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November 2, 2015

Implications of Cutting the Cable

Filed under: Main — admin @ 12:01 am

This past week, the household canceled its cable TV subscription. That doesn’t change what we watch on TV, but it does change how.

The phrase is cut the cable. It’s not literal. After all, the cable company still supplies the house with high-speed Internet. But the TV portion of the subscription is canceled. This isn’t the first time I’ve tried this.

The first time I tried to cancel TV service, the cable company — aware of the practice — offered my a sweet deal in exchange for being a “valued customer.” My bill dropped from about $190/month to just $140, plus I received an HBO subscription and an Internet speed boost.

For the past few months, I’ve been testing Chromecast and alternative entertainment systems, including the Nexus Player and Amazon’s Fire Stick. The HDTV already provides a Netflix app. I also subscribe to Hulu and just recently purchased an HBO NOW subscription.

Eventually, the cost difference tilted the scale, and like a majority of people with high speed Internet, I cut the cable. The downside is that I don’t get local broadcast, no live sports (unless I pay for another service), and a few channels aren’t yet available on Hulu. That’s okay! I can live without it.

I still watch TV programs, but on my time and for about $70 less per month that I would otherwise have to pay the cable company. Obviously, you can see how this setup is appealing to everyone on the planet but the cable companies.

Don’t worry about them!

That’s because the cable companies will have their sweet revenge. Their approach harkens back to the early days of the Internet, when you payed by the hour and not the connection.

In the dawning days of the information superhighway, access was granted per minute. Your Internet bill came monthly and it was based on the hours you spent dawdling, er, researching on the ‘net.

Remember the AOL CDs that said, “1000 hours free”? Yep. That’s why.

The hourly model worked for dialup, but not broadband, which was a flat fee per month.

The Internet providers got smart with cell phones: After initially offering “unlimited data,” they snuck in a data cap. Now you buy n gigabytes of data per billing cycle, non-accumulating. Exceed that cap and you pay. Even the lingering unlimited data users are stuck with the original phone blessed with that plan or they find their connection speed throttled after a given threshold.

So what’s up?

Due to declining income from people cutting the cable, cable Internet providers will soon offer monthly data allotments. You get the first n gigabytes of data at a base cost and then pay per gigabyte after that.

Doubt me? Comcast is already floating this idea in various locations. They’re being met with massive resistance, but it’s the price everyone is going to pay for cutting the cable.

My hope is that the free market balances the fees. Competition is good, and fortunately for the consumer, our options aren’t limited when it comes to high-speed Internet access.

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