Tech, Now + Beyond

The cable industry is out for blood, and Netflix might take a hit

The video streaming company wants the FCC to crack down on Internet providers who charge users based on how much data they use.

Netflix is petitioning the FCC to stop Internet providers from putting expensive data caps on their services. They argue that caps on fixed lines are pointless cash grabs, and that consumers shouldn’t have to pay more depending on how much data they use.

Data caps, or “data thresholds” as Comcast prefers to call them, have slowly been introduced as companies like Comcast argue that they simply ask customers who use more data to pay more. However, the company has faced massive amounts of backlash citing everything from inaccurate data measurements to impossibly low monthly allotments, to the fact that broadband providers don’t lose money to heavier users, nor do the caps reduce congestion. Netflix is arguing that the data caps are unfair to consumers, harmful to streaming companies and other online-based services that will lose out if customers have to limit their Internet usage, and will ultimately hinder continued economic growth.

From the full Netflix filing to the FCC: “Data caps (especially low data caps) and usage-based pricing (‘UBP’) discourage a consumer’s consumption of broadband, and may impede the ability of some households to watch Internet television in a manner and amount that they would like. For this reason, the Commission should hold that data caps on fixed-line networks–and low data caps on mobile networks–may unreasonably limit Internet television viewing.”

Beyond just watching less Netflix (or Hulu, or Amazon Video, or Youtube, etc.), if reasonable Internet usage becomes too expensive consumers will presumably cancel their subscriptions altogether. Which is a problem for streaming services for obvious reasons, but what about people who use streaming as a cheaper alternative to cable? Studies show that millennials are more likely than any other age group to opt out of cable in favor of using only streaming services to watch TV and movies. It’s more convenient and easier to choose between the all the titles on your preferred streaming service and watch whatever you want as opposed to hunting through the channels to find something to watch. But most of all, it’s cheaper. Young people can’t afford to shell out for cable, so if Internet providers up their broadband charges to make up for the lost profits, millennials will either find a way to pay for it or just opt out due to financial necessity.

And beyond accessibility or convenience, many younger viewers just aren’t all that interested in what’s on traditional TV anymore. According to a study by the digital media firm Defy Media, 13-17 year old viewers are more drawn to more homegrown YouTube personalities whom they perceive as being more relatable than TV and movie stars. What’s going to happen ten years from now when those teenagers are buying- or not buying – Internet access? If broadband companies think this is a good way to either coerce customers into buying back into cable or shelling out more for their Internet usage, when it comes to younger generations they are wrong on both counts.

Every time you turn around there seems to be another article floating around about what industry millennials are or are not responsible for destroying and why. Companies are fascinated and befuddled in equal parts by our buying habits. Are we buying cars, or aren’t we? Why aren’t we buying diamonds? And what is the deal with the Youtuber craze overshadowing traditional media, anyway? Every time, the answer is one of two obvious things: we either can’t afford it or aren’t interested in buying it the way our parents and grandparents were. Was that really so hard to figure out?

With a company like Netflix going to bat against the cable companies, hopefully the FCC will put a stop to these unreasonable charges. Comcast has already raised its data caps in response to the sea of criticism and outrage. If broadband companies make younger customers choose between a too-high price tag on the service they want, or a more reasonable one for a service they don’t, they’re going to get a nasty surprise when those crazy kids just say “neither.”