Good News for Netflix: Shaw Raises Bandwidth Caps

The Canadian cable operator Shaw (s sjr) is introducing significantly higher caps for its broadband customers, and in some cases, is even offering unlimited plans. (Hat tip to DSL Reports) That’s good news for Shaw’s consumers, but it’s also an important win for Netflix (s NFLX), which in the past has complained about low caps in Canada.
Starting in June, Shaw’s standard 7.5 Mbps plan will come with a 125 GB cap (up from 60 GB). Meanwhile, its low-speed 1Mbps “lite” offering will have a 30 GB cap (up from 15 GB), and premium customers with a 25Mbps plan will now have a 250GB cap (up from 100GB). Customers that exceed the cap will automatically be bumped into the next tier, but revert to their previous subscription package once the month is over.
Those caps mimic similar restrictions put in place by U.S. ISPs. Comcast (s CMCSK) is restricting its customers to 250 GB per month, and AT&T (s T) recently introduced a 125 150 GB cap. There’s been a debate on how generous 125 GB per month really is, especially when Netflix subscribers with connected devices use around 80 GB on average per month. However, raising the cap of the standard plan from 60 GB should go a long way toward easing concerns that even moderate Netflix usage could lead to customers being penalized by their ISP.
Fears like these have been a real concern for Netflix. The company went so far as to lower its default video quality in Canada, and it’s offering Canadian customers the option to disable HD streaming completely in order to avoid costly overage fees. Netflix has also told Canadian regulators that billing users that exceed their cap per gigabyte, as it’s being done by Shaw’s competitor Bell Canada, is essentially a money grab.
ISPs claim bandwidth caps are about dealing with network congestion, but critics have argued that it’s really about keeping potential competitors to pay TV services in check. Shaw’s most recent broadband plan changes seem to support this claim: The cable operator is also introducing a number of new plans with caps as high as 1 TB, and even two unlimited data plans. However, these new plans are only available to customers who also get their TV service through Shaw.
Image courtesy of Flickr user LWY.