Shaw greets OTT with per-gig overcharges

Canadian MSO Shaw Communications (NYSE: SJR) is following along with fellow Canadian MSOs Rogers Communication (NYSE: RCI) and Cogeco and U.S.-based Time Warner Cable (NYSE: TWC-WI) in assessing an overage charge to broadband subscribers who overdo it--possibly because they're watching too much non-Shaw-provided over-the-top content.

Shaw initiated a "pilot program" to test the effectiveness and need of adding per-gigabyte overage charges to broadband subscribers bills in Edmonton and told Broadband Reports that it "will be expanded to other Shaw service areas next year."

Overage charges have always been common with mobile providers. As cable customers start to consumer more content from non-cable entertainment sources such as Netflix (Nasdaq: NFLX), the result is filtering down to their monthly bills. Shaw's fees fluctuate based on the types of service the subscriber is getting but generally start at $5 for 10 GB and climb to $50 for 250 GB.

While Shaw said the overage charges are "not financial," Broadband Report's editor Karl Bode, disagreed, noting that "$1-2 per gigabyte is expensive for terrestrial broadband ... and are a punitive way for carriers to both cash in on Internet video and deter consumers from staying from their own TV offerings."

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