Rogers Communications, the country's second-biggest internet provider, is lowering the usage limits on some of its plans, just days after online video service Netflix announced it was expanding into Canada.
The company lowered the limits Wednesday on several of its service plans in Ontario, its main market. Users who signed up for the cable company's "Extreme" service after July 21 will be allowed 80 gigabytes of monthly usage, versus 90 GB for those who signed up before.
Do usage limits affect how you use the internet? Take our poll.
Customers who sign up for the "Lite" service will now get 15 GB, versus 25 GB before.
Rogers also simultaneously boosted the speed of the Extreme plan to 15 megabits per second from 10, while the Lite plan's speed was unchanged.
The company, which has 1.6 million internet subscribers — second only to Bell Canada — did not explain the changes and a spokesperson did not have a comment.
The lower usage limits came two days after Netflix announced its plans to enter Canada this fall. Netflix has become popular in the United States by providing unlimited movies and television shows for a monthly subscription fee of $8.99 U.S.
Streamed to TV
The videos can be streamed to the subscriber's television through a choice of internet-connected devices, such as game consoles and Blu-ray DVD players.
Netflix also has a mail service in which DVDs are sent to the subscriber's home, but the company has no plans to offer that option in Canada.
U.S. technology blogs have estimated that a typical two-hour movie from Netflix uses about 1.8 GB of data, while a high-definition version consumes about 3 GB. Users on Rogers's new Lite plan could therefore view about 10 hours a month of HD video a month if they didn't use their internet connection for anything else, while Extreme subscribers could view about 53 hours, or less than two hours a day.
Rogers Communications' highest usage plan is its Ultimate service, which allows for 175 GB for $99 a month. Earlier this year, the company raised its maximum overage fee — extra charges that are incurred when monthly usage is exceeded — to $50 from $25.
John Lawford, a lawyer with the Public Interest Advocacy Centre consumer watchdog, said the move is both a cash grab by Rogers on its internet customers, and a defensive measure to protect its video services. The company is Canada's biggest cable television provider and it operates a video streaming service similar to Netflix called On Demand Online.
"It's easier to make money from overage charges because those aren't really advertised rates. You're going to make more money from those overages, eventually, than your regular monthly rates," Lawford said. "It also kind of wrecks [Netflix's] business model if the cost to the end user goes up after they've subscribed and then they cancel it a month later because they can't afford it."
Rogers usage limits are similar to those offered by most large Canadian internet service providers. Bell, for example, offers 25 GB on its Performance service and 75 GB on its Fibe 16 plan.
The offerings are minuscule, compared with what ISPs give customers in the United States. Cable provider Comcast, for example, has a limit of 250 GB on all plans while customers pay more for higher speeds.
Some smaller Canadian providers who rent portions of phone and cable companies' networks to provide their own internet services offer high-usage plans for lower fees. Chatham, Ont.-based TekSavvy, for example, leases network access from both Rogers and Bell and sells services with unlimited usage.
A spokesperson for Netflix said it was too early to comment on whether the low usage limits from major ISPs would affect the company's prospects in Canada.