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Company dismisses online speculation that the move was made in response to Netflix migrating to Canada
Just days after popular online movie service Netflix announced its migration to Canada, Rogers Communications Inc. has sharply cut the usage limits on some of its Internet packages.
But the move has been questioned, with some suggesting the move is designed to squeeze more money from its Internet users who will be downloading more and more data.
“It’s a good way to make more money from overage fees,” said John Lawford, a lawyer with the consumer watchdog Public Interest Advocacy Centre.
“It’s driving people to higher-limit packages, which are faster but more expensive. So, if you want to use the Internet in the video-streaming kind of way, (Rogers) is going to make you pay more, especially now.”
In an email, Rogers spokesperson Carly Suppa said the changes are unrelated to Netflix and the adjustments to the usage limits “reflect the changing nature of customer’s online behaviour.”
The adjustments are part of Rogers’ efforts to “ensure we are giving those with higher demands the option to choose more speed or bandwidth while ensuring those whose needs are not as great to have lower priced tiers,” she added.
As of Wednesday, new customers who sign up for the Lite service will be allowed 15 gigabytes, a drop from the 25 GB limit offered to those who signed up before July 21.
Meanwhile, any new Lite user who goes over the monthly limit will have to pay $4 per GB up to a maximum of $50 — a spike from the previous $2.5 per GB surcharge.
Users of the Extreme service will also see their limit truncated to 80 GB from 90 GB.
Existing customers won’t be affected by the changes.
The change could also hinder Netflix’s expansion into the Canadian market, Lawford said.
The ultimate cost for watching movies through Netflix could jump for a customer using a lower-limit data plan because they went over the usage cap, he said.
An average two-hour movie viewed through Netflix uses close to 2 GB of data, while the same flick in HD would use more than 3 GB, according to U.S. technology blogs.
This means consumers using Rogers’ new Lite package would watch about 10 hours of HD video a month, assuming they didn’t use their internet for anything else.
“When people finally figure out it’s from downloading movies, then they decide to cancel it because they can’t afford it,” he said.
A Netflix spokesperson declined to comment.
Analysts predicted Netflix, which currently delivers movies and TV shows to about 13 million U.S. subcribers via the web for a monthly fee, is likely to have an impact on Canadian cable and media operators, some of whom have rolled out similar online services.
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