As They Ramp Up Hotspots, Are Cable Companies Looking Toward Usage-Based Billing?

These days, customers have grown to expect that they’ll be able to connect to the Internet no matter where they happen to be.

For the time being, that wish is not yet completely a reality. But we’re almost there: Just as today’s kids probably have a hard time imagining a world without the Internet, the younger generations of the future will likely one day be shocked to learn there was once a world in which you couldn’t constantly access the Internet from any location.According to a recent report, cable operators are poised to offer somewhere in the ballpark of 10 million Wi-Fi hotspots by early 2015. Already, Comcast has 4.6 million hospitals, while Cablevision has about 1 million. That number is expected to reach near 20 million by the end of next year and 50 million by the middle of 2017. At the end of 2013, there were only 250,000 hotspots, according to the report.

“The appetite for community Wi-Fi has grown exponentially in recent years, mainly due to consumers wanting to always be connected both inside and outside the home,” explains Shrikant Shenwai, CEO of the Wireless Broadband Alliance.

Although these hotspots are certainly what customers want, the technology is not without its own problems.

“Operators are feeling the pressure to address this demand and deliver the desired services, but they first need to lock down on certain considerations around implementation, QoS and even monetization,” Shenwai continued.

One way to monetize a hotspot service is via usage-based billing, where a cable provider will charge its customers not based on how fast their connections are, but rather how much data they consume.

In the past, both cable executives and government regulators have expressed their support for usage-based billing. With it in place, customers would get charged for how much data they consume via the Internet, just as they now get charged for how much electricity they use. While customers who use a substantial amount of data aren’t likely to entertain the notion of usage-based billing, it appears as though cable providers will move in this direction in the near future.