Netflix May Increase Your Internet Fees

Internet service providers across the country mull charging data hogs more, according to new report.

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    NEWSLETTERS

    Netflix and other streaming services may end up causing Internet fees to rise in the U.S.

    Just call it the Netflix effect.

    Internet providers across the country are discussing ways to profit off of surging Internet users, according to a report by Bloomberg.

    With more and more people watching movies and television online through sites like Los Gatos-based Netflix and Hulu, Internet providers are preparing to charge the heaviest users of data extra.

    "As more video shifts to the Web, the cable operators will inevitably align their pricing models," Craig Moffett, an analyst with Sanford C. Bernstein & Co., told Bloomberg. "With the right usage-based pricing plan, they can embrace the transition instead of resisting it."

    The shift may come slower to the Bay Area than other parts of the company but Moffett believes the change is going to eventually sweep the nation.

    Charter Communications or Time Warner Cable are considered to be the prime candidates to make the switch in charging for the amount of data used and not just the speed with which that data is delivered.

    The move would not be a surprise to many. Several Internet providers are also cable providers, who have seen their customer base -- and profits -- dwindle with the popularity of sites such as Netflix.

    Factor in that a study conducted by Sandvine Intelligent Broadband Networks last month found that Netflix accounts for 32.7 percent of peak U.S. downstream Internet traffic between the hours of 6 p.m. and 10 p.m.

    Analyze that number globally and streaming media takes up to 60 percent of peak downstream traffic. A 10 percent jump from 2010.

    With YouTube, Apple, Amazon and others adding to their streaming content, the numbers are only expected to grow, despite Netflix losing 800,000 paying customers in the last quarter because of recent fee hikes.