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Time Warner to Try Bandwidth Caps, $1/GB Overage Fees

Time Warner to Try Bandwidth Caps, $1/GB Overage Fees

Associated Press / AP Online

June 02, 2008

NEW YORK – You’re used to paying extra if you use up your cell phone minutes, but will you be willing to pay extra if your home computer goes over its Internet allowance?

Time Warner Cable Inc. customers – and, later, others – may have to, if the company’s test of metered Internet access is successful.

On Thursday, new Time Warner Cable Internet subscribers in Beaumont, Texas, will have monthly allowances for the amount of data they upload and download. Those who go over will be charged $1 per gigabyte, a Time Warner Cable executive told the Associated Press.

Metered billing is an attempt to deal fairly with Internet usage, which is very uneven among Time Warner Cable’s subscribers, said Kevin Leddy, Time Warner Cable’s executive vice president of advanced technology.

Just 5 percent of the company’s subscribers take up half of the capacity on local cable lines, Leddy said. Other cable Internet service providers report a similar distribution.

“We think it’s the fairest way to finance the needed investment in the infrastructure,” Leddy said.

Metered usage is common overseas, and other U.S. cable providers are looking at ways to rein in heavy users. Most have download caps, but some keep the caps secret so as not to alarm the majority of users, who come nowhere close to the limits. Time Warner Cable appears to be the first major ISP to charge for going over the limit: Other companies warn, then suspend, those who go over.

Phone companies are less concerned about congestion and are unlikely to impose metered usage on DSL customers, because their networks are structured differently.

Time Warner’s tiers will range from $29.95 a month for relatively slow service at 768 kilobits per second and a 5-gigabyte monthly cap to $54.90 per month for fast downloads at 15 megabits per second and a 40-gigabyte cap. Those prices cover the cable portion of subscription bundles that include video or phone services. Both downloads and uploads will count toward the monthly cap.

A possible stumbling block for Time Warner Cable is that customers have had little reason so far to pay attention to how much they download from the Internet, or know much traffic makes up a gigabyte. That uncertainty could scare off new subscribers.

Those who mainly do Web surfing or e-mail have little reason to pay attention to the traffic caps: a gigabyte is about 3,000 Web pages, or 15,000 e-mails without attachments. But those who download movies or TV shows will want to pay attention. A standard-definition movie can take up 1.5 gigabytes, and a high-definition movie can be 6 to 8 gigabytes.

Time Warner Cable subscribers will be able to check out their data consumption on a “gas gauge” on the company’s Web page.

The company won’t apply the gigabyte surcharges for the first two months. It has 90,000 customers in the trial area, but only new subscribers will be part of the trial.

Billing by the hour was common for dial-up service in the U.S. until AOL introduced an unlimited-usage plan in 1996. Flat-rate, unlimited-usage plans have been credited with encouraging consumer Internet use by making billing easy to understand.

“The metered Internet has been tried and tested and rejected by the consumers overwhelmingly since the days of AOL,” information-technology consultant George Ou told the Federal Communications Commission at a hearing on ISP practices in April.

Metered billing could also put a crimp in the plans of services like Apple Inc.’s iTunes that use the Internet to deliver video. DVD-by-mail pioneer Netflix Inc. just launched a TV set-top box that receives an unlimited stream of Internet video for as little as $8.99 per month.

Bend Cable Communications in Bend, Ore., used to have multitier bandwidth allowances for Internet customers but abandoned them in favor of an across-the-board 100-gigabyte cap. Bend charges $1.50 per extra gigabyte consumed in a month.

© 2008, YellowBrix, Inc.


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  • Picture_026_max50

    Sketch

    about 1 year ago

    12 comments

    Man this would actually rain on someone parade... Not even cool :/

  • _bu_4rtq_2k___kgrhgookkiejllmvgl3bknq_3ku4q___1_max50

    twctc889

    about 1 year ago

    48 comments

    not bad info i am a old time warner employee,and that sounds about right ,it all bussiness.

  • Photo_user_blank_big

    adam1071

    about 1 year ago

    2 comments

    i have been a faithful time warner customer for the past 8 years. cable tv, internet and phone and i love my roadrunner however if this comes too pass ill be calling up tyhe dreaded verizon for lightining link and direct tv. i do alot of online gaming and since i already pay about 30 bucks a month for my internet and another 30 bucks for 2 subscriptions of world or warcraft i cant see paying even more too get screwed by yet another company that just wants too gouge me out of even more of my hard earned money.

  • Photo_user_blank_big

    Snowlark

    about 1 year ago

    4 comments

    The real response is to _LOWER_ the cost for those that use less, not cap! Let's be honest, they have been sucking the money from those who use the network less for YEARS!!!!!!! Why is the heavier user always targeted as the "bad guy" or flippin' PIRATE! Let's deal in reality and place the blame on the REAL pirate - Time Warner Cable!!!!

    C'mon people, I don't use my network that much, and I am NOT a pirate! You all need to get your heads out of the sand, stop believing that there is some mythical bad guy, when in reality you should be mad at Time Warner for stealing from those who use the network LESS!!!!

    Sheesh, what a mess!

  • Richard1_max50

    weboptimist

    about 1 year ago

    4 comments

    I currently use Time Warner for Internet and cable TV, but will switch to DSL and DirecTV (way more HD channels) without hesitation if metered use comes to my area.

  • Cat_max50

    flipp900

    about 1 year ago

    2 comments

    This is a step backwards! everything is becoming dependant on the internet. It will suck worse for people who play online games (computer, xbox, ps). This will kill time warner. I hope comcast doesn't do this crap or I will be more pissed.

  • Me-bike-avatar160_max50

    czar

    about 1 year ago

    252 comments

    When cable internet first came out, a lot of us said they won’t be able to sustain the bandwidth, those down the line will get less if those above take more.
    When I first got it was great, so much better than the ISDN I had at the time. Last year when my neighborhood went from 2 of us to everyone (I can see 16 different wireless signals) I started having problems with bandwidth, staying connected for large uploads and downloads, which I did mostly late at night. (I do high-end flash and video websites)
    I complained to Comcast (we have nicknamed it CONcast round here). That I wasn’t getting the bandwidth and of all the drops, they said it was my equipment. When I started having troubles with the TV also, again it was my equipment. I showed technicians on their OWN test equipment how the signal, and strength would vary dramatically, they only replied “that’s normal, happens all the time”. Eventually Comcast fired me as a customer, just shut me OFF said they didn’t want my business, they knew I knew they were ripping people off.
    A few months ago they started charging for a tech to come out and you pay EVEN if it is Comcast’s fault and not yours and it isn’t cheap.
    This is another ploy to gouge more money out of the consumer. I understand profit, this is different it’s that they have lost market share through bad customer service to other companies. So instead of fixing their problems they will just charge more for less.
    Like the commercial says “most people wouldn’t know HD if it climbed in their lay and called them mama.” They think we are ALL STUPID.

  • 393066_l_max50

    dddd

    about 1 year ago

    2 comments

    hey one movie download could take up to one gig, so after i download one movie i'll have to start paying the extra,you suck time warner and this will never ever work !!!!!!!!!!!!! i will be cancelling my account if this happens along with alot more people and i do mean alot more people !!!!!!!!!!!!!!!!!!

  • Photo_user_blank_big

    HondaHater

    about 1 year ago

    10 comments

    And here is something to think about: Yes it is from 2001,dinosaur days in the tech world, but it is real, and it could be our future. God forbid.

    http://img151.imageshack.us/img151/9603/billkv9.jpg

  • Photo_user_blank_big

    HondaHater

    about 1 year ago

    10 comments

    Piracy has nothing to do with it. When you're downloading legitimately(i.e. I download EVERY PC game demo that comes out, in addition to my PS3 Demos AND HD trailers from Apple that I save to my HDD), you can still break the 40 Gig cap without even trying. Here in Germany I have 17 Mbs with NO cap. I have downloaded 17 Gig sometimes in a single day.

  • Photo_user_blank_big

    casualguy2008

    about 1 year ago

    2 comments

    I hope our country is ready for civil war because if we keep going in this direction. the rich is asking for it. do be fooled by this site its just a way to see how people will react. The big companys in the us have no care for there customers anymore. so its time to take our biz elsewear.(:

  • Undead_male120x_max50

    rmelendez3

    about 1 year ago

    44 comments

    Wasn't the Internet supposed to be free when it became available to the public? Now we are going to have to pay based on our usage... this can't be right.. This is just another way for the big corporations to suck up all of the consumers money... If there are multiple users in a home using the internet and streaming internet TV. I hope this doesn't go through.

  • Downtown_franklin_max50

    yeahimsteve

    about 1 year ago

    10 comments

    It's actually not that bad at all, unless you are an internet pirate. It's clear as day that a small amount of people are taking advantage of the system, and this would be a good way to stick it to the pirates out there who have no business downloading 100GB a month. No regular user would ever be effected by this, because no regular user will ever go over the cap. Even if you download from iTunes, or other legal sites.......you don't have anything to worry about. Besides, even if you DO go over the limit here and there by lets say...a gigabyte.........it's a simple buck. 1 dollar. Not a big deal. They have to find ways to get rid of the pirates who are running ftp servers and stealing all their bandwidth. This won't hurt anybody doing what they are supposed to, so don't worry about it.

  • Photo_user_blank_big

    edouglas30

    about 1 year ago

    2 comments

    I think this plan will make basically any other service provider out there a better choice for a few reasons. 1. "Double Taping" customers who use their VOIP product. 2. Charging customers for spam they are not able to filter. 3. I don't have time to babysit my total data transfer amounts. So yea they do this I will definitely being changing service providers and advising others to do the same. I dont need an isp charges me for its own failings.

  • Isbanner_max50

    ARKANSASIS

    about 1 year ago

    14 comments

    Personally I will take my business elsewhere. This is a backwards approach to drain money out of an already damaged customer base, ironically their most solid customer base. It is not the low-end users who when the economy goes south will get rid of internet, rather those who use lower bandwidth. The general large users, myself included are those whom use of the internet would be akin to not having electricity. They WILL defect to another company, service or technology which can provide the same tech for a limited amount. I've seen techs wire unlimited cell phones to computers, put up towers in their backyard to intercept signals, the first chance that is open, a technology company will setup a new company that will deliver the same service via mesh-network approach. How do I know this, my company just completed its fifth city-wide tech network. Other companies such as ATT know this, and have launched an attack on cable by TVIP/VVOIP tech such has U-VERSE, offering quality cable via their internet service. Instead of limited service to the customers their approach is upgrading to FTTN (Fiber to Node) and FTTP (Fiber to the premises) . It is a lesson companies are slow to learn, and the reason Cingular led the charge on traditional tel-com's in the late 90's and early this decade. With the merger of Cingular and ATT this allowed an expansion not seen in years to the phone industry, and while version and others still hold their own is it any wonder that the trend in the cell industry is to move away from metered calling? Pick 5, Mobile - to - Mobile, and other program plans have been ramping up for the past decade. Then we have companies like Microsoft and Apple who's revenue streams will be directly impacted. This will cause them to lobby for regulations, also open the door for companies like Wal-Mart to step in (just as they did with dial-up) with services to the customers at less costs. What the article forgot to mention is that AOL and Time Warner are the same company, ie, its simply AOL trying to enforce its original business plan on its customers again. We all know how well that went the last time for their company.

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