Netflix (NASDAQ:NFLX) and internet providers are currently clashing about an issue of great importance to every millennial--internet usage limits.
In both Canada and the United States, leading internet providers have quietly been adding data limits on accounts for years now. First the caps were instituted to deal with customers pirating media. These days, the concern has shifted to streaming content.
Naturally, Netflix is concerned about anything that may limit access to its service. In response, it has asked the U.S. Federal Communications Commission (FCC) to pressure internet providers to stop charging based on usage and give customers unlimited amounts of data for one reasonable fixed price.
Opponents of data caps argue that some internet customers are certainly using a large amount of data. But others use hardly any data at all. On average, it works out to a reasonable amount of data per household, enough for providers to make a good profit.
Netflix compares it to television. If somebody has their TV on all the time and somebody else only watches an hour per day, they each pay the same amount. The company wants similar rules for internet television.
According to a 2015 study, people streaming Netflix could be responsible for up to 40% of prime-time internet bandwidth, a massive amount. Youtube, the second highest user of bandwidth, only took up 16% of total capacity.
Internet providers have responded to our insatiable demand for data in a couple of ways. They’ve spent money upgrading their networks, and they’ve also instituted higher price points for true power users. One thing is for sure; they’re unlikely to give into Netflix’s demands unless forced to.
Tech Insider
