2003-03-24

Fromberg, MT 11 recommendations Simba7 Member We've been saying this for years.. Caps are a money grab. Plain and simple.